Notably, Hamilton's Mercedes farewell seems to have been the key to Adidas' successful handholding. Given Hamilton's relationship with Puma and Tommy Hilfiger, his launch of a personal apparel line at Tommy Hilfiger races underscores the close collaboration. The British racer's departure could prompt both brands to shake up their choice of team sponsorship.
Hamilton is in the same Puma camp as Neymar.
For Adidas, this is certainly a great opportunity to enter top-level motorsports. However, the German giant will need to invest heavily to widen its commercial footprint. The Daily Mail has revealed that Adidas' new sponsorship deal, which is worth far more than the £6 million a year deal with Tommy Hilfiger and Puma, means that Adidas will be investing tens of millions of pounds over the life of the contract.
A list of Mercedes' current sponsors.
However, the partnership will also mean finding a new racing apparel supplier for both Mercedes and Adidas.F1 has extremely high safety standards for racing apparel, especially for flame retardancy, and even stricter safety approvals for driver's equipment. Puma is experienced in the field of racing apparel, but for the fledgling Adidas, this is undoubtedly a major challenge.
Adidas helps the "German Wings" to take off.
From the Adidas perspective, the partnership with Mercedes has helped the brand rebrand and enhance its prestige. Last month, the German Football Association (DFB) and Adidas ended their 80-year partnership, triggering heated debate in the industry. The German Football Association's economic considerations became the main reason for the "breakup", while Adidas, as a local brand, witnessed the historical glory of the German soccer team.
The German Football Association (DFB) and Adidas "parted ways".
The German Football Association (DFB) emphasized that the new contract needs to take into account economic factors, and Nike has provided a more competitive offer. According to foreign media reports, the price of cooperation between the two sides is about 100 million euros per year, almost double the existing contract of Adidas. This decision of the German Football Association has triggered criticism from German politicians.
Such decisions by the DFB have been widely criticized by German politicians. Bavarian Governor Soder stated, "German soccer is part of Germany's economic history, the German team's jersey symbolizes Germany, and 90 minutes of football are taken for granted. Ending this history is wrong, regrettable and incomprehensible."
Adidas has lost significant sponsorship in soccer, but has found new ground in motor racing. German automotive giant Mercedes-Benz is Adidas' first choice to enter Formula One.
Compared to the German men's soccer team, Mercedes has more brand awareness, but it is also important to note that there is a difference between the two in terms of audience base. For Adidas, the brand impact from sponsoring the Mercedes team may not be limited to sports.
F1 Peripheral Merchandise Sizzling, Attracting Adidas In?
The Mercedes signing is significant for Adidas, marking the brand's entry into a new field and new business. But from a sports business perspective, does the signing signal that Adidas will lead the way for other sports giants to enter the motorsports arena?
Puma, a German brand, has always been a popular choice for motorsport sponsorship. Since 2001, Puma first partnered with a Formula One team to provide equipment for Jordan Racing. Since then, Puma has continued to invest in motorsports, signing drivers such as Schumacher and Hamilton, and maintaining close cooperation with teams such as Mercedes, Ferrari and Red Bull, and is now the official apparel partner of F1.
Some sports brands choose to work with drivers individually, such as Chinese driver Zhou Guanyu and Lulu.2023 In January, Lulu announced that it had signed Zhou Guanyu as a brand ambassador and launched co-branded apparel ahead of the F1 Chinese Grand Prix, which attracted many fans.
In fact, F1 peripheral merchandise has always been popular with fans, especially team apparel and hats. The race entered a new phase with the acquisition of F1 by Liberty Media Group.Fanatics 2023 data shows that the number of people buying F1 peripheral merchandise has increased by 1,085% since 2018 and 101% since 2022. The United States is the highest selling country, followed by the United Kingdom, with Australia in third place.
It's worth noting that F1 peripheral merchandise comes with a hefty price tag per unit. According to the official F1 store, the official price of the 2023 Red Bull polo shirt is 65 pounds (about 593 yuan), and the T-shirt is 50 pounds (about 456 yuan). High unit prices and sales growth have brought lucrative earnings for sports brands. Thus, Adidas' signing of Mercedes reflects the German sports brand's insight into the F1 market.
The potential business opportunities of F1 peripheral merchandise may be an incentive for German sports brands to enter F1.
