Company presentation

History1986: Products designer1996: Brand designer2000: Technical brand designer2008: Decathlon belongs to Oxylane group

BusinessDesign and manufacture athletic apparel and equipment Retail sports products

Number of employees: 42 000 collaborators

International marketMore than 500 stores in about 16 countries 53% of its activity

Turnover: 2009 turnover: 5.4 billion EurosThird sport goods distributor

Strategy: Sell under they own brands products at a lowest price

What you have to know about Decathlon …

Distribution of turnover:

2010

2007

Competitive presentation

“ Make the pleasure of sports accessible to the largest number of people. “

Number of customers: 80 million

Structure of the customers : fragmented

Wide range of people From beginner to professional Children, Adults, old persons From Individual to familial Frow low wages to high wages Category of people passionate about sports and very involved are overrepresented 51% of clients are women

Customers

From 7 to 77 years, From beginner to professional

1976-1986: Decathlon wants to sell product of sport brands but Decathlon was judged « not enought chic »

1986: Creation of « Decathlon production » for the conception and fabrication of its own brand

it becomes a strategic axe

1988: Decathlon opens an office production in China.Nowdays, 2/3 of sold articles made in Asia .

l

The other suppliers: specialized in the production of sport goods

Their selected products are on the shelves by Decathlon only 1 year later

Décathlon is present both as a distributor and as a fabricant of sport products

Its suppliers don’t know how consider Decathlon as a partner or as a competitor!

Brands sold in Decathlon Store

67%Décathlon

33%Others

Decathlon as its own supplier The other suppliers

Suppliers

1976-1986: Decathlon wants to sell product of sport brands but Decathlon was judged « not enought chic »

1986: Creation of « Decathlon production » for the conception and fabrication of its own brand it becomes a strategic axe

1988: Decathlon opens an office production in China.Nowdays, 2/3 of sold articles made in Asia . In China,Decathlon has 250 sub-contractors.

l

The other suppliers: specialized in the production of sport goods

Their selected products are on the shelves by Decathlon only 1 year later

Décathlon is present both as a distributor and as a fabricant of sport products

Its suppliers don’t know how consider Decathlon as a partner or as a competitor!

Brands sold in Decathlon Store

67%Décathlon

33%Others

Decathlon as its own productor The other suppliers

Suppliers

1976-1986: Decathlon wants to sell product of sport brands but Decathlon was judged « not enought chic »

1986: Creation of « Decathlon production » for the conception and fabrication of its own brand it becomes a strategic axe

1988: Decathlon opens an office production in China.Nowdays, 2/3 of sold articles made in Asia . In China,Decathlon has 250 sub-contractors.

l

The other suppliers: specialized in the production of sport goods or are specific brand

Décathlon is present both as a distributor and as a fabricant of sport products

Its suppliers don’t know how consider Decathlon as a partner or as a competitor!

Brands sold in Decathlon Store

67%Décathlon

33%Others

Decathlon as its own productor The other suppliers

Suppliers

Distribution Sector

N°3 in the world on this sector (N°1 Intersport)

In China, in 2003 the distribution market of sports goods was almost virgin

Today, in China, Decathlon has only one competitor.

All the others sport stores are specialized

Market sport products distributionin France

30%Autres 43%

Decathlon11%

Go Sport16%

Intersport

Decathlon strategy: product same sport goods than Nike and Adidas but cheaper.

Products conception Sector

Multi-Sports

Spécialiste

PatagoniaColumbia Eider

Nike Adidas

Décathlon

Haute technicité

Basse Technicité

Asics Puma Reebok AirnessLe Coq Sportif

Quicksilver Rip Curl…

Artengo 15€Nike 50€

Competitors

Key Success Factors

Key success factors of the sector Decathlon

ProductsLarge range of products/ adaptation to the local marketQuality of productsResearch & Development Policy

Managerial expertise Implementation (geographic implementation and high number of stores)Relationship with suppliers: strong partnerships with sub-contractors

but bad relationship with big brands

Marketing Know-howCommunication & advertising policy Services and Customer Relations

+++

+++

++

Decathlon in China

Opportunities of implementation

In China since 1988: a huge advantage

Already implemented for the production of its goods opening of three stores nearby factory production offices

in Shanghai, Guangzhou and Shenzhen to test the market.

The Chinese law allows foreign companies manufacturing in the country to open stores in solo called "outlet stores".

The results - in 2002, these three units have generated a turnover of 3.5 million with 250,000 customers - were enough to validate a real development project under banner.

80% of sold products are their own brand : no customs tax (taxes douanières)

Opportunities of implementation

Sport Market is growing up with the improvement of the standard of living

As with rising living standards, we attach importance to fitness. Different physical improvement clubs have opened and all attract a large clientele.

Spending in entertainment, sport, culture and education is increasing

+121% in 6 years

(1995: 312,7 2001: 5309 RMB/pers/year)

400 millions of Chinese people(30%) nationwide participate in various sports activities

In 2008, the Beijing Olympic Games gave a new boost

Low price, no tv advert

Low prices

To win over the mass market

In an emerging economy, products have to be cheap.

No advertising.

Decathlon inundates the french market advertising to promote its products but not in China.

Now Decathlon, for the company's China business, has opened 25 outlets in 12 Chinese cities in 2010 - without a "penny" being spent on TV commercials

French Price: 5.90€ = 51,4 RMB

Chinese Price: 35 RMB

Strategy of implementation

An individual approach

Experiential marketing :The concept of shops attract

Decathlon maintain in China its concept store: you can test ping pong, golf, basket all outlets are spacious to try the equipments

The concept store/event results: Decathlon emphasizes family and family happiness and their tast for sport.

Decathlon also sponsors sports events every month in residential

neighbourhoods near its outlets, especially for youngsters.

They believe in word of mouth. They expand through person-to-person networks

Adaptation to local market: Think Global Act Local Concentre on Chinese fitness preferences - light to moderate exercises such as ping-pong,

badminton, tennis and golf rather than more robust sports. As such it doesn't sell gym equipment. Take measurements of its shoppers in key Chinese cities in order to design sportswear that fits

better. Eg: Chinese people's feet Take into account consumer feedback . Eg: swimming goggles

Strategy of implementation

Stores Distribution

Shanghai 6 Chengdu 1

Beijing 5 Wuxi 1

Shenzhen 2 Hangzhou 1

Qingdao 1 Guangzhou 2

Nanjing 1 Dalian 2

Suzhou 1 Tianjin 1

Changchun 1    

Manufacture Distribution

Shanghai Qingdao

Nanjing Tianjin

Guangzhou

Ningbo

Shenzhen Suzhou

Xiamen Taiwan

An immediate success

In 2003, Decathlon opened its first store in Shanghai today it has 25 stores: China become the 4th country in term of outlet.

Decathlon has principally implemented its stores on the East coast, which is the most rich and developed part of the country. most strategic and developed economic areas to implement its stores

Counterfeiting of the concept and the products

Few sports facilities and low sensitivity of Chinese for hobbies 60% of the population live in rural areas and has no access to infrastructures Sports federations are young Very few sports are practiced and popular

Joint venture Joint venture with the Zhong Lu company

Emerging or possible problems

Face chinese market specificities

For the future…

Open more and more stores in big cities to have a big presence on the chinese market: key success factor

Develop implementation of little stores in the downtown areas of the cities to target high wages and urban population

Don’t forget to reference big brands in the stores…but also strengthen its «French» image and

values

Develop customers fidelity (cards…)

Exposing its products as a health protector: develop “Zen” products or Spa and Massage equipments

Look deeply into the future development of China

How to leverage the brand ?

Thanks for your attention

Questions ?