Decathlon: To Avoid Light Is "Heavy".

Zhang Mumu, a group called "Decathlon friend", set up a group called "Decathlon friend" for Decathlon (decathlon).

This is actually a family. Sports goods Chain store. For those who are familiar with Decathlon, this product has many kinds of products, which are cheap, shopping completely self-help, store layout is spacious and provide rich sports experience items and venues, to some extent, it is more like another IKEA.

At the flower shop in Pudong, Shanghai, the Decathlon store has 4000 square meters of experience space. The spacious shelves on the first floor provide customers with self-help shopping, and there is some noise on the two floor, because there are free sports venues and equipment such as table tennis. And on weekends or holidays, Decathlon stores will be more lively.

Fans compare Decathlon with IKEA, and Wang Gao, a marketing professor at CEIBS, is not unreasonable. Like IKEA, Decathlon's role as a sporting goods chain store also includes the entire industry chain from R & D, design, production to retail. Like IKEA, Ingvar Kamprad Leclercq, founder of Decathlon's parent company, Oxylane Michel, is also a global supplier chain enthusiast.

Non outsourcing Supply chain

"Decathlon almost covers all aspects of the sporting goods industry chain, from design, raw material procurement, production, logistics, to brand marketing, and final retail." Meng Dong, President of Decathlon Greater China, said that in the store of Decathlon China, there were on average more than 60 sports categories, more than 35000 sports products, and about 90% of its products came from Oxylane's own sports brand.

In Meng Dong's view, the core advantage of Decathlon lies in the integration mode of industrial chain. On the one hand, it can optimize the industrial chain, seize the high value-added links, such as design, retail, and rely on the sales scale of terminal to gain advantages in raw material procurement; on the other hand, for low value-added links such as production, through the "global layout" thinking, according to different regional labor costs, exchange rates, safety conditions and other products on the world's production to make adjustments. And inside Decathlon, each link and the independent accounting of different brands will not lead to the whole body. "If any production department has problems, the design department can immediately develop and produce in another production department."

"As Retailer We all hope to go along the industrial chain, so that we can include as many links as possible in the value chain. The most obvious advantage of retailers themselves in brand and production processing is that they do not need to invest in brands alone, but they can make full use of their own channel strength, so that the cost is relatively low and profits are relatively more. Wang Gao said.

In 1976, the first Decathlon store was born in the Northern French city of Lille. At first, it was just an ordinary sporting goods sales store, selling different brands of products. As its retail power became stronger and stronger, Decathlon discovered problems - the cooperation of brands in terms of price or supply of goods was very difficult, and in order to get rid of the upper reaches of the treaty, Decathlon began to March upstream brand and R & D field in the mid 80s of last century, and began to make layout in the world.

As early as 1992, Decathlon group has entered China, and has built production bases in 9 provinces and cities in mainland China. As an important part of its global supply chain, China's manufacturing paradise has provided strong support for its business expansion in Europe.

For example, in 1994, in the Shanghai production base set up by Decathlon, hundreds of teams were responsible for the production and procurement of the entire Decathlon group's textile sportswear in East China, and most of the products were exported to Europe. The production base was not only for production and processing, but also closely related to the R & D Department of the French headquarters, developing and producing textile sports products, and developing excellent suppliers in East China and making production management so as to ensure that the products were transported to the world on time and in quality. Shenzhen is the location of Decathlon bicycle factory in China.

In Decathlon China, more than 70% of the products in terminal stores are in China. "There is no intermediate link, which greatly saves costs", which can ensure that Decathlon, like WAL-MART and IKEA, continues to provide products with rich and low quality products for customers to meet the needs of the wider public.

Beat Nike?

In fact, the sporting goods industry, which is different from Nike and Adidas, is becoming more and more popular in Europe and the United States, such as Decathlon and Footlocker (NYSE:FL). According to Jingjing, a Chinese partner of Jingwei, the rise of retailer brands is a prominent feature of the sporting goods market in the past 20 years. These retailers have been able to meet the needs of popular market through powerful retail and terminal, and their growth speed has far exceeded that of some well-known sports brands. In the US market, for example, sales of Footlocker have exceeded Nike and Adidas. {page_break}

According to the introduction, the consumption group of sporting goods is a typical "Pyramid structure". There are few professional players, and as people pay more and more attention to health and quality of life, there are too many primary players who are mainly leisure and entertainment. According to Meng Dong's view, whether in China or Europe, the mainstream customers' demands are characterized by "pragmatism" and price oriented and value oriented. "Our position is to provide the best price performance for the public." Meng Dong said, and supporting this positioning is Decathlon's "power of supply chain".

This is the most obvious manifestation of the "blue goods" in Decathlon stores. Decathlon has a large number of products, and each category is divided into high schools, low grades and different grades. "Blue goods", which is recommended by Decathlon, is the best entry price product with high cost performance, or the most preferential commodity at each level, such as 49 yuan running shoes and 169 yuan water sports windbreaker, which is a "killing force" price in the market. The biggest feature of this product is low gross margin, but high inventory turnover. Prices are usually at least 20% lower than that of similar products in the market. In fact, careful observation at Decathlon's cash register makes it easy to see that most customers' shopping baskets are dominated by blue goods priced at 100 yuan or less than 50 yuan.

