Decathlon is not willing to be just an affordable sports retailer. On April 17, "Has Decathlon begun to abandon poor ghosts?" appeared on Weibo's hot search. The 99.9 yuan mountaineering skirt rose to 129.9 yuan, the 49.9 yuan mountaineering insoles rose to 59.9 yuan, and the 14.9 yuan children's bag rose to 39.9 yuan...... Decathlon's price increase this time involves multiple categories. Set up the chief marketing officer in China, brand upgrade, high-end transformation...... Decathlon is changing the way it used to play, and the price increase may just be the first card Decathlon plays.
Decathlon's price hike has spread to multiple products. Consumer Xiaoyi told a reporter from Beijing Business Daily: "Around 2020, when I bought a base shirt in the Decathlon discount area, the price was almost always around 29.9 or 39.9 yuan, and now I have to get 79.9 after the discount." ”
"The 99.9 yuan climbing skirt rose to 129.9 is the most unacceptable. Muzi, who likes the Decathlon brand, complained, "It's gone up 30 yuan, and I don't want to buy it in the future." Beijing Business Daily reporter learned that Decathlon sports insoles R700 has also risen from 49.9 yuan to 59.9 yuan, fleece jackets have risen from 249 yuan in 2020 to 499 yuan today, and children's backpacks have risen from 14.9 yuan to 39.9 yuan now.
In response to the price increase of most of its products, the customer service staff of Decathlon flagship store did not give a clear response, only saying: "The intensity of the activity is different, and the discount is different. ”
A reporter from Beijing Business Daily learned that Decathlon's price increase is currently more obvious in the domestic market, and there is no obvious price increase in the overseas market.
Xiaoguang, who is in Australia, said that he did not feel an obvious price increase, but from the perspective of selling price, the price in Australia was originally much more expensive than in China. According to the information provided by Xiaoguang, Decathlon's more popular MH500 pants are priced at $129 (about 933.7 yuan) in Australia and 349.9 yuan in China. In addition, the price of the French MH500 jacket is 99 euros (about 761 yuan), and the domestic price is 599.9 yuan. There are also many consumers in Germany and Japan who say that Decathlon is more expensive than in China.
On issues related to price increases, a reporter from Beijing Business Daily called Decathlon for an interview, but did not receive a reply as of press time.
The industry believes that Decathlon's price increase is related to cost. In fact, based on the rise in raw materials and transportation costs under the large environmental impact, many clothing and sports brands have seen product price increases. For example, Uniqlo, due to cost pressure, announced in 2022 that it would increase the price of some products, and then in 2023, Fast Retailing Group CFO Ken Okazaki once again revealed that some autumn and winter products will increase in price. In addition, according to Tmall sales data, in the past year, domestic and foreign brands, including Beimian, Arc'teryx, Columbia, Camel, Banana, and Pathfinder, have all seen price increases of 2.8%-58.9%.
Zhan Junhao, a well-known strategic positioning expert and founder of Fujian Great Aim Brand Positioning Consulting, said that various factors such as raw material costs, transportation costs or changes in market supply and demand have led to Decathlon's price increases. In Zhan Junhao's view, Decathlon, as a large sporting goods retailer, will inevitably have a certain impact on the market due to the adjustment of its product price strategy. For Decathlon, which has always been known for its affordability, the price increase may have an impact on its brand image and consumer loyalty. ”
Cheng Weixiong, an independent analyst of the fashion industry and founder of Shanghai Liangqi Brand Management Co., Ltd., believes that due to the rising costs caused by rising prices, it is understandable that Decathlon has made appropriate increases in product prices.
"Affordable and diverse sports retailers" has always been Decathlon's original intention. Since its establishment in 1976, Decathlon has been doing one thing - in order to achieve the ultimate cost performance, try to reduce costs.
In order to dilute the cost as much as possible and compress the middleman to make the difference, Decathlon has formed a development model of the whole industry chain, that is, R&D, production, logistics, etc. are all in their own hands, which means that each product of Decathlon is responsible for all from design to production and finally reaching the hands of consumers. There is a saying in the industry that Decathlon's designers first get the sales price of the product, and then start from the design style and design structure on this basis, and finally the designer should work together with the manufacturer who can provide the price system to complete the whole process of material selection, proofing, finalization and packaging. It is also this model of the whole industry chain that Decathlon has achieved the ultimate low price.
