Company presentation

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 Distribution of turnover: 2010 2007 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 lowest price

Competitive presentation

From 7 to 77 years, From beginner to professional 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

Decathlon as its own supplier 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!

Decathlon as its own productor 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!

Decathlon as its own productor 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!

Products conception Sector Competitors 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. Multi-Sports Spécialiste Patagonia Columbia Eider Nike Adidas Décathlon Haute technicité Basse Technicité Asics Puma Reebok Airness Le Coq Sportif Quicksilver Rip Curl… Nike 50€ Artengo 15€

Key success factors of the sector Decathlon Products Large range of products/ adaptation to the local market Quality of products Research & Development Policy Managerial expertise Implementation (geographic implementation and high number of stores) Relationship with suppliers: strong partnerships with sub-contractors but bad relationship with big brands Marketing Know-how Communication & advertising policy Services and Customer Relations +++ ++ +++

Decathlon in China

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)

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

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

An individual approach 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

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 Stores Distribution Shanghai 6 Chengdu 1 Beijing 5 Wuxi Shenzhen 2 Hangzhou Qingdao Guangzhou Nanjing Dalian Suzhou Tianjin Changchun   Manufacture Distribution Shanghai Qingdao Nanjing Tianjin Guangzhou Ningbo Shenzhen Suzhou Xiamen Taiwan

Face chinese market specificities 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

How to leverage the brand ? 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

Thanks for your attention Questions ?