Core Viewpoint - The article discusses the outsourcing model of Adidas, highlighting consumer reactions to the revelation that their products are manufactured by third-party factories like Xuezhongfei, leading to discussions about brand transparency and consumer awareness [4][5][8]. Group 1: Adidas Outsourcing Model - Adidas has largely outsourced its production to third-party factories, focusing on design, research, and marketing to maximize profits [4][8]. - The company has no significant production lines of its own, with most of its manufacturing done by factories in regions like Guangdong and Fujian, China [8][9]. - The outsourcing strategy allows Adidas to maintain flexibility in production and cost management, enabling quick adjustments to market changes [15][16]. Group 2: Consumer Reactions and Market Dynamics - Consumers expressed dissatisfaction upon discovering that high-priced Adidas products were made by Xuezhongfei, prompting discussions about the value of brand versus actual product quality [5][19]. - A comparison of prices revealed that similar products from Xuezhongfei were significantly cheaper, raising questions about the pricing strategies of major brands like Adidas [5][19]. - The article notes a shift in consumer awareness, with buyers increasingly interested in the actual manufacturing details rather than just the brand name [18][19]. Group 3: Strategic Adjustments and Market Performance - Adidas has been adjusting its production strategy, with a notable increase in locally produced items in China, reflecting a shift back towards domestic manufacturing [12][14]. - The company aims to regain consumer trust through deeper localization and responsiveness to market demands, as evidenced by its plans to establish a new headquarters in Shanghai [14]. - Recent financial performance indicates a positive trend, with Adidas's revenue in the Greater China region growing by 10% year-on-year in 2024, showcasing the effectiveness of its strategic adjustments [15].

Group 1: Price Dynamics - Global prices for the same products remain stable, but the U.S. market faces upward price pressure due to new tariffs [2][3] - Adidas reported a loss of hundreds of millions of euros due to tariffs, with expected price increases limited to the U.S. market [3] - Procter & Gamble plans to raise prices by approximately 5% on about a quarter of its products in the U.S. to offset $1 billion in increased costs [3] Group 2: Retailer Challenges - U.S. retailers are stockpiling goods to mitigate rising procurement costs, leading to increased warehousing expenses [6] - Retailers like Best Buy and various small businesses are struggling to pass on costs to consumers, resulting in reduced profit margins [6][7] - The phenomenon of stockpiling is seen as a temporary solution, with inevitable price increases expected once inventories are depleted [7] Group 3: Consumer and Business Sentiment - The new tariffs are set to take effect on August 7, raising concerns among small business owners about order cancellations and rising costs [7][9] - Consumer spending is affected, with a reported 2.6% year-over-year increase in the PCE price index, indicating rising inflation [9] - The uncertainty surrounding tariffs is expected to suppress investment willingness among businesses, complicating global supply chain adjustments [10]

Core Viewpoint - The article discusses the unusual phenomena in the U.S. retail industry following the announcement of new tariffs, highlighting the impact on pricing, inventory management, and consumer behavior amid rising costs and economic uncertainty [4][12]. Group 1: Pricing Dynamics - Global prices for identical products remain stable, but U.S. consumers face potential price increases due to new tariffs, with Adidas CEO reporting losses in the hundreds of millions of euros due to tariffs affecting their supply chain [5][6]. - Procter & Gamble plans to raise prices by approximately 5% on about a quarter of its products in the U.S. market to offset an increase in costs of $1 billion due to tariffs [5]. - A study found that 29% of 230 tracked products on platforms like Amazon and Walmart saw price increases averaging nearly 6% since March 2 [6]. Group 2: Retailer Challenges - U.S. retailers are stockpiling goods to mitigate rising procurement costs, leading to increased warehousing expenses [8]. - Retailers like Best Buy and various small businesses are struggling to pass on the full cost of tariffs to consumers, resulting in reduced profit margins [8][9]. - The phenomenon of stockpiling is seen as a temporary solution, with inevitable price increases expected once inventories are depleted [9]. Group 3: Consumer and Investment Sentiment - The new tariffs, effective August 7, are causing heightened anxiety among businesses and consumers, with many small business owners reporting order cancellations and increased costs [9][10]. - Consumer spending is showing signs of decline, with the PCE price index rising 2.6% year-over-year, indicating inflationary pressures [11]. - The uncertainty surrounding tariffs is expected to suppress both consumer spending and business investment, potentially leading to slower economic growth [12].