Adidas, allegations of corruption among employees in China

Corruption investigation at Adidas China. The German group, following an anonymous letter of 7 June alleging potential compliance violations by some employees, decided to engage external legal counsel to shed light on the matter.

China was one of the growth engines for Adidas before the pandemic, but the boycott of Western brands has since reduced its business in the country. The company has only returned to growth in the Chinese market in recent quarters, albeit from a smaller base, thanks to a recovery in demand for shoes, including classic three-striped trainers such as the Samba and Gazelle.

The anonymous letter briefly appeared on the Chinese social media platform Xiaohongshu earlier this month, the Financial Times reported over the weekend. The letter, which claims to have been written by 'employees of Adidas China', accuses several Chinese employees, including a senior manager involved in Adidas' marketing budget in the country, of corruption.

The letter, based on screenshots circulated on social media and news sites in China, claimed that Adidas employees received bribes from external service providers, while another senior manager potentially received 'millions in cash' from suppliers and physical assets such as real estate.

Adidas said it could provide no further information, but takes the allegations very seriously, he said.