In addition, in order to reduce costs, Decathlon almost does not market or advertise. According to public reports, Decathlon has publicly stated that Decathlon's advertising expenses account for only 1% of its turnover, and about 50% of new customers come to Decathlon's offline shopping malls through "word of mouth" from old customers who have come to the store to experience it.
The ultimate price-performance ratio has made Decathlon a well-known affordable sports retailer. It is understood that Decathlon has 1,749 stores in 78 countries and regions around the world, with a team of 101,000 people. In the Chinese market, Decathlon has opened more than 290 stores nationwide since its entry in 2003. Its performance scale once reached 15.6 billion euros in 2023, although it is not as large as Adidas's 21.427 billion euros, but it also occupies a place in the sports market.
However, the "profits" that Decathlon's small profits and quick sales model can bring are constantly decreasing. According to the financial report data, Decathlon's sales in fiscal 2023 will be 15.6 billion euros, a year-on-year increase of 1.15%, compared with the 12% increase in 2022, a significant decline. This compares to a 21.3% increase in sales in 2021. In addition, in 2023, Decathlon's net profit margin will be 5.9%, the same as in 2022. In contrast, the net profit margin of sports brands such as Nike and Adidas is generally higher than 10%.
In Cheng Weixiong's view, Decathlon's price parity is difficult to have an advantage in the price game compared with the more volatile online business in the domestic market.
When small profits and quick sales no longer work, Decathlon needs to change, and price increases may be just the first step.
At the beginning of 2024, Decathlon, which is known for never advertising or marketing, has set up an unprecedented position of chief marketing officer in China, and appointed Zhang Xiaoyan, the former brand head of lululemon in China, to lead Decathlon's marketing business in China. In the following March, Decathlon announced a new upgrade of its brand image to the world. At the same time, Decathlon also launched a new brand strategy "North Star", under the framework of this strategy, Decathlon has refined and classified its brands into nine brands, involving outdoor sports, water sports, fitness sports, golf and other all-round sports fields. The brand upgrade of Decathlon emphasizes more on the sportiness and professionalism of the brand. At the same time, a number of Decathlon professional sports brands have begun to carry out a lot of marketing, such as sponsorship cooperation for athletes and professional events. Now, these moves seem to be preparing for Decathlon's high-end.
Barbara Martin Coppola, CEO of Decathlon, said, "In 2023, global enterprises are facing unprecedented market challenges. At Decathlon, we have chosen this moment to upgrade our brand and lay a solid foundation for long-term development in the future."
However, Decathlon probably did not expect the price increase to attract such attention. There is still a lot of uncertainty as to whether consumers will buy its price increase and premiumization.
In addition, the development model of Decathlon's whole industry chain means that the products are not different in any region, and they are all products under a unified template, and whether this integrated global unified model can adapt to consumers' pursuit of more refined and high-quality products after high-end is the first problem that Decathlon has to face in high-end. After all, in the face of the ultimate cost performance, the shortcomings such as pants stuck crotch and some clothes that are not suitable for Asian figures can be tolerated, but after high-end, it may not be so easy.
Cheng Weixiong said that parity to high-end requires a gradual process, Decathlon's positioning from parity to do adjustment is also helpless, but also based on the current situation of omni-channel operation and development in the Chinese market, the rapid iteration of online business products has brought a great impact on traditional domestic and foreign brands, Decathlon based on the Chinese market on the basis of popular consumption to change the previous parity is the inevitable brand upgrade, which is also based on the demand for quality and service. "The more affordable the quality and service, the more difficult it is to control, and it is easier to improve product quality and user service experience by properly doing the upward force of the brand. ”
Regarding high-end, Decathlon said: "Decathlon does intend to develop high-end brands, but this does not mean that Decathlon will completely lose its parity advantage. ”
Beijing Business Daily reporter | Guo Xiujuan, Zhang Junhua
Edited by Topol