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VAUDE goes PERU One-Page-Strategy Paper Nicole Burtscher, Antonia Herwegh, Franziska Wild

General Country Analysis

Criteria Eval. Comment

Political stability √ Ensures long-term existence

EFTA Membership √ Simplification of export process

Growing GDP per Capita: $ 7,198,64 X / O Growing GDP per capita, but still low market prices

Ease of Doing Business (2019): 68 of 119 √ One of the best within South America

Currency: Peruvian Soles X Currency Risk (Exchange rate), invoicing issues, hedging

Urbanisation: 79.9% √ Increasing, concentration of target group in larger areas

Median Age: 28 years √ Long customer lifetime, online affinity, challenge to keep them attracted

Wealth distribution √ 20% of population owns 50% of national wealth → large potential group

National sports: soccer, surfing, hiking √ Many potential local customers, but also a lot of competition

Inter user: 45.5% of total population X Lack of mobile usage leads to less online interactions

Population covered by mobile network: 94.8% √ VAUDE mobile applications possible

Diverse topography and climate profile √ Strategic FIT, attractive surroundings attract tourists and local outdoor sport fans

Environmental protection laws √ Sustainable mindset fits to company’s orientation and message X = Risk O = Neutral √= Opportunity

Target Groups

Peruvian customers Adventurous Tourists with eco-orientation

• Size (est.): 5m persons, upper class, living in urban areas

• Higher income level, but like discounts

• Younger generation

• Quality-oriented, favour Western brands

• Buy online on e-commerce platforms and offline in malls

• High usage of social media

• Critical success factor: Communication needs to be provided in Spanish

• Size (est.): 3.2m tourists visiting Peru yearly for natural adventure; wealthy, international clienteles, mainly from North and South America

• Want to experience the nature diversity of Peru → mainly concentrated at Machu Picchu

• Sustainable lifestyle, adventurous lifestyle

• Critical success factor: Easy availability of products

Omnichannel Design The omnichannel model is matched with the customer journey which is based upon the country analysis and the target groups.

Note: The company “Tatoo” is a popular online and offline retailer for outdoor gear in Peru.

Marketing efforts: Cooperation with Tour Guides (Peruvian Mountain Guide Association) to sponsor the VAUDE equipment, Peruvian

testimonials as brand multiplicator, SEO and SEA, Loyalty program e.g. VAUDE-Club with special customer support, free shipment,

early bird offers for new collections etc., own Peru collection with local materials (alpaca wool) and design.

Channel conflicts: Retailer Tatoo: VAUDE’s main competitors are also part of their online and offline concept. Tatoo and VAUDE are

competing with their online and offline model (compensation for Tatoo needed).

Collaborations: Local agent impersonating retail manager and freight forwarder, online purchase → check availability in nearby offline

stores (VAUDE or Tatoo store) and shipment fulfilment

Main Competitors: Patagonia, The North Face and Salomon (see Chapter 6)


APPENDIX

Table of Content

1. VAUDE company overview ............................................................................................................................................................ 4

Strategy of VAUDE ............................................................................................................................................................................... 4

Mission & Vision of VAUDE .................................................................................................................................................................. 4

History overview .................................................................................................................................................................................... 4

Products ................................................................................................................................................................................................ 4

Sales Channels ..................................................................................................................................................................................... 5

2. PESTEL Analysis for Peru ............................................................................................................................................................. 6

Political Topics ...................................................................................................................................................................................... 6

Economic Topics ................................................................................................................................................................................... 6

Social Topics ......................................................................................................................................................................................... 7

Technological Topics ............................................................................................................................................................................ 7

Environmental Topics ............................................................................................................................................................................ 8

Legal Topics .......................................................................................................................................................................................... 9

3. Shopping Behavior in Peru .......................................................................................................................................................... 10

4. Gear Market in Peru ...................................................................................................................................................................... 11

5. Customer Analysis ....................................................................................................................................................................... 12

Segment 1: Peruvian Customers ........................................................................................................................................................ 12

Segment 2: Adventurous, nature-loving foreign Tourists .................................................................................................................... 12

6. Competitors and online market places ....................................................................................................................................... 14

Direct competitors in Peru ................................................................................................................................................................... 14

Online market places in Peru .............................................................................................................................................................. 14

7. Challenges for Channel Setup in Peru ........................................................................................................................................ 16

8. Sources ......................................................................................................................................................................................... 17


