Company profile MediaMarkt: ’s Number One consumer electronics retailer

More than 800 stores with sales floors measuring up to 10,000 square meters in 14 countries, an average assortment of 45,000 articles and an integrated online offering – these are the key data of a business enterprise whose extraordinarily dynamic growth has kept the industry holding its breath for more than 35 years. Innovative, customer oriented and highly competitive, MediaMarkt is continually enhancing its position as the number one consumer electronics retailer in Europe.

The swirl in MediaMarkt’s logo is characteristic of the whole company. Permanently low prices and the attention-grabbing advertising are constantly causing a stir within the industry. MediaMarkt’s portfolio of products is enormous: from smartphones to tablets, from washing machines to fully- automated coffee makers, from sound systems to XXL TVs – at MediaMarkt stores, customers will always find the very latest brand-name products that the consumer electronics, communications and electrical appliances industries have to offer.

In almost all countries where MediaMarkt is represented, this offering is supplemented by online shops that are closely linked with the conventional stores. This allows customers to decide whether they want to have a product delivered to their home or whether they want to pick it up at their local store – regardless of whether they made their purchase at a brick-and-mortar store, online or via mobile devices. By establishing a close link between e- commerce and conventional retailing, MediaMarkt is transforming itself into a true multichannel retailer and can thus profit from the increasing growth in online commerce.

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Innovative business concept The company’s success story started in 1979 in a commercial zone in . The basic concept created by the company’s founders Helga and Erich Kellerhals, Leopold Stiefel and Walter Gunz, which is as valid today as it was then, involved a large-scale electrical goods store located outside of the city center and offering sufficient parking space for people wanting to take their purchases home with them. A novelty was the wide range of the latest brand-name products ready for demonstration, because at that time you could only find smaller single-line stores and department store departments offering a limited range of products. MediaMarkt not only offered customer advice but also an extended portfolio of after-sales services – from repair services to the delivery and installation of devices. Revolutionary was the guarantee of permanently low prices combined with a money-back guarantee if a customer found a better offer at a competitor. The novel business concept was an immediate success with the customers and the word soon spread.

Unparalleled success Driven by the unexpected success of the first MediaMarkt store, additional stores were opened first in and later throughout . This innovative store concept caught the attention of Kaufhof Warenhaus AG. In 1988, it acquired a 54 percent stake in the holding of the MediaMarkt stores, which in turn took over the chain two years later. Since that time, MediaMarkt and Saturn have been managed as independent brands under the roof of MediaMarktSaturn Group, which is headquartered in . As part of Kaufhof Holding AG, MediaMarktSaturn Retail Group later also became part of the METRO Group. This cleared the way for increased expansion which, in 1989, also took the company to other

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European countries. Today, MediaMarkt stores are attractive shopping venues for millions of customers in Germany, Austria, Italy, Switzerland, Hungary, Poland, Spain, the Netherlands, Belgium, Portugal, Greece, Sweden, Russia and . The number of stores currently totals more than 800, of which 268 stores are located in Germany.

Integrated sales During the course of its expansion, MediaMarkt is also tapping into new sales channels, especially online-based retailing. Following this so-called multichannel-strategy, MediaMarkt would like to offer to its customers that they can buy products wherever they want – via the Internet or at their local MediaMarkt store. If desired, purchases made online can be picked up at a local store the very same day, subject to availability. Customers who have purchased a product online can also take advantage of services offered at the brick-and-mortar stores. MediaMarkt’s multichannel approach thus bundles the advantages of fixed-location retailing with those offered by online commerce under the roof of a trusted brand. The integration of these sales channels is supported by a new price strategy: Instead of spectacular short- term special offers, MediaMarkt offers its customers long-term clear, fair and reliable prices both online and offline.

Decentralized organization One basic principle behind the success enjoyed by MediaMarkt is not visible to the customers although they strongly benefit from it. Even though all the stores maintain a uniform brand identity, they do not form part of a centrally controlled network of stores. Each MediaMarkt store is an independent company whose local manager holds up to ten percent of the shares. Moreover, he has a great deal of freedom to decide and act as he sees fit, for example, with regard to the product portfolio. The underlying philosophy is “All business is local“: The success of each MediaMarkt store is due to the

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greatest possible degree of customer proximity. A local manager who is responsible for his own store can adapt the range of products he offers and his prices to the needs of his specific customers faster and better than the manager of an outlet who has to wait for instructions from the headquarters. Furthermore, as a businessman and part-owner, he identifies to a much greater extent with his store and has a vested interest in its success.

Motivated employees Another key factor in MediaMarkt’s success and an important part of the company’s corporate culture is also the great appreciation it shows to its employees. The company in particular encourages individual responsibility and an entrepreneurial mindset. In addition, the company offers attractive career prospects and further training opportunities. This is why MediaMarkt is highly popular as an employer and training company. The high degree of satisfaction that employees feel and the great extent to which they identify with the company is reflected in a very special kind of team spirit. This also has a positive impact on the way in which they deal with customers. The MediaMarkt stores are exemplary in terms of friendliness and quality of their customer advice and service.

Customer magnet MediaMarkt has been enjoying growing popularity for 35 years now. This is particularly apparent when a new store is opened or there is a special sales promotion – events that draw huge crowds of customers. The reason for this is not just the attractive prices but rather the entire marketing mix, which ranges from attention-grabbing advertising to the appeal and diversity of the product portfolio. The advertisements, which in recent years have frequently involved popular comedians, enjoy cult status and have been key to helping the MediaMarkt brand achieve a level of name recognition in Germany of 96 percent. The enormous range of extremely attractive products is also very

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appealing. State-of-the-art consumer electronics offer new and fascinating possibilities and play an increasingly important role in leisure time activities. No less attractive are the modern household appliances such as fully- automated coffee makers and refrigerators for storing wine that cater to increasingly sophisticated customer demands. The extremely diverse selection of products at MediaMarkt almost make the stores feel like electronics trade fairs, where customers can find all of the very latest products, put them to the test, and compare them. Ever since the company was founded, MediaMarkt stores have always made a point of offering permanently low prices. This has had a real and lasting impact on the customers and provides a firm foundation for their trust.

As of: March 2017

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