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Quest for Growth in an Aspirational Field

Eric Fortune - Decathlon Mexico
CEO

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Wed, 05/08/2019 - 10:05

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The limited offering of equipment brands and their high price tags has made sports an aspirational activity for a big segment of the Mexican population. However, there is an opportunity to welcome more people into a healthier lifestyle, according to Eric Fortune, CEO of Decathlon in Mexico. “Just as H&M and Zara have worked toward democratizing fashion, we are democratizing sports and gradually expanding our client base and the population segments we target,” says Fortune. “We started targeting A, B and C+ segments but now we can even target C- clients.”
French designer, manufacturer and distributor of sports equipment Decathlon made its way to the Americas after conquering the European and Asian markets. The company arrived in Brazil over 15 years ago and eventually recognized the existing opportunity in other Latin American countries. In 2016, the company entered Mexico following a global strategy established by corporate CEO Michel Aballea to strengthen Decathlon’s international presence, consolidating the markets where the company already had operations and entering countries with potential for growth.
Decathlon rates a country’s attractiveness on the popularity of sports in the country, how developed its sports infrastructure is and how easy it is to do business. Mexico was among the company’s preferred destinations based on these standards and in 2014, the company began developing a strategy to tackle the market and add value to its sports scene. “We want to become an active participant in the population’s well-being and a promotor of good health, boosting sports practices and lobbying the government for the development of sports infrastructure and nutritional programs,” says Fortune.
The company opened its pilot store in Queretaro with fewer products than what it offers in Europe. “We opened with a reduced offer but it was a wise decision that helped us to adapt better to the market and to the needs of our users,” says Fortune. Based on the positive response from the Mexican public, Decathlon built a development strategy for the country’s main cities. The company wants to have 20 stores in Mexico by the end of 2020 to capitalize on the US$5 billion opportunity that Fortune expects the sports market will generate over the next 10 years. Decathlon also decided to introduce its entire portfolio, including equipment for over 100 sports, an advantage over other international retailers, Fortune adds. “Mexicans practice all kinds of sports but sometimes the necessary equipment is not available in the country; as a result, users must look for other options in the US or Europe.” 
Fortune also believes that Decathlon’s empowering business model gives it an upper hand in sports retail. Clients can test any product before buying it, which means they do not solely rely on the opinion of salespeople. However, the company made sure to include athletes in its sales force to create empathy and a relationship of trust with buyers. This also gives Decathlon a direct insight into what athletes think about its products. “Our collaborators have complete freedom to stop selling something if they are not pleased with its results and they can share that feedback with our product managers,” says Fortune. “Our main KPI is our users’ satisfaction, which is reflected in our service and warranty policies. We offer twoyear warranties for all our products and lifetime warranties for bicycle frames.”
To deliver on its promise of democratizing sports, Decathlon also made sure its distribution model allowed for prices to remain affordable. The company chose to build standalone stores rather than placing them in shopping malls to avoid passing on leasing costs to customers. “Real-estate prices in such facilities do not allow us to maintain an affordable approach and the available space generally does not allow us to comfortably display our offering in 100 sports,” says Fortune. 
Having said that, the company does see these spaces as an opportunity to grow its operations, particularly in Mexico City, and even to contribute to their development. “Our stores themselves attract customers and do not need to ride on the popularity of other retailers or services,” says Fortune. “In the countries where we do have operations in shopping malls, our presence has helped to draw traffic to the mall and not vice versa, which is part of the added value we can offer as a company.”

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