Table of Figures

Figure 1: Turnover Distribution of VAUDE according to Product Categories (2017) ................................................................................ 4

Figure 2: Turnover Distribution for VAUDE according to Sales Channels (2016) ..................................................................................... 5

Figure 3: Population Pyramid for Peru (2016) .......................................................................................................................................... 7

Figure 4: Location of largest cities in Peru ................................................................................................................................................ 8

Figure 5: Purchase Motivation for sportswear in Iquitos (Peru) .............................................................................................................. 11

Figure 7: Total Contribution of Travel & Tourism to GDP in Peru ........................................................................................................... 13

Figure 8: Top Tourist sites in Peru.......................................................................................................................................................... 13

Figure 9: International visitors by country of origin ................................................................................................................................. 13


1. VAUDE company overview

A deep understanding of the strategy and the VAUDE approach is needed to create a suitable channel model which enforces their

existing tools and aligns with their business model.

Strategy of VAUDE

The strategy of VAUDE in this project context is based on two pillars, internal and external responsibility and sustainability in every

aspect of their business. This means in detail:

1) Responsibility for people and nature: fair wages, fair working conditions, social and environmental responsibility reflected in

product portfolio (Mountain Sports, Bike Sports and Packs ‘n Bags), family-run.1

2) Sustainability: environmental bluesign® standard since 2001 which ensures high standards throughout the entire textile

manufacturing chain, EMAS certification, product improvements to be produced according to the highest standards of environmental

compatibility, usage of sustainable material, resource-conserving manufacturing process, cooperation with WWF, sustainability report.2

Mission & Vision of VAUDE

Vision: VAUDE stands for a spirit of partnership with nature and with people. We have set our sights on becoming Europe’s most

sustainable outdoor brand so that future generations will still be able to enjoy the great outdoors with our products.3

What do they sell: they sell an outdoor experience promise for sustainable products for semi-professional sportive nature-lovers

(respect for nature, harmony with nature), no limit to gender or age, focus on high functionality4

History overview

The company was founded in Obereisenbach (GER) in 1974 by Albrech von Dewitz, who’s initials form the name of VAUDE. He made

his passion for mountain sports to his profession. Several product categories were added over the years, e.g. hiking and biking clothing

and equipment or backpags and bags. Since 2001, VAUDE also put a strong focus on sustainability about social and environmental

topics. From 2012 on, the headquarter and the local production is climate neutral.5

Products

Figure 1: Turnover Distribution of VAUDE according to Product Categories (2017)

Source: based on “Umsatzverteilung von VAUDE nach Produkten 2017” 2018, accessed on 7 October 2018

1 Cf. “Good reasons for VAUDE” n. y. 2 Cf. “Good reasons for VAUDE” n. y. 3 Cf. “Good reasons for VAUDE” n. y. 4 Cf. “Good reasons for VAUDE” n. y. 5 Cf. “History. VAUDE” n. y.

0%

10%

20%

30%

40%

50%

60%

70%

Turnover Distribution according to Products (2017)

Clothing Backpacks Tents Shoes Sleeping Bags Hartware Accessories


Sales Channels

Figure 2: Turnover Distribution for VAUDE according to Sales Channels (2016) Source: based on ‘Umsatzverteilung von VAUDE nach Vertriebswegen 2016’ n. y., accessed on 7 October 2018

0%

10%

20%

30%

40%

50%

60%

70%

80%

Turnover Distribution according to Sales Channels (2016)

Specialized Shops - stationary &multichannel (incl. vaude.com)

Online Specialized Shop

Retail - own outlets

Retail Stores of VAUDE Franchise


2. PESTEL Analysis for Peru

To get a deeper understanding of the country-specific context and pre-conditions within Peru, the project group did a PESTEL analysis

and identified relevant criteria for VAUDE’s market entry. They analysed the six main focuses politics, economy, sociodemographics,

technology, environment and legal. The derived information was the basis for the creation of the customer journey and the

omnichannel model.

