Company presentation

2. Company presentation

3. Distribution of turnover: 2007 2010 What you have to know about Decathlon … • History • 1986:Products designer • 1996: Brand designer • 2000: Technical brand designer • 2008: Decathlon belongs to Oxylane group • Business • Design and manufacture athletic apparel and equipment • Retail sports products • Number of employees: • 42 000 collaborators • International market • More than 500 stores in about 16 countries • 53% of its activity • Turnover: • 2009 turnover: 5.4 billion Euros • Third sport goods distributor • Strategy: • Sell under they own brands products at a lowestprice

4. Competitive presentation

5. Customers From 7 to 77 years, From beginner to professional “Make the pleasure of sports accessible to the largest number of people. “ • Number of customers:80 million • Structure of the customers : fragmented • Wide range of people • From beginner to professional • Children, Adults, old persons • From Individual to familial • Frow low wages to high wages • Category of people passionate about sports and very involved are overrepresented • 51% of clients are women

6. Suppliers Decathlon as its own supplier The other suppliers • 1976-1986: Decathlon wants to sell product of sport brands but Decathlon was judged « not enought chic » • 1986:Creation of « Decathlon production » for the conception and fabrication of its own brand • it becomes a strategic axe • 1988: Decathlon opens an office production in China.Nowdays, 2/3 of sold articles made in Asia . l • The other suppliers: specialized in the production of sport goods • Their selected products are on the shelves by Decathlon only 1 year later • Décathlon is present both as a distributor and as a fabricant of sport products • Its suppliers don’t know how consider Decathlon as a partner or as a competitor!

7. Suppliers Decathlon as its own productor The other suppliers • 1976-1986: Decathlon wants to sell product of sport brands but Decathlon was judged « not enought chic » • 1986:Creation of « Decathlon production » for the conception and fabrication of its own brand • it becomes a strategic axe • 1988: Decathlon opens an office production in China.Nowdays, 2/3 of sold articles made in Asia . In China,Decathlon has 250 sub-contractors. l • The other suppliers: specialized in the production of sport goods • Their selected products are on the shelves by Decathlon only 1 year later • Décathlon is present both as a distributor and as a fabricant of sport products • Its suppliers don’t know how consider Decathlon as a partner or as a competitor!

8. Suppliers Decathlon as its own productor The other suppliers • 1976-1986: Decathlon wants to sell product of sport brands but Decathlon was judged « not enought chic » • 1986:Creation of « Decathlon production » for the conception and fabrication of its own brand • it becomes a strategic axe • 1988: Decathlon opens an office production in China.Nowdays, 2/3 of sold articles made in Asia . In China,Decathlon has 250 sub-contractors. l • The other suppliers: specialized in the production of sport goods or are specific brand • Décathlon is present both as a distributor and as a fabricant of sport products • Its suppliers don’t know how consider Decathlon as a partner or as a competitor!

9. Competitors Haute technicité Patagonia Columbia Eider Nike Adidas Décathlon Spécialiste Multi-Sports Asics Puma Reebok Airness Le Coq Sportif Quicksilver Rip Curl… Basse Technicité Distribution Sector Products conception Sector • N°3 in the world on this sector (N°1 Intersport) • In China, in 2003 the distribution market of sports goods was almost virgin • Today, in China, Decathlon has only one competitor. • All the others sport stores are specialized • Decathlon strategy: product same sport goods than Nike and Adidas but cheaper. Nike 50€ Artengo 15€

10. Key Success Factors +++ ++ +++

11. Decathlon in China

12. Opportunities of implementation In China since 1988: a huge advantage • Already implemented for the production of its goods • opening of three stores nearby factory production offices in Shanghai, Guangzhou and Shenzhen to test the market. • The Chinese law allows foreign companies manufacturing in the country to open stores in solo called "outlet stores". The results - in 2002, these three units have generated a turnover of 3.5 million with 250,000 customers - were enough to validate a real development project under banner. • 80% of sold products are their own brand : no customs tax (taxes douanières)

13. Opportunities of implementation Sport Market is growing up with the improvement of the standard of living • As with rising living standards, we attach importance to fitness. Different physical improvement clubs have opened and all attract a large clientele. • Spending in entertainment, sport, culture and education is increasing +121% in 6 years (1995: 312,7 2001: 5309 RMB/pers/year) • 400 millions of Chinese people(30%) nationwide participate in various sports activities • In 2008, the Beijing Olympic Games gave a new boost

14. Strategy of implementation Low price, no tv advert • Low prices To win over the mass market In an emerging economy, products have to be cheap. • No advertising. Decathlon inundates the french market advertising to promote its products but not in China. Now Decathlon, for the company's China business, has opened 25 outlets in 12 Chinese cities in 2010 - without a "penny" being spent on TV commercials French Price: 5.90€ = 51,4 RMB Chinese Price: 35 RMB

15. Strategy of implementation An individual approach • Experiential marketing :The concept of shops attract Decathlon maintain in China its concept store: • you can test ping pong, golf, basket • all outlets are spacious to try the equipments • The concept store/event results: Decathlon emphasizes family and family happiness and their tast for sport. Decathlon also sponsors sports events every month in residential neighbourhoods near its outlets, especially for youngsters. • They believe in word of mouth. They expand through person-to-person networks • Adaptation to local market: Think Global Act Local • Concentre on Chinese fitness preferences - light to moderate exercises such as ping-pong, badminton, tennis and golf rather than more robust sports. As such it doesn't sell gym equipment. • Take measurements of its shoppers in key Chinese cities in order to design sportswear that fits better. Eg: Chinese people's feet • Take into account consumer feedback . Eg: swimming goggles

16. An immediate success • In 2003, Decathlon opened its first store in Shanghai today it has 25 stores: China become the 4th country in term of outlet. • Decathlon has principally implemented its stores on the East coast, which is the most rich and developed part of the country. most strategic and developed economic areas to implement its stores

17. Emerging or possible problems Face chinese market specificities • Counterfeiting of the concept and the products • Few sports facilities and low sensitivity of Chinese for hobbies • 60% of the population live in rural areas and has no access to infrastructures • Sports federations are young • Very few sports are practiced and popular • Joint venture • Joint venture with the Zhong Lu company

18. For the future… How to leverage the brand ? • Open more and more stores in big cities to have a big presence on the chinese market: key success factor • Develop implementation of little stores in the downtown areas of the cities to target high wages and urban population • Don’t forget to reference big brands in the stores…but also strengthen its «French» image and values • Develop customers fidelity (cards…) • Exposing its products as a health protector: develop “Zen” products or Spa and Massage equipments • Look deeply into the future development of China

19. Thanks for your attention Questions ?