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Adidas caps a busy six months with e-commerce growth up 57%

August 10, 2015 04:30 PM
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Athletic apparel and gear maker adidas AG continued a full-court press in the last two quarters to grow its global e-commerce numbers.

In addition to putting up robust e-commerce growth in the last quarter, adidas, No. 246 in the Internet Retailer 2015 Top 500 Guide also spent 220 million euros ($241.19 million) to acquire Runtastic GmbH, a mobile app developer for sports and fitness communities.

Adidas, No. 54 in the Internet Retailer 2015 Europe 500  sees the acquisition of Runtasic, an Austrian company that’s developed more than 20 apps in 18 languages for endurance, health and fitness activities, as a way to add depth to micoach.adidas.com, its online community for athletes to store their performance information and share with others for a wide variety of sports.

“We are absolutely convinced that digital technologies provide new capabilities and insights to help athletes take control of their sporting destiny, whether improving their performance, sharing their experiences or creating their own great social moments of sport,” adidas CEO Herbert Hainer told analysts on the company’s second quarter earnings call based on a transcript from SeekingAlpha.com.  “The acquisition will add considerable value on our journey to deliver new world-class digital sports experiences.”

As a mobile app developer, Runtastic has built its app user base to include more than 70 million registered users that collectively conducted more than 140 million downloads, adidas says. “To accelerate growth the company has been aggressive in rolling out customized language versions, which is proving to be a major competitive and first-mover advantage,” Hainer told analysts. “In the U.S. alone Runtastic is already counting close to 10 million registered users.”

Runtastic’s apps sync directly with mobile and wearable devices to track such performance data as distance, speed, pace, time, heart rate, calorie consumption and route traveled for running, biking and related exercise activities. Users can view results directly within the app, on various devices with global positioning services or on Runtastic.com.

Adidas wants to give athletes and others more ways to track their performance in detail and then target those athletes with online offers of gear and apparel to help improve their results, Hainer told analysts. “The adidas brand was the first in the industry to comprehensively bring data analytics to the athlete,” he said. “We change the game through technology through a variety of digitally enabled products such as balls, wrist devices, apparel and shoes.”

The acquisition also closed out a busy but robust e-commerce growth cycle for adidas in the first half of 2015.

For the first six months of the year ended June 30, adidas reported:

  • Web sales increased year over year 57%. Currently the web accounts for about 3% of all sales, the company says. Based on those metrics, Internet Retailer estimates that e-commerce increased 57.1% to 239.2 million euro ($262.2 million) from 152.3 million euro ($167.0 million) in the first half of 2014. The company didn’t break out second quarter metrics.
  • Total sales increased 16.1% to 7.99 billion euro ($8.75 billion) from 6.88 billion euro ($7.52 billion).
  • Net income was 385 million euro ($422.08 million) compared with 348 million euro ($381.51 million)

“Our e-commerce business continues to do extremely well,” Hainer told analysts.

 

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