Political Topics

• Name: Presidential Republic of Peru6

• Currency: Peruvian Sol7

• Exchange Rate to EUR: 2017: 1 Euro = 3,785 S8

• Tax policies: The standard corporate income tax rate is 29.5%9

• National colour: red & white10

• Time Zone: - 5 hours11

• Language: Spanish12

• WISP Index: 72,15 → 47 out of 12813

• Corruption Perception Index: Score: 37; Rank: 96 out of 18014

• Trade: Peru signed a Free Trade Agreement with the European Free Trade Association (EFTA)15

Economic Topics

• GDP per capita (in current prices in US $): 7,198.64 US $ (2018), growth trend for 2022 is 8,755.06 US $16. For comparison the GDP per capita in Germany is 48,669.63 US $ (2018).17

• Main trade partner for export (2017): China (26.5%), US (15.2%), Switzerland (5.2%), South Korea (4.4%), Spain (4.1%), India (4.1)18

• Main trade partner for import (2017): China (22.3%), US (20.1%), Brazil (6%), Mexico (4.4%)19

• Inflation rate: 2.8%20

• Economy growth: 5.6% (2009-2013) by exporting raw materials21

• Unemployment rate: 6.9% (2017)22

• OECD Country Risk Classification (2018): Classification 3 (0= no risk, 7= high risk)23

• Economic sectors share of GDP: Service 59.9% (strongest branches are telecommunications and financial services), Industry 32.7%, Agriculture 7.6%24

• Ease of doing business (2019): Rank 68 out of 190, scored 68.83 out of 100, especially low rating in resolving insolvencies, enforcing contracts and protecting minority investors. 25 Compared to other South American countries is ranked the third best after Chile (rank 56, 71.81 scores) and Columbia (rank 65, 69.24 scores).26

6 Cf. “The World Factbook. South America: Peru” n. y. 7 Cf. Kusche 2018, p. 1 8 Cf. Kusche 2018, p. 1 9 Cf. Lopez-Ameri 2018, p. 1 10 Cf. Kusche 2018, p. 1 11 Cf. “Uhrzeit Lima, Lima, Peru” n. y. 12 Cf. “The World Factbook. South America: Peru” n. y. 13 Cf. Porter; Stern 2018, p. 5 14 Cf. “Corruption Perceptions Index 2017 - Peru” 2017 15 Cf. “Peru Information, Income Tax Peru, Agriculture Peru, Peru Import, Peru Export & Peru Employment Information” 2015 16 Cf. “Peru - gross domestic product (GDP) per capita from 2012 to 2022” n. y. 17 Cf. “Germany - gross domestic product (GDP) per capita in current prices 2022” n. y. 18 Cf. “The World Factbook. South America: Peru” n. y. 19 Cf. “The World Factbook. South America: Peru” n. y. 20 Cf. “The World Factbook. South America: Peru” n. y. 21 Cf. “The World Factbook. South America: Peru” n. y. 22 Cf. “The World Factbook. South America: Peru” n. y. 23 Cf. “Country Risk Classification” 2018 24 Cf. “Peru Economy - GDP, Inflation, CPI and Interest Rate” 2018; Cf. “The World Factbook. South America: Peru” n. y. 25 Cf. “Ease of Doing Business in Peru” n. y. 26 Cf. The World Bank 2018, p. 5

http://www.efta.int/free-trade/free-trade-agreements/peru.aspx


Social Topics

• Inhabitants: 32,165,485 persons (2016), constant growth over past 70 years27, population growth per year: 0.95%28

• Median age: 28 (2017)29

• Population distribution: 77.9% urban30

• Population below poverty line: 22.7%31

• Wealth distribution: 20% of Peruvian have 50% of national wealth, 60% of Peruvian possess 25%32

• GINI index: 43.8 (2016), declining from <50% over the past 10 years33 → less inequality, but still very high

• Cultural Heritage: Inka, historical strong connection to Spain (independence in 1821), strongly family- and religion-oriented34

• Sports: National sport is soccer, surfing in the coastal areas, hiking in the Andes35

Technological Topics

• Internet User: 45.5% of total population36

• Subscription to broadband: 7%37

• Subscription to phones: 125 per 100 inhabitants38

• Mobile subscription by 100 people is 11639

• Population by mobile network: 94.8%40

• R&D: 0.1 % of GDP41

• STI Country Profile: very rich in resources, economy mainly driven by commodity exports, large inter-regional disparities, transition towards industry and services42

