Nike next door was crying. ”
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来源:有数DataVision(ID:ycsypl)
作者：黄茜琳 | 编辑：胡晓琪 | 制图：贾颖
At the turn of the century, when Decathlon planned to open its first store in China in Shanghai, it first hit a wall in terms of location.
Originally, Decathlon's opening stores around the world was a routine: opening a 4,000-square-meter store to facilitate consumers to come to buy with their families. But in Shanghai, it has been looking for a long time, and finally it can only reluctantly open a 2,000-square-meter store in the underdeveloped flower and tree area.
The excitement belonged to others: thousands of buyers lined up all night to buy Nike's "1st Game" at Beijing's Oriental Xintiandi, and Li Ning's revenue exceeded 1 billion yuan for the first time, and it was preparing for its launch the following year.
didn't show his face on CCTV, and it was doomed that Decathlon at that time could only be the nobody in the hearts of the Chinese people. Any domestic brand on the market has more audience popularity than Decathlon.
But 20 years later, these sports brands can't laugh collectively. Nike and Adidas are stuck in tens of billions of dollars in inventory, and Li Ning is strategically undecisive, and fashion and sports are both in vain.
In the past two years when the whole industry was mired in an inventory crisis and the mass sports brand was collectively stalled, Decathlon, which was not favored at the beginning, won effortlessly: it continued its steady growth momentum, with global revenue of 15.4 billion euros last year, up 11%, and a net profit of 923 million.
What's even more rare is that at a time when consumers are eager to take a magnifying glass to examine the texture of the product, Decathlon has almost one-sided praise: people call it a "poor ghost paradise", and its name is on a par with McDonald's;
After 20 years of being nameless, why did Decathlon suddenly turn over?01 Costco in the sports world
In 1976, when Decathlon was born, the French sports trend was just beginning to sweep the streets, and 4 out of every 10 people were enthusiastic about sports[1], and the sales network of sports brand stores spread all over the country, successfully shaping Adidas waffles into a hot and popular item.
At that time, the channel provider that was entrenched in the mainstream market was Intersport, and Decathlon was just a fledgling little brother in comparison.
But this little brother's family background should not be underestimated. The founder of Decathlon, Michel Relec, his cousin is the founder of Auchan.
So, when Michel was about to bet on sports trends and start a small business, his first thought was to replicate the family's experience and apply the proven hypermarket model to the fast-growing sporting goods industry.
Unlike Intersport's strategy of opening a small store in the city center and expanding rapidly with a franchise model, Decathlon chose to open a large store in the suburbs in person.
At that time, this method had at least two advantages: one was that it could carry more categories with a larger area, 900 and 1500 square meters were just basic exercises, and at the same time, it could also form a differentiation with Intersport; second, through high turnover + scale, the sports brands were sold cheaper than specialty stores.
Although the theoretical model is perfect, there are many cases where it is miserably deformed in practice. However, Decathlon, the chosen son, relied on his relative Auchan supermarket to completely play this model.
In order to rub off the traffic of Auchan, Decathlon directly opened its first store in the Auchan parking lot, and there was an endless stream of people who drove to buy it, and they bought many cheap Decathlon products. The first day of the opening was a great success, with many people willing to bend their heads and insist on buying under the low ceiling, and sold 9,999 francs on the same day[2].
At this time, Decathlon would rather make less money itself and use low prices to attract fans, and its popularity was earned, but it also disrupted the brand's price system and laid the root cause.
In fact, as early as 8 days before the opening of the first store, the well-known "Logo" brand refused to supply bikes to Decathlon due to its low retail pricing[3]. A month later, Adidas also stopped supplying Decathlon.
Decathlon, which is not deeply involved in the world, has provoked the wealthy brands in this way. The reason is very simple, there is usually a game relationship between brands and channels, and the right to speak is in the hands of the stronger party.
Seeing the empty shelves, Decathlon had no choice but to sue in anger while posing as the manager of a sports club to buy everywhere [3].
Eventually, Decathlon approached the Leleu factory and built a batch of metallic grey Decathlon bicycles in different sizes, while brands such as Adidas, which refused to sell them, lost the case the following winter, and Decathlon put their products on the shelves one by one and spent several years of steady expansion[3].
Photo source: Decathlon
But the good times did not last long, and in 1986, the "logo" that had rejected Decathlon came again, and it euphemistically said that it would reduce production and no longer be able to meet Decathlon's bicycle orders. Michelle was completely furious and said, "We will design and create our own products." [4] In the same year, Decathlon's first self-produced bicycle, the Challenger, was launched.
