Decathlon: Integrated Supply Chain Meets Challenges Of Localization

Lining P is facing the first loss in 8 years. Anta sports will reduce 475~575 stores this year after the number of stores decreased by 590 last year. PEAK's net profit plunged 60% last year, with 3 stores closing on average every day.

When the a href= "//www.sjfzxm.com/news/index_c.asp" > local sports goods brand /a > group was in trouble, the French retailer, Decathlon, who runs all kinds of sports and fitness products, chose to accelerate its expansion in China.

< /p >

< p > last year, < a href= "//www.sjfzxm.com/news/index_s.asp" > Decathlon < /a > altogether opened 16 shopping malls in China.

At present, the total number of Decathlon shopping malls in China is 57.

According to the strategic cooperation agreement signed by Decathlon recently with Vanke Group, one of the ways to open stores in the future is to expand by relying on Vanke Real estate projects. By 2015, the total number of Decathlon shops in China will reach 150, that is to say, three years from now, Decathlon will add nearly 100 stores in China.

< /p >

< p > < strong > self owned mode < /strong > < /p >

< p > it is not too much to say that Decathlon is the IKEA home in the sports brand, because it is similar to IKEA's operation mode. Whether it is a store or a product, it is quite a part of Decathlon itself.

< /p >

Take P as an example. Decathlon takes advantage of its own professional development team to build and store itself.

At present, Shenzhen, Chengdu, Ningbo, Jiaxing, Shanghai and other places have Decathlon's self built shopping malls, the number of 6.

Decathlon said it hoped that the proportion of Decathlon self built shopping mall in China could reach 1/3 in the future.

< /p >

< p > products, apart from a few brands Acting as agents, the vast majority of products are Decathlon's own brand.

Xie Ruiting, manager of Decathlon flower shop in Shanghai, said that the proportion of its own brand is 90%, while Decathlon hopes to eventually achieve higher coverage of its own brand.

< /p >

< p > this is why there are 30 yuan of men's T-shirts, 99 yuan and a pair of hiking "a target=" _blank "href=" //www.sjfzxm.com/ "shoes" /a "39 yuan, an outdoor mountain sports bag and so on in the Decathlon store.

< /p >

< p > however, the shoes and clothing commentator Ma Gang told reporters: "Decathlon's price is not low."

Its price range is relatively wide, its products and consumers cover a large area, very subdivision, high-end products also have, parity products are also many.

< /p >

< p > careful observation is not difficult to find that in every category of products, as long as the marked "blue trademark" is the lowest price commodity, these are either entry level products or the most preferential commodities at each level, and the price without blue trademarks will be gradually upgraded according to the function and style.

< /p >

< p > of course, Decathlon's money saving is also reflected in advertising and packaging.

Decathlon, the largest private brand in China, told reporters that von Yue, general manager of Mobile China, told the reporters that footwear products, for example, had no shoe boxes, and that shoes boxes would occupy more shelf space, logistics costs and sales costs would also increase, and salesmen had to spend more time sorting them out, all of which were costs. "

< /p >

< p > < strong > integrated supply chain < /strong > /p >

Another special feature of Decathlon P is that in addition to part of the production chain, including design, raw materials (market area) procurement, logistics to brand marketing, and final retail, Decathlon almost controls the operation mode of the integrated industry chain.

< /p >

< p > "our design center is in Europe, all the design samples are determined by Europe."

But different regions will improve according to their local characteristics, "for example, in China, we have a design team to adjust colors and sizes and local consumers' interests," Feng said.

< /p >

< p > another thing valued by Decathlon is logistics.

At present, Decathlon has two logistics warehouses in Beijing and Kunshan, and the goods are distributed to all stores from these two places.

It is said that Decathlon also plans to build a logistics distribution center in Southern China, a wider area.

< /p >

< p > compared with design and logistics, production is regarded as a lower value-added part by Decathlon, so most of them are outsourcing.

At present, nearly half of Decathlon's global shopping malls are from China, and in China, production is done in the form of representative factories.

Von said that Decathlon has a very high demand for foundries. In addition to technical management needs to achieve rigid targets, as well as environmental protection and cost control requirements, "we choose a representative factory often takes one to two years."

Feng said.

< /p >

< p > for Decathlon, some high value-added products are made by ourselves.

For example, there are wholly owned bicycle factories in France and Suzhou.

< /p >

< p > precisely because of the integrated supply chain system, Decathlon is very precise in the control of orders and sales.

Xie Ruiting told reporters: "after the goods are sold, the IT system will prompt the automatic repair order. According to the season and sales speed, the order will be automatically balanced, even if the order is soaring, the goods will be able to keep up, and there will be no stock in the store.

On average, our stores replenish two times a day in the afternoon.

In this way, Decathlon does not need to purchase over a large quantity of goods at once. Instead, it can easily sell products and replenish it with quantity.

< /p >

The last link of the P industry chain is marketing, which is also a major feature of Decathlon.

Like IKEA, Decathlon also promotes experiential marketing.

< /p >

< p > reporter saw in Decathlon flower store that many goods were labeled with "try me" in front of them.

In open stores, consumers can play several rounds of table tennis, do some fitness exercises, ride two cycles of bicycles, even if they do not shop.

Because subdivision is rich, consumers can also DIY and freely assemble equipment according to their own preferences.

< /p >

< p > < strong > localization challenge < /strong > < /p >

< p > because Decathlon's financial data has always been a mystery because it is not a listed company.

Many people think that such a large-scale private mode requires considerable manpower and material resources. In addition to the considerable support given by the group headquarters, Decathlon may face a real problem of long return on investment in China.

Take the private stores as an example, although the high rent is not required, the cost of building commercial real estate in China is much higher than that of foreign countries.

< /p >

< p > although no specific profit figures were revealed, Decathlon told reporters that Decathlon made a good profit in China, and all the stores were profitable.

And the growth rate of the Chinese market is also ranked first among Decathlon worldwide.

A related person told reporters that with the flower shop as an example, the average monthly sales volume was up to 10 million yuan, but the profitability of the shop was not the best.

< /p >

A p analyst, an analyst said, because Decathlon could lower the gross profit margin of single products and win the sales scale. The average profit rate of the Decathlon was at least 40%, while the average profit margin of most domestic sports brands was less than 40%.

< /p >

< p > however, Decathlon also needs to improve. For example, Decathlon has wide selection of sports equipment and outdoor sports, but it is not very strong in basic equipment such as sports shoes and clothing.

< /p >

Besides, P also has some challenges in Decathlon's own brand product mode.

Decathlon's own brand manager told reporters that Chinese consumers, Decathlon's own brand awareness is still not strong, most brands do not even have Chinese names, consumers say Decathlon shopping, it will only think that this product is Decathlon, but which brand is still unclear.

This is also a key point for Decathlon in the future, that is, to strengthen the influence of its own brand.

< /p >

< p > < strong > on Decathlon: < /strong > /p >

< p > Decathlon, from France, is the largest sporting goods retailer in the world. It was founded in 1976 by Michel Relek, the first shop in Nlos, a small village near Lille, France.

In 2003, Decathlon entered China. Up to now, (2013.2) it has nearly 60 shopping malls in 25 cities across the country.

< /p >

Besides P, Decathlon's parent company orcis group provides support to the sports industry chain and provides a rich brand name front. It is divided into 20 different brand names according to the different sports categories.

For beginners and professional athletes, Decathlon can provide sports such as a target= "_blank" href= "//www.sjfzxm.com/", "dress less than /a", equipment and all kinds of creative sports products, and its whole industry chain control mode makes its products have high performance price ratio.

< /p >