Internationalization Road of Sonae SR

Transcription

1 Xiamen University Internationalization Road of Sonae SR AMOY CONSULTANT: Neil Zhang, Iris Zhao, Mia Yuan, Noah Zhou

2 Key Issue Situation Limited domestic market Sales and margin Too many brands Urgency of going aboard Key Issue & Problems Internationalization of Sonae SR to be internationalized Where to go? When to go? How to go? Increase sales & profitability

3 Suggestion Where China & India How JV One Brand When First half of Build Joint Venture to achieve the internationalization of Sonae SR- Worten 2. One Brand(Sonae SR-Fashion & Sports) integrate Mo, Sport Zone and Zippy under one brand

4 Agenda 1 Analysis 2 Alternatives, Criteria & Evaluation 3 Implementation 4 Financial Forecast 5 Risks & Mitigation 6 Conclusion

5 Analysis BY MIA

6 Breakdown per business of Sonae Turnover breakdown 3% 5% Main and most profitable 24% 2 nd most profitable 68% Sonae MC Sonae RP Sonae SR Sonae IM

7 Sonae SR Revenues 1H15 in % of total SR 14% 18% 68% Worten Sport Zone MO&Zippy

8 Sonae SR Total store sqm('000) Stores Worten Sport Zone MO Zippy 117 Worten Sport Zone MO Zippy

9 Sonae SR Internationa lization How to Profitability What to sale Problems Worten Spain Wholesale Investment intensive profit driver Zippy Spain Saudi Arabia Wholesale and franchising Break even Electronics and home appliances Merchandise for child Not profit overseas Brand is not its own Price Sport Zone Spain India Wholesale and franchising 2 nd profit driver Football, sport clothing No difference in different regions Mo Spain Saudi Arabia Wholesale and franchising Break even fashion Differentiation

10 1. Core competence in retail 2. Market leader 3. Efficient operation 4. Streamlined logistic and purchasing 1. Sonae SR not profitable overseas 2. Expansion aboard still in early stage 3. Franchising overseas not successful 1. Sonae SR is big driver 2. To establish more partnership 3. Improve brands building 4. IT system 1. Economic downturn 2. Saturated domestic needs

11 Alternatives BY MIA

12 Alternative I Alternative Pros Cons Start up green-field of Worten in India

13 Alternative II Alternative Pros Cons Keep efforts expand in already penetrated markets

14 Alternative III Alternative Pros Cons Start Joint-venture with JD.com(Chinese B2C online company for Worten and combine Mo, Sport Zone and Zippy)

15 Alternative-Criteria What do you concern most: Profitability Revenue increase Sustainable growth

16 Alternative-Evaluation Profitability Revenue increase Sustainable growth Green field in India Expand in already market One brand & joint venter

17 Implementation BY IRIS

18 Implementation Consumer Electronics Sports Goods (Sport Zone) Consumer Electronics [Go to global market] Fashion Sport <Synergy> Fashion (Mo & Zippy)

19 Implementation Worten go to global market How & Where Supply Logistic Whole sale Customer Local Supply Sign contract with local partner Narrow deliver lead time Local Logistic Selling online B2C business model JD.com Customer

20 Implementation Integrate Mo, Sport Zone & Zippy How One Brand Combine one brand under Sonae SR Cross influence customer demand Operation: One Brand Sonae SR Design Small manufactory Quality Test Selling performance review Selling in Global stores Logistic

21 Implementation Integrate Mo, Sport Zone & Zippy How One Team One Goal HR Cooperate with local partners & hiring local employees Expat headquarter talents to cross country allocation working Emphasis one team culture. Enhanced brand image internally

22 Implementation Integrate Mo, Sport Zone & Zippy Where & When Where Wholesale cooperation only Leverage existing sport Zone offline store location Expand Zippy & Mo cross over 42 countries When 1 st stage combine brand at first 6 months Sign off partner both on supplier logistic and wholesale 2 nd stage tracking performance

23 Implementation Marketing Online Offline Target customer demand Offering service experience model e.g. VR; 24 hours deliver Fast fashion refreshing O2O business model

24 Milestone JV partner Sign off Partner cooperation review Operation Location address Supply & Logistic circle lock down Supply & Logistic circle review Cross country Employee program Brand&Marketing Branding Combining online promotion offline experience model Performance Tracking Revenue growth marketing share average rev contribution by store 1H 1 Years 2 Years 3 Years

25 KPI JV KPI Finance Marketing Partner&Customer Synergy Finance Marketing Process Customer Revenue Growth Net Profit Marketing share Online revenue growth Survey Continously cooperation% Revenue Growth Net Profit Offline Store performance Total revenue growth Brand influence process circle CI Channel performance end user experence

26 Financial Forecast BY NEIL

27 Financial Forecast SONAE SR International H14 1H15 1H16 1H17 1H18 1H19 International TURNOVER EBITDA International

28 Financial Forecast Sonae SR TURNOVER BREAKDOWN UNDER ONE BRAND (M ) H14 1H15 1H16 1H17 1H18 1H19 Sonae-Worten Sonae-Fashinon& Sports

29 Risks & Mitigation BY NEIL

30 Risks & Mitigation Risks: I. Culture conflict II. Local Competitor III. Intellectual property protection How to mitigate: I. Working closely with local people; assign high talent employee cross country working II. Brand and product refreshing III. Sign contract with partner and main cooperators; Strong channel control by Sonae SR

31 Conclusion NEIL

32 Conclusion Situation Limited domestic market Sales and margin Too many brands that dilute brand influence Urgency of going aboard Key Issue & Problems Internationalization of Sonae SR to be internationalized Where to go? When to go? How to go? Increase sales & profitability

33 Conclusion Where China;India When First half of 2017 How JV One Brand

34 Xiamen University Thank you! Amoy consultant: Neil Zhang, Iris Zhao, Mia Yuan, Noah Zhou