At that time, many large retailers began to make their own brands, but they were far from high-quality and low-priced. Decathlon's products were not very good at first, but it has the charm of Huaqiangbei in terms of selling ideas: whatever big brand is popular, it will imitate it, and the price will always be 15%~20% lower. Once created, the original brand is removed from the shelves[1].
In 1996, Decathlon began to vigorously promote its own brand strategy, each brand belongs to a sport, and the word quality began to appear frequently. In 2005, a $49.9 2-second quick-open tent was launched, which really sent Decathlon out of the circle. [1] A single single product brought in nearly 400 million euros, and more than 40 imitations appeared on the market at one point[1].
Decathlon, who has copied excellent homework for more than 20 years, finally waited for the time to be copied homework.
By 1997, Decathlon was no longer dependent solely on brands: its own brands accounted for 52% of its turnover[1]. Quietly changed from Auchan in the sporting goods industry to Costco.
At this time, Sam's own brand Member's Mark has just been born, and Costco's own brand kirkland's health care products will not arrive in Chinese mainland for 22 years. In terms of its own brand, Decathlon has long understood it, but how does it do it?02 cost-effective password
For quite some time, Decathlon barely advertised its brand, but that didn't stop it from becoming a master of marketing.
For Decathlon, the store is the best drainage tool. Just like Costco's free tasting is used to improve the duration and stickiness, Decathlon has set aside 15% of the store area for people to play roller skating, archery and fitness for free, plus loose parking benefits, it will naturally become a poor Disney.
It doesn't matter if you don't like to play, put some explosive products to drain the stream, and someone will always leave satisfied. For example, the 12.9 yuan Quechua 10L backpack directly increased the number of checkouts in each supermarket by 15,000 people [2].
Since 2016, there is no time and place for returns, and even some people can change their pants if they wear out their crotch.
At a time when consumers are equally lacking in awareness of each brand, a strong after-sales service can undoubtedly dispel purchase concerns to the greatest extent. For example, the aforementioned 12.9 yuan backpack has a 10-year warranty.
Of course, the most important thing is that it's just too cheap.
So cheap that some brands even believe that Decathlon introduced itself to set off its own brand [3]. And there has been a trend towards cheaper prices over the years, with average prices in 2015 being 68 cents lower than in 2014 [2].
On the cheap technical work, Decathlon, a master of picking doors, has something to say:
First of all, unlike Nike and Adi's brand premium business, Decathlon essentially earns hard-earned money with small profits and quick turnover. This determines that Decathlon cannot take Nike's asset-light route, but may intervene in the industrial chain in many places:
In R&D and design, procurement and production, logistics and warehousing, channels and marketing, Decathlon only relies more on suppliers on the production side, and builds what can be built in other aspects. For example, the size of China's four major logistics centers is equal to 1/3 of Shanghai Disneyland. However, as the process is simplified and large-scale production is scaled, these costs will be amortized in the later stage.
Overall, it has the following features:
1) The site is mostly located in the suburbs, and there are two ways to purchase land for self-construction and developer cooperative leasing, and the lease for up to 20 years can greatly reduce the rental cost.
2) Decathlon is a warehouse-style store, which can save a lot of money for decoration and renting a warehouse.
3) Using the RFID automatic inventory robot, it only takes 1.5 hours to inventory a 4,000-meter store, which greatly reduces labor costs [5].
4) After being a distributor of Adidas, Decathlon vowed to only do DTC, which could not let middlemen make the difference, and naturally did not have the trouble of Nike's endless inventory.
5) In a media interview ten years ago, the media manager of Decathlon China revealed that Decathlon almost does not advertise, and the marketing expense rate is less than 1%[6]. Sponsorship of events and cooperative teams have only intensified in recent years. In contrast, the marketing expense rate of sports brands basically starts at 30%.
Secondly, although Decathlon has as many as 35,000 SKUs worldwide, it is still very efficient. In 2014, the number of days of inventory turnover reached 40.1 days[7], compared to 58 days for Anta in the same period.
In the face of complex supply chain management, Decathlon's idea is to do subtraction. On the one hand, it supervises the supplier factories with production offices stationed in different regions, and on the other hand, it ranks the suppliers to survive the fittest. In recent years, the number of its strategic suppliers has steadily increased, with 44 fewer Tier 2 suppliers in the last year alone, to ensure that high-quality capacity can continue to work.
Under this cost-leading model, Decathlon's net profit margin is only 6.5%, far lower than Nike's 11.6% and Li-Ning's 17.6%. However, it relied on the small profit of 1.2 billion products sold annually, supporting its net profit of up to 910 million euros, which is 1.65 times that of Li Ning.