27 Cf. “Population, total. Peru” n. y. 28 Cf. “The World Factbook. South America: Peru” n. y. 29 Cf. “The World Factbook. South America: Peru” n. y. 30 Cf. ‘Peru Tourist Arrivals. 1980-2018’ n. y. 31 Cf. “The World Factbook. South America: Peru” n. y. 32 Cf. “Poverty and Inequality” n. y. 33 Cf. “Peru - GINI Index” n. y. 34 Cf. “The World Factbook — Central Intelligence Agency” n. y.; “Culture of Peru. Discover Peru” n. y. 35 Cf. “Culture of Peru. Discover Peru” n. y.; “Peru Outdoors” n. y. 36 Cf. “The World Factbook. South America: Peru” n. y. 37 Cf. “The World Factbook. South America: Peru” n. y. 38 Cf. “The World Factbook. South America: Peru” n. y. 39 Cf. “Peru Mobile Cellular Subscriptions” 2016 40 Cf. “Peru Mobile Cellular Subscriptions” 2016 41 Cf. “How much does your country invest in R&D?” 2017 42 Cf. “Peru STI Outlook 2016 Country Profile” 2016

Figure 3: Population Pyramid for Peru (2016) Source: retrieved from: ‘The World Factbook. South America: Peru’ n. y., accessed on: 6 October 2018


Environmental Topics

• Location: South America43

• Size: Total area 1,285,216 sq km, twice the size of Texas, similar to Alaska44

• Bordering Countries: Ecuador, Colombia, Brazil, Bolivia, Chile45

• Larges cities: Most of largest cities are on the coastal side, these cities are also connected by the Panamericana, a highway network. The most isolated city is Iquitos in the mountains, its not reachable by road, only by plane or boat.

- Lima: capital city, population 9,886,647, second largest city in South America after Sao Paulo in Brazil - Arequipa: population 869,351, second largest city in Peru - Trujillo: population 799,550, largest city in the north of Peru46

• Topography: Western coastal plain, high and rugged Andes in center, eastern lowland jungle in Amazonas basin47

• Climate: varies from tropical in the East to dry desert in the West, temperate to frigid temperatures48

• Elevation extremes: from 0 to 6,746m49

• Environmental problems: Deforestation due to oil and gas exploration in the Amazon, water pollution due to mining of copper, silver and gold, waste disposal50, Lima is one of the worst cities in South America regarding air quality = WHO rating of 38 PM (concentration for inhalable particles) micrograms per square meter, this is more than three times the limit recommended by WHO51

• Laws & political efforts: First South American country with climate change law, signed in 2018. Aims are to reduce the amount of carbon emissions and develop strategies to reduce harmful effects of climate change. 67% of disasters in Peru are because of environmental issues.52

• Infrastructure: Scored 62.4 points out of 100 in a global ranking regarding the quality of infrastructure in 2018, rank 87 out of 100 countries53. Big infrastructure problems that are even exacerbated by environmental issues like floods, in 2018 a big shift took place: numerous infrastructure projects with a volume of 11 bn $ will be instigated, for example conduction for drinking water in Lima. Interesting is, that sustainability aspects play also a big role regarding these investments, this means for example that each project doesn’t have to have a negative impact on the environmental area, called green construction projects.54

43 Cf. “The World Factbook. South America: Peru” n. y. 44 Cf. “The World Factbook. South America: Peru” n. y. 45 Cf. “The World Factbook. South America: Peru” n. y. 46 Cf. Dunnell 2017 47 Cf. “The World Factbook. South America: Peru” n. y. 48 Cf. “The World Factbook. South America: Peru” n. y. 49 Cf. “The World Factbook. South America: Peru” n. y. 50 Cf. “Peru Environmental Issues & Resource Extraction” n. y. 51 Cf. “Unlikely Solution Reducing Air Pollution in Peru” 2018 52 Cf. Frances 2018 53 Cf. “Quality of infrastructure: countries with best infrastructure 2017” 2018 54 Cf. Penaranda 2018

Figure 4: Location of largest cities in Peru Source: retrieved from: Dunnel 2017, accessed on: 16 November 2018


Legal Topics

• Legal System: separation of powers, supreme court for juridical power55

• Legal Entities: most common are either open or closely held corporations (sociedad anomina or sociedad anonima cerrada), a limited liability company, or a branch of a foreign entity registered in Peru56

• Taxes: 18% value added tax57

• Trade Agreements: free-trade agreement between Peru and the EU member states since 1 March 201358

• Foreign Investment Guarantee: rights for any private investor guaranteed by the government, e.g. non-discriminatory treatment, freedom of contract, free transfer of capital, guarantee of private property, freedom of trade and beneficial exchange rate guarantee59

55 Cf. “Judicial system - Peru” n. y. 56 Cf. “Peru creates legal framework to close infrastructure gap” n. y. 57 Cf. “Peru - Import Tariffs” 2017 58 Cf. “European Commission. Trade. Policy. Countries and regions. Andean Community” 2018 59 Cf. “Peru creates legal framework to close infrastructure gap” n. y.