Pursuing low prices does not mean abandoning profit margins. According to Meng Dong's introduction, due to the homogeneity of the functional demands of the global consumers, there is a very important business principle in Decathlon: "unified design and global application", that is, in the Decathlon R & D center, there are 150 new projects on average every year, and these projects aim at the sports category instead of the different regions and markets. The design and R & D personnel should first consider the reduction of the cost while giving consideration to functionality, for example, their design project may be "whether a pair of running shoes can be reduced to RMB 49 yuan".

When the product design is confirmed, it will enter Decathlon's global production system. Decathlon produces products in 16 countries around the world. China is one of its important production bases. With the rapid growth of Decathlon's sales, there has also been a gap in production capacity. As more than 48% of Decathlon's products are made in China, they are gradually outsourcing in production, and have long-term cooperative relations with more than 300 Chinese enterprises.

"R & D center provides the best solution, while the upstream brand will minimize the cost in the production process." Meng Dong said. In the same way, the sales link also needs to reduce costs. "Decathlon will focus on the best cost performance from the location of its stores, emphasizing the convenience of transportation rather than the busy area. The publicity fee is also strictly controlled at 1% of the turnover, almost no advertising, mainly relying on word of mouth marketing."

According to the introduction, the cost control of this whole link ensures the profit margin of Decathlon, and also provides a space for the promotion of the consumption experience of key stores.

By the end of 2010, Decathlon had opened 535 shopping malls in 17 countries in the world with a turnover of nearly 6 billion euros. Behind it is the rich resources that Oxylane group (formerly known as Decathlon group, formally renamed in 2009) has across the industrial chain: 18 private brands classified according to sports categories, and production bases are distributed in countries and regions with relatively low cost from Morocco, Turkey and other Mediterranean coastal countries to China, as well as the second largest R & D centers in France, which are second only to Renault.

Decathlon China: report on "leapfrog"

Today, the production base in China has accounted for 48% of Decathlon's global output, showing the global position of the Chinese market. In 1998, Decathlon, which initially completed the production layout in the Chinese market, set up its Asian headquarters in Hongkong, and set up a factory outlet store in Shanghai and Guangzhou, adopting the "pre shop and factory" mode of operation. "This helps us accumulate experience in China's retail industry and train key talents to open stores in the future." Meng Dong said that in 2003, after 5 years of trial run by factory outlets, Oxylane group opened the first Decathlon sporting goods retail chain in Pudong, Shanghai, and moved its Asian headquarters to Shanghai to expand the Chinese market.

Since the beginning of this year, the "boss" has changed.

As president of Decathlon Greater China, he has led the Chinese market to accept the direct leadership of Decathlon global headquarters. Now, the report of Meng Dong has become the global CEO of Decathlon's global parent group, Oxylane group. This means that in the Oxylane group's current global organizational structure, Decathlon China and Decathlon belong to the same level globally.

This change is the result of the re adjustment of Oxylane group's priorities for its global market this year. According to Meng Dong's introduction, in the future development strategy of Oxylane group, the BRIC countries, including China, India, Brazil and Russia, have been identified as the strategic emerging markets that Decathlon will focus on in the future. Among them, the importance of the Chinese market is ranked first, and it is also the only regional market for Decathlon to move up the reporting power.

Oxylane's special courtesy to the Chinese market is not difficult to understand. According to the data provided by the State General Administration of sports in China, the revenue generated by the national sporting goods manufacturing and sales industry reached 160 billion yuan in 2010. Since 2000, the market is developing at an annual average growth rate of more than 20%. From "cheap workshop" to "strategic emerging market", for the Oxylane group which has already become mature and stable in European market, the market of China, which has a large population, rich residents and rapidly expanding consumer demand, is obviously self-evident.

"After this adjustment, we will become faster in decision-making and resource allocation." Meng Dong said. In fact, in the year before the group headquarters repositioned the Chinese market, Decathlon had significantly speeded up the expansion of the Chinese market: from January 2010 to the end of April 2011, the number of new shops opened in mainland China reached 12, and it was the 1/3 largest number of stores in China since 2003. According to the introduction of Meng Dong, a promise that must be fulfilled to the group headquarters of China led by China is to open 100 stores in the Chinese market before 2015.

In Decathlon China, since 2009, more is mentioned as a "target" is another set of figures: ten years, 999 stores. "This is not the market goal that we have to fulfill. Choosing these two sets of numbers is more about making sure our vision is up and down." In Meng Dong's view, after a long period of business practice, Decathlon's business model has been "proved" in the Chinese market. It's time to let go and copy. {page_break}

Since the Oxylane group adjusted the organizational level of Decathlon China at the beginning of this year, its own brands such as Quechua, Tribord and Oxylane have begun to plan for the establishment of the China office or the China region. These brands responsible for Chinese business related personnel have also been stationed in the office of the two floor of the office of Decathlon China headquarters in Longyang Road, Shanghai.

In Meng Dong's view, this is a good news for Decathlon's market development in China. The first thing to do is to make Decathlon China's supply chain more effective. Before the adjustment, these upstream private brands are higher than that of Decathlon China, and Decathlon China can hardly communicate directly with them. Moreover, these brands are faced with the whole Decathlon global market when they formulate market plans and allocate corresponding resources, and they will not give special consideration to the Chinese market which accounts for less than 1/10 of the current share. "They may not sit down and listen to the voice of the Chinese market before, but now is a must." Meng Dongru said.