Decathlon: Accelerate The Acquisition Of China'S Goods Market

Recently, a nationwide sports program of the General Administration of sports is being carried out quietly.

Surprisingly, Nike, Adidas and Lining, Anta and other famous sports brands were not listed in the list of Sports General agencies, but Decathlon, a previously unknown sporting goods retailer, was on the list.

Decathlon, a French sporting goods retailer, now has more than 600 stores in the world, but in the Chinese market, the number is less than 50.

In sports such as Nike, Lining, Anta, PEAK, etc.

While the performance of retailers in China has gradually slowed down, Decathlon has started to compete with them, and the Chinese market is becoming its next high-speed development goal.

The cooperation with the General Administration of sports is considered to be one of the moves of Decathlon to expand channel influence.

In response to the current situation of China's sporting goods market and its own strategic plan, Kang Peng ya, President of Decathlon Greater China, has received an exclusive interview with reporters (NBD).

Accelerate China's market share

After reaching the growth ceiling, the domestic sporting goods brands entered a period of adjustment this year - leader Lining's growth slowed down, Anta's performance was the lowest since 2009, and PEAK's orders increased by 9.5% in the second quarter of this year, the lowest since 2009.

In the overall market environment is not optimistic, Decathlon suddenly made efforts to speed up the layout of the Chinese market.

NBD: Decathlon has speeded up its opening up this year, does it mean that it will increase investment in the Chinese market? What is Decathlon's goal and plan in China?

Connecticut: Decathlon has entered China 20 years ago, but it came in as a producer; 10 years ago, Decathlon began to develop as a retailer in China, but in the past 9 years, only 39 stores have been opened in China.

This year is the year of Decathlon's accelerated development. In the future, China will be the focus of Decathlon's development and will invest more.

Decathlon will open 15 new stores in China this year, and will have 54 stores by the end of 2012. There will be 100 stores in 3 years, and the number of stores will exceed 150 in 2015.

NBD: Decathlon has more than 600 shopping malls in the world. Compared with Decathlon, the number of shopping malls in China is relatively small.

Does Decathlon plan to enter more cities in China in the future?

Kang Pengya: at present, Decathlon has 46 shopping malls in 21 cities in China. In the next two weeks, Decathlon will open its first store in Shenyang, and the third store in Suzhou will also open.

At this stage, Decathlon will strengthen the development of the first tier cities, but the two or three tier cities and the Midwest market have larger space and smaller competition, which is more suitable for the development of sports related industries.

NBD: Decathlon's current rapid development will compete with upstream brands. What do you think?

Kang Pengya: unlike other brand retail terminals, we are the only brand in the sporting goods market that makes the whole industry chain, covering design, R & D, logistics and sales. At present, we have covered more than 60 sports events.

When competitors are concerned about basketball, football, swimming and running, we have already arranged for equestrian events, rock climbing and other projects.

In sports

When the market downturn, our equipment products and equipment still have the market.

Developing new markets is good for the industry.

The domestic sporting goods industry is trapped in performance, and the backlog of stock generated by radical expansion is inevitable.

In the first half of this year, the amount of Li Ning Co receivable trade receivables reached 2 billion 516 million yuan, an increase of 422 million yuan compared with the end of 2011, and resulted in a rise in the provision of bad debts for Li Ning Co from 11 million 400 thousand yuan at the end of last year to 61 million 220 thousand yuan. PEAK's 2011 Annual report also showed that the stock at the end of the year was 1 billion 133 million yuan, an increase of 40% over the previous year.

Apart from domestic brands, Nike also has inventory problems.

By the end of 5 2012, Nike's stock had reached US $3 billion 350 million, an increase of 23.39% over the same period last year of 2 billion 715 million US dollars.

NBD: at present, many sports brands are in the backlog of inventory. What is the situation of Decathlon?

Kang Pengya: over the past two years, many competitors have overstock, but this phenomenon is unlikely to happen in Decathlon, because we have a complete industrial chain, and the communication between retail terminals and groups is very smooth, and there will be no such problems.

NBD: Nike, Lining, Anta and other brands have begun to slow down in the current market. Is Decathlon worried about the slowdown in terminal performance?

Kang Pengya: we have noticed that the performance of our competitors is not good at present.

I don't think the market is slowing down. Instead, I think we should create a bigger market.

The development of new market is beneficial to every sports retail brand. Our competitors are not other sports brands, but the TV media and fast food. They let consumers do not exercise, we will lose the market.

NBD: domestic sporting goods distributors are regionalism. If Decathlon speeds up the layout of the country, it will face challenges from other local channels. How does Decathlon respond?

Kang Pengya: if there is a strong competitor in the area, it can only illustrate one problem, that is, the local market is very good, which is a very good sign for us.

Having a good competitor is far better than not having a competitor. We can also learn and understand the retail mode of our competitors.

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Price rises to become brand killer

The sporting goods industry is in a predicament, and rising prices are an important factor.

Because of price reasons, consumers tend to reduce consumption of sporting goods.

Coupled with the substantial increase in the price of domestic sports brands, sales pressure has increased dramatically.

Anta announced the two order meeting in February and May this year.

Both categories and clothing products have raised their prices in the two digit range. The price increase in the first half of this year is almost the same as the cumulative increase in the past four years. Meanwhile, in July, PEAK announced that footwear and clothing rose by 15% and 17% respectively.

Analysts say that the competitiveness of Anta products is almost completely lost under the market of 250 yuan or less. Nike and Adidas are gradually eroding the market through factory stores.

NBD: domestic sports products continue to rise in price. Is Decathlon's price rising?

Kang Pengya: at present, we have a small part of products from other brands, but we mainly operate independent products.

Autonomous products communicate more smoothly with the internal sales terminals, and are more efficient in choosing products.

Unlike other brands, we have a very simple bargaining model with sports brands. We are more concerned with long-term profits than short-term interests.

I don't know the strategy of other brands, but for Decathlon, we serve the rich.

Instead of selling a product with a price of 10 yuan, Decathlon prefers to sell 10 items with a price of only one yuan, because this allows more people to participate in sports.

NBD: while Decathlon keeps its own concept, localization is also constantly strengthening. How can we maintain the balance between the two sides?

Kang Pengya: talent is the key.

We currently have 4000 employees in China and 10000 in 3 years, 1000 of whom need management.

If we only recruit from overseas students, we will not be able to solve the problem. We hope to recruit talented people who love sports in China.