3. Shopping Behavior in Peru

To understanding the purchasing behavior, the project group analyzed the way and channels Peruvians do their shopping to identify

the best product placement possible.

• Loyalty to certain brands, quality is main driver60

• Seek for promotions and discounts61

• Shopping malls only in larger cities62

• Positive relationship between CSR and money spent → Peruvian consumers seem to be more sensitive to CSR features. Moreover, the results show that the willingness to pay for each specific social feature seems to be contextually defined.63

• 8.6m people do online shopping via mobile devices (smartphones and tablets) and 3.6m via desktops.64

• 90% of connected Peruvian adults already made online purchases, a growth of 55% is expected to be made by smartphones and tablets. As for desktop users, it can increase 30% until 2020.65

• 29% of millennials buy online to save time, and other 27% state that buying online saves money.66

• Number of e-commerce platforms in general increased by 70% from 2015 to 2018, according to this the online sales increased by 15-20%. Therefore in-store sales dropped by about 5%. E-Commerce market is still not big but growing due to rising internet access and the growth of strong and reliable platforms.67

• Young shopppers: almost 55% of them are under the age of 30 (77% of individuals aged 18-25), preferring buying accessories and applications (38%), technology (30%) and clothing and footwear (30%) on internet. The optimism is reinforced when the growth of internet access/penetration can reach 10% every year, which represents a growth opportunity for international and national ecommerce companies.68

• 78 shopping centers throughout Peru (2017)69, 50% of Peruvians go shopping there, mainly in large cities70

• Most popular shopping center Jockey Plaza (Lima)71

• Companies need to comply design standards set by the shopping mall operators72

60 Cf. “Peruvian Market: Consumer” n. y. 61 Cf. “Peruvian Market: Consumer” n. y. 62 Cf. “Peruvian Market: Distribution” n. y. 63 Cf. “The influence of CSR on purchasing behaviour in Peru and Spain” n. y. 64 Cf. “E-commerce business in Peru grew 198% in the last two years” n. y.; “Peru - ECommerce” 2018 65 Cf. “E-commerce business in Peru grew 198% in the last two years” n. y. 66 Cf. “E-commerce business in Peru grew 198% in the last two years” n. y. 67 Cf. “Peru - ECommerce” 2018 68 Cf. “E-commerce business in Peru grew 198% in the last two years” n. y. 69 Cf. Lopez 2018, p. 7 70 Cf. Lopez 2018, p. 8 71 Cf. Lopez 2018, p. 13 72 Cf. Lopez 2018, p. 13

https://www.export.gov/article?id=Peru-ECommerce


4. Gear Market in Peru

• Worldwide market volume: $74.7b (2017), annual growth rate 1.8%73

• Peruvian sports market volume: $121m (2017), increase of $ 30m in one year, mainly in the field of soccer74

• Peruvian sportwear market sales growth by 10% (2017)75

• Mainly pushed by Soccer World Championship in Russia and the Pan American Games in 2019 which will be held in Lima76

• Average spending for gear is $ 25 per person77

:

Figure 5: Purchase Motivation for sportswear in Iquitos (Peru) Source: based on Del Rosario Oscanova Panduro n. y., p. 28, accessed on 7 October 2018

73 Cf. Fernández Pazos; El Saleh; de Bustos 2017 74 Cf. García Jerí n. y., p. 21 75 Cf. Gonzalez Litman 2016 76 Cf. “Mercado de servicios y productos deportivos crece hasta 30% anual” 2018 77 Cf. García Jerí n. y., p. 21

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

supports the phsysical figure of the person

brand

trouser design

shirt design

sales price

textile

Purchase Motivation for Sportswear

not important less important important


5. Customer Analysis

The project group identified two major customer group with different interests and preferences. The detailed description of both

personas can be found below. To have a more detailed approach, a deeper customer analysis with a higher granularity is

recommended. To address the two customer groups perfectly, the omnichannel model was created to identify the best way to get in

interaction and to identify intersections.

