Decathlon Hong Kong scores a goal with Adyen

The payment process is a win-or-lose situation for retailers. This is especially true for multinationals like Decathlon, one of the largest sporting goods retailers in the world.

In Hong Kong, Decathlon had previously struggled with a complicated payment system that caused unnecessary stress not only for customers but also for the company’s employees.

Kent Lam, Chief Technology Officer at Decathlon Hong Kong, sat down with Frontier Enterprise on the sidelines of NRF APAC 2024 to discuss payments transformation and how its partnership with Dutch payments company Adyen has removed many of the barriers to doing business.

Air ball

According to Lam, Decathlon Hong Kong previously had two separate payment service providers – one providing point-of-sale (POS) terminals and the other a payment service provider (PSP) that offered low transaction fees for credit card purchases.

“We integrated the services of these two providers and then integrated them with our web POS system, Openbravo. The problem was that whenever there were issues with payments, it was difficult to debug them because there were so many points of failure,” he recalled.

The most common problem with this arrangement was duplicate charges, which was a nuisance for many customers, Lam said. In addition, Decathlon Hong Kong’s customer service team was overwhelmed by all the refund claims and angry phone calls.

Worse still, POS systems that had been in use since 2017 were reaching the end of their lifecycles.

“We can’t upgrade because PSP has to reintegrate the new models and re-certify them. They didn’t want to re-certify the new models because they now have their own POS systems and are pressuring us to use them. Even then, we would have to integrate their models with Openbravo,” Lam said.

Decathlon sought advice and was informed that the integration would cost around HK$500,000. However, since this type of integration had never been done before, there was no guarantee that it would be successful.

To make matters worse, Decathlon’s PSP at the time wanted to once again raise transaction fees. It was time for Lam to throw in the towel with his payment service provider at the time.

First choice

After considering just three candidates, Decathlon Hong Kong chose Adyen of the Netherlands. It was an easy choice, Lam noted, because its French counterpart already used Adyen.

“Our main concern was whether the new vendor would be able to support our web POS, Openbravo. None of the other PSPs had any experience integrating with Openbravo, except Adyen,” Lam noted.

In addition, Decathlon needed a reliable partner with a global contract; someone who could help them keep their word, even in difficult times.

“Decathlon, as a global company, does not want to have multiple local agreements or contracts. They prefer to use a supplier with a global agreement, especially for payments, which are quite important. Fortunately, we have a global agreement with Adyen,” the executive noted.

After three to four months of development, with Openbravo at the forefront and support from Adyen, Decathlon Hong Kong was able to launch the new platform around July 2023 and see immediate success.

“A year has passed and our partnership with Adyen has solved a lot of issues. We don’t have these duplicate fees anymore. We don’t have internal fraud because Adyen has much better risk management processes. They have a very advanced risk management platform, with many rules already set up to help us detect fraud. And we have lower transaction fees,” Lam said.

Under the partnership, Adyen is handling the end-to-end payment solutions for Decathlon Hong Kong’s online store, in-app purchases and all eight physical stores in the city. Using Adyen’s Unified Commerce solution, Decathlon Hong Kong now has a clear view of all payment and transaction channels.

Additionally, Adyen has enabled Apple Pay support at Decathlon Hong Kong for online transactions and in-app purchases, and plans to introduce Google Pay functionality later this year.

“We’ve already seen an increase in the number of people using Apple Pay compared to other forms of online payments. It’s an increase of about 20%,” Lam said.

Reconstruction of the warehouse

Beyond payments, Decathlon Hong Kong is currently modernising its e-commerce platform, with the migration planned for August.

“We currently use Oracle’s e-commerce system and have built a lot of custom features connected to it. However, we are migrating to a completely new APAC e-commerce platform that Decathlon Singapore is building. This new platform will be rolled out to multiple countries,” Lam revealed.

He believes that an e-commerce platform focused on the Asia-Pacific region is crucial for the company’s efficient operation, as it enables local teams to quickly solve problems.

“The problem we currently have is the time zone difference. The support is terrible because the current e-commerce platform we have is based on Oracle and is built in Europe. So when we need their support, we have a six-hour delay. We have to wait until 2:00 or 3:00 p.m. for them to wake up in France to support them,” he noted.

Indeed, when it comes to digital transformation, Decathlon is playing for the long term. As for other technologies, Lam said they are also looking at RFID suppliers and exploring the potential of augmented reality.

Decathlon is unhappy with its current RFID vendor, citing slow response times in support and RFID item detection, which affects the detection of stolen or unpaid goods. This prompted Lam to consider other options.

“With AR, there was a proposition aimed at augmenting the workforce. You could have an AI camera that scans to see if you need to restock a particular shelf, rather than having to manually check it every time. Then you could automate and create all the tasks that need to be done on a desktop, and then people could do that,” Lam concluded.