China Business Daily (Reporter Zhou Ziyi Wang Yifei) A few days ago, the French sports group Decathlon released its financial report, its sales in fiscal year 2023 will be 15.6 billion euros, a year-on-year increase of 1.15%, and its net profit will reach 931 million euros, a year-on-year increase of 0.9%.
In the past two years, Decathlon's revenue growth has slowed down significantly, and at the same time, the market has been questioning the price increase of its products. Decathlon, which has always taken the ultimate cost-effective route and is known as the "affordable supermarket" of sporting goods, is it going to enter the high-end market?
Decathlon stores. (PHOTO COURTESY OF CNSPHOTO)
Product prices are rising, and personnel changes are frequent
In the Chinese market, Decathlon is favored by sports enthusiasts for its cost-effective products. Unlike other sports brands, Decathlon has a wide range of products, with more than 40 private labels alone, covering popular sports such as basketball and football, as well as niche sports such as equestrian and diving.
Affordable and complete retail sports products have made Decathlon comparable to "Honey Snow Ice City" in the "sports brand world" where thousands of yuan are often worth thousands of yuan.
However, in recent years, Decathlon, which is known for its high quality and low price, has quietly moved towards the "high-end" market.
"The Decathlon backpack that I bought for nearly 49 yuan two years ago has now risen to almost 90 yuan. On the Xiaohongshu platform, Ms. Fu, a consumer, was surprised to share a screenshot of the purchase of an "appreciation" backpack.
The price of the backpack purchased by Ms. Fu has risen by 40 yuan. (Picture from the Internet)
The reporter noticed that in addition to backpacks, Decathlon's down jackets, jackets, fleece jackets and other items have also increased in price. Some consumers found that the price of a certain Decathlon jacket was 150 yuan, and the matching fleece jacket was 100 yuan, while the same jacket is now 235 yuan after discounting, and the fleece jacket is 130 yuan, and the price of the suit has risen by more than 100 yuan.
Decathlon has long had a "precursor" of price increases in China. It is reported that in 2021, Decathlon raised the price of goods by about 1/10 of Taiwan, China by about 26%. Decathlon responded that the price increase was affected by the cost of raw materials and transportation.
However, as the cost tends to stabilize, the price of Decathlon's products is still changing, and its high-end intention is gradually emerging. This can also be seen from Decathlon's frequent personnel changes.
In the past two years, Decathlon's management has changed frequently. In 2022, Barbara Martin Coppola, a professional manager in charge of digital business at several large companies such as Google, YouTube, and IKEA, became the CEO of Decathlon.
In addition, at the beginning of this year, Decathlon's senior management in the Chinese market also ushered in personnel adjustments. Zhang Xiaoyan, who was previously in charge of Lululemon's brand in China, served as the CMO of Decathlon China. In recent years, Lululemon has been expanding its territory in the domestic high-end yoga apparel market.
Decathlon has welcomed two new senior executives, which may empower its transformation.
Renew the brand and sponsor the Olympic Games
Extending to the high-end market, Decathlon also released two signals: one is to renew the brand, and the other is to sponsor the Paris Olympic Games.
3月，迪卡侬宣布焕新全球品牌，发布全新标识，推出全新宗旨“Move People Through the Wonders of Sport”。 在迪卡侬48年的品牌发展历程中，这是第4次更新品牌标识。
The renewal of the brand identity also means a change in the brand strategy. Celine Del Genes, Decathlon's Global Chief Customer Officer, said: "When we want to be seen not just as a retailer, but as a sports brand, we need to have a richer brand image, and our strategy is to build a multi-disciplinary professional sports brand. ”
In order to transform from a sporting goods retailer to a professional sports brand, Decathlon has brought a new strategy "North Star": to shrink and reorganize its business lines, classify the products of different brands into nine sports categories such as outdoor sports, water sports and mountain biking, and set up four professional brands of road cycling, running, rock climbing and hunting, including some high-end brands with higher prices.
According to foreign media reports, Decathlon rebranded in the hope of taking advantage of its status as an official sponsor of the 2024 Paris Olympics to enhance brand awareness. It can be seen that Decathlon's previous customization of a full set of eco-design clothing for volunteers of the Paris Olympic and Paralympic Games has attracted public attention.
As we all know, for sports brands, marketing through large-scale sports events is a better opportunity for brand exposure. Partnering with the Paris 2024 Olympic and Paralympic Games may help Decathlon develop into the high-end market.
It should be noted that Decathlon wants to go "high-end", which is not just an adjustment of brand image. At present, Decathlon is urgently seeking new profit growth points. Although Decathlon is a sports retail giant, its sales in 2022 will reach 15.4 billion euros, only inferior to Nike and Adidas. However, its net profit margin is only 5.9%, which is far lower than the first two brands.
At present, the demand for the low-end mass sports market is relatively saturated, and if it wants to increase profits, Decathlon has to reach out to the high-end market, but the brand transformation is not easy. Decathlon's senior management previously said that it is not easy to be a high-end brand, and Decathlon's core business philosophy is still low-threshold sports, and the two can go hand in hand.
Perhaps, the "two legs" of cost-effective and high-end can lead Decathlon out of the "dilemma" of low profits.