Segment 1: Peruvian Customers

• Urban inhabitants, live in the large cities → they have the time to do sports (39% of population)78

• Favour fashionable Western clothes to differentiate from rural inhabitants79

• Higher income level: to be able to afford the clothes

• More likely to be the younger generation

• Growing customer base due to economic stability

• Strong relationship to nature because of Inka heritage, therefore CSR is very important and there are likely to spend more money on sustainable/environmental-friendly products80

• E-commerce81

• Sportive & nature-lover

• quality oriented

• buy online and offline in shopping malls

• high usage of social media (90%)82, most popular channels 2016: Facebook (51%), WhatsApp (35%), YouTube (30%), Twitter (12%), Instagram (10%), Snapchat (3%)83

• commercial district of Gamarra (Lima) or shopping malls (26%)84

Segment 2: Adventurous, nature-loving foreign Tourists

• Total Number of Tourists 2016: 4,575,753 persons85, expected forecast for 2027: 6,496,000 persons86 → continuous growth of

eco-tourism boom87

• Most visitors come from Chile, US and other South American countries, but also from Spain (4%), France (2.9%), Germany (2.2%) and Japan (2.4%)88

• 41.6% of all tourists visit Machu Picchu, 8.2% Colcca Valley, which is also a natural site, as well as the Paracas National Reserve and the Titicaca National Reserve

• Total contribution of Travel & Tourism to GDP was PEN 66.2bn (USD19.6bn), 10.1% of GDP in 2016, and is forecast to rise

by 4.4% in 2017, and to rise by 5.3% pa to PEN115.8bn (USD34.2bn), 11.7% of GDP in 2027.89

• Revenue from ecotourism and its activities is 40 x bigger than the investments made by the state in the protected resorts.90

• Tourists are attracted by the variety of natural sites which they can’t find somewhere else.91

• Eco-Lodges are experiencing a boom (40 -50 Lodges only in the Peruvian Rainforest), especially in the rainforest areas. These Lodges aren’t cheap and are still well booked (e.g. 8-day trip from London to Lima: $4,260 per person)92

78 Cf. “Peru - Cultural institutions” n. y.; “Solo 39% de peruanos practica deporte, la mayoría dice no hacerlo por falta de tiempo” 2016 79 Cf. “Peru - Cultural institutions” n. y. 80 Cf. “The influence of CSR on purchasing behaviour in Peru and Spain” n. y. 81 Cf. “Peruvian Market: Consumer” n. y. 82 Cf. “Las cinco principales tendencias del consumidor peruano” 2017 83 Cf. “Penetration of social networks in Peru 2016” 2016 84 Cf. “Gamarra es el principal canal de compra de ropa en Perú” 2018 85 Cf. “Peru Tourist Arrivals. 1980-2018” n. y. 86 Cf. Turner; Freiermuth n. y., p. 5 87 Cf. Cave 2018 88 Cf. “Tourism” n. y. 89 Cf. Turner; Freiermuth n. y., p. 1 90 Cf. Zuazo 2018 91 Cf. Schaaf 2017, p. 8 92 Cf. Cave 2018


Figure 6: Total Contribution of Travel & Tourism to GDP in Peru Source: retrieved from: Turner; Freiermuth n. y., p. 1, accessed on 6 October 2018

Figure 7: Top Tourist sites in Peru Source: retrieved from “Tourism” n. y., accessed on 8 October 2018

Figure 8: International visitors by country of origin

Source: retrieved from “Tourism” n. y., accessed on 8 October 2018


6. Competitors and online market places

The project group had a deeper look at the local and international competitors in the gear market to understand their strategies and

locate their shops. This is very essential to create a unique business model to diversify from competition.

Direct competitors in Peru

• Patagonia (more information later)

• The North Face: Own online shop for Peru in Spanish, also having eight stores located in Lima (3), Cajamarca, Cusco (3), Nivel, additional online selling through Tatoo.93

• Salewa: Own online shop in Spanish, but not specially for Peru, also no stores. Online selling through Mercado Libre.94

• Marmot: No online shop for Peru available, shipment only in the US.95 Online selling through Tatoo.96

• Salomon: One store in the shopping mall Larcomar located in Lima, online selling through Tatoo and own distribituion hub.97

• New Athletic: peruvian brand, over ten years, 14 stores, growth double-digit in 201698

• Triathlon: over 40 stores, one of the biggest sports ware seller99

• Asics: Two Flagship stores since 2018 in Lima and Larcomar, selling via Falabella, two Outlet stores, planned local production sites100

• Everlast: Store in Jockey Plaza (Lima) enlarged in 2017, more than eight years present in Peru, further store openings are planned101

