Adidas CEO says 10% of products in Asia likely counterfeit

The CEO of global sportswear brand adidas has disclosed that 10% of its branded products in Asia Pacific may be counterfeit – including products found online and in-store. Kasper Rorsted, CEO of adidas, confirmed the revelation to CNBC. He added that this is a major problem for the industry, which involves global retailers, especially in Asia.

This is despite the fact that adidas reported a 15% double-digit growth in its Asia market, driven primarily by a 26% increase in Great China. Sales for adidas-brand products increased 17%, with double-digit growth in running, training, basketball and Originals. Reebok-brand revenue was down 9%, but double-digit growth was observed Greater China, offset by declines in Japan and South Korea.

Marketing has reached out to adidas for comment.

Overall, the adidas brand saw an 11% growth, with the adidas’ women’s business continued to grow in double-digits, representing 25% of its total brand adidas business. Its sport performance grew by 11%, driven by increases in football, training and running. Its sport inspired range grew by 13% due to double-digit growth in footwear in apparel. E-commerce grew by 27%, driven by double-digit growth in most regions. Timing of its product launches also weighed on most of its e-commerce growth in Q1 2018.

“We had a successful start to the year that was fully in line with our expectations: Our high-quality top-line growth was driven by our strategic focus areas North America, Greater China and e-commerce,” Rorsted said in a statement on its financials.

Last year, Rorsted revealed that the brand would move away from TV advertising as part of its 2020 strategy, and now completely focus its marketing on digital platforms. This is with the aim to quadruple its e-commerce revenues by 2020. It also plans to increase revenues from US$1 billion to US$4.25 billion.

Last year, the adidas' director for global sports marketing for basketball James “Jim” Gatto got arrested for his involvement in college basketball fraud and corruption schemes. This included coaches, executives, advisers and several “affiliated” with the company.