But the question is, why did Decathlon, which has always been known for its cheapness, suddenly become popular this year? 03 Replacement business
In the past few years, it may be the most frequent years for popular sports brands to feel that they are "not good".
The characters who once stood at the center of the stage have taken on new faces: Lululemon for yoga, Salomon for running, Descente for skiing, and Archaeopteryx for jackets......
is as strong as Nike, but it is also powerless in the face of endless subdivisions of outdoor outlets. However, Decathlon, which is neither mixed with the mass brand circle nor does not match the high-end, has become the biggest winner.
In fact, after these high-end brands have led the way, they may not be able to fully meet all the needs themselves. A large number of consumers who are too expensive have turned their heads and entered Decathlon. For example, last year, a large number of consumers who were frightened off by the high price of Archaeopteryx directly bought the MH500 jacket of 559 yuan from Decathlon for "Archaeopteryx Flat" out of stock.
In this way, Decathlon has taken on too many such replacement needs from all directions: in 2020, when yoga became popular, Decathlon launched the yoga brand Kimjaly, in 2021, camping became popular, and the "new" firewood stove launched in Q1 exceeded the sales volume originally planned for one year, and in May of that year, the production capacity of the camping category was scheduled for 2022 [8].
In addition to outdoor trends, some spooky winds can also benefit Decathlon. [9] After the release of Fifty Shades of Grey, sales of its equestrian accessories exploded.
But there are so many brands on the market, why did Decathlon catch the wealth of the sky?
Speaking of which, Decathlon has to kowtow to other brands. On the one hand, the main category of popular sports brands is shoes and clothing, which itself is aimed at running, basketball, and football, which can be carried out lightly. And camping, skiing, and frisbee, which have become popular in recent years, often need equipment blessings. This just hits the short board of the Volkswagen brand.
On the other hand, the popular brand occupies the minds of consumers with shoes and clothing, which in turn is limited by the stereotyped mind. For example, it is mentioned that Nike will have a hard time bypassing AJ, and even if it launches kayaks overnight, no one will necessarily pay for it.
Decathlon is different, it is a full-category replacement business in itself.
At one point, it held 85 private labels (now 36), covering more than 80 sports, and each category is divided into different price bands. The bicycle alone provides a price range of 999.9~20999.9 yuan, which can meet the needs of beginners to advanced players.
With a firm grip on the best quality in the price range, Decathlon's business looks effortless: no matter where the wind blows, it can always lie down and win. 04 Epilogue
The most complex and clever investment for a company is to bet on an era that is about to take off.
More specifically, only at the turning point when conservatism overrides everything and cost performance prevails, there is a window of several years for the market to be dominated by less distinctive brands.
That's where Decathlon comes in. In 1998, Decathlon saw the huge consumption potential of the Chinese market through a factory outlet in Xinzhuang, Shanghai. Five years later, as soon as it received the approval of the wholly foreign-owned enterprise, Decathlon opened its first store in Shanghai and resolutely moved its Greater China headquarters from Hong Kong to Pudong.
Looking back at its important nodes, you will find that every epic leap forward of its time keeps up with the pulse of the times. This was true in France before, and it is also true in China today.
Interestingly, in October this year, Decathlon was considering selling a minority stake in its Chinese subsidiary at a valuation of around US$1 billion[10]. Decathlon seems to be planning to cash out of China's high positions and bet on the Indian market instead. According to the Financial Times, Decathlon has pledged to invest €100 million in its retail, logistics and manufacturing operations in India over the next five years.
In recent years, India's sports industry has risen rapidly, and in fiscal year 2023, Decathlon in India has soared by 37% to 39.55 billion rupees (about 3.4 billion yuan).
Soon, perhaps, the next French miracle will be born again.
Resources:
[1] Decathlon and the 2 Second Tent: From Discount to Innovation(1976–2008), The International Journal of the History of Sport
[2] Decathlon, you can't learn, and you don't deserve to learn, half-Buddha immortal
[3] The history of the Decathlon brand,e-marketing.fr
[4] Manufacturing in Ethiopia: Decathlon's Partnership Model，Dorothée Baumann-Pauly, Lorenzo Massa, & Natasja Sheriff
[5] How to bring more than 80 kinds of sports to Chinese users?
[6] [Case] Decathlon's word-of-mouth marketing is revealed, and it is successfully marketed
[7] The market trend of a largescale retail's store: Decathlon Italy，Antonella Baccarin
[8] China Camping Market Research Report: Equipment Industry Chain, Camp Services and Business Opportunities Behind the Boom, Lazy Bear Sports
[9] Decathlon on the summits, LesEchos
[10] Decathlon Weighs Minority Stake Sale in $1 Billion China Business, Bloomberg
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