In detail: Patagonia102

• Peruvian customers are served by the US homepage

• US prices

• Two languages theoretically available: Spanish & English

• Shipping rate to Peru: $75, 4-7 days delivery time

• Payment methods: credit card only, credit card company will calculate the exchange rate

• Different web layout, different product categories, different product range

• Return policy: in-shop or $5 shipment

• No app

• Store in Cusco sells experience of „Inca adventure“

• Some clothes are only available in the store (exclusively)

Online market places in Peru

• Tatoo Adventure Gear Store (see below)

• Mercado Libre: Online platform in Latin America and Portugal for buying and selling a wide range of items. It has two types of accounts: free and paid. Like Amazon.103

• OLX: Classified ad platform present in 114 countries, especially in emerging markets. Puts buyers in contact with sellers. Similar to “Ebay Kleinanzeigen”.104

• Falabella: Department store, present in Chile, Argentina, Peru, Colombia, Uruguay, and Brazil. Main business areas are clothing, accessories, and homeware retail, including outdoor brands like Mountain Gear, Adidas, Reebok, Under Armour.105

In detail: „Tatoo Adventure Gear Store”

Tatoo is one of the largest online and offline retailers for sports gear in the Peruvian market. They were founded in 1992 as a small

family business in Chile, nowadays they have between 51-200 employees working in Chile, Peru, Ecuador and Columbia.106 In Peru

they have three offline stores located in Arequipa, Lima and Cusco and of course the online shop.107 Their vison and mission are based

on their passion for outdoor activities and their pledge towards the surrounding communities and the environment. They want to assist

all outdoor lovers with their sharp focus on quality brands and products, so that everyone can enjoy the outdoor experiences as good

as possible. Beside the retail business with international and regional brands for camping, climbing, cycling, hiking and travel, they also

produce their own line of apparel.108

93 Cf. “The North Face: Tiendas” 2018; Cf. “Tatoo Marcas - Perú” n. y. 94 Cf. “Zapatillas Salewa - Ropa y Accesorios en Mercado Libre Perú” n. y. 95 Cf. “Shipping & Delivery” n. y. 96 Cf. “Tatoo Marcas - Perú” n. y. 97 Cf. “Larcomar: Salomon” n. y.; Cf. “Tatoo Marcas - Perú” n. y.; Cf. Gonzalez Litman 2016 98 Cf. Gonzalez Litman 2016 99 Cf. Gonzalez Litman 2016 100 Cf. Oblitas 2017 101 Cf. “Everlast planea abrir un nuevo local por año en el mercado peruano” 2017 102 Cf. “Patagonia Outdoor Clothing & Gear” n. y. 103 Cf. “Peru - ECommerce” 2018 104 Cf. “Peru - ECommerce” 2018 105 Cf. “Peru - ECommerce” 2018 106 Cf. LinkedIn n. y. 107 Cf. Tatoo Adventure Gear Store n. y. 108 Cf. LinkedIn n. y.


Therefore, the project group identified Tatoo as an interesting and competent partner for going into the Peruvian market. To get to

know the market place better, the homepage was analysed, the following facts, challenges and opportunities were identified.

• Latin-American platform, available in Chile, Peru, Columbia, Ecuador → possibility to get access to other south American

countries in the future (Waterfall-Approach)

• Special platform for outdoor clothing and equipment → only high-quality brands and products are offered, this fits to the approach of VAUDE as being seen as a special and high-quality brand

• Homepage design and structure → important for the quality of the purchase experience for the customers, using a foreign channel than a VAUDE owned means giving up a little bit of control and therefore it impacts how the brand is perceived

o Navigation is clearly structured: choose between gender or activities o Well-arranged landing page: Slider of Labels / Cycle Equipment / Nutrition advise / clothing o Selling many competitor’s brands o Product ratings (stars) are possible o They charge for delivery, depending on the destination o Buying as a guest is possible but registered clients get benefits o No double opt-in when registering, you get directly to payment details o Online-payment and credit card are available o Shopping app available → registration with email is mandatory


7. Challenges for Channel Setup in Peru

• No experience in the Peruvian market, so higher risk

• Dependency on retailer Tatoo (critical business success factor), only little control

• Local agent as freight forwarder and controlling instance – high dependency, lack of control

• Transferring message/mission of VAUDE in appropriate way

• Highly competitive environment, so diversification strategy needed

• Personnel with expertise needed to tackle the challenges


8. Sources

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