28 November 2023, Mumbai
Decathlon India, initially a modest cash-and-carry format sporting goods retailer, has undergone a remarkable transformation, evolving from its single wholesale store in Bangalore in 2009 to a resounding success story. Currently boasting of over 100 stores spread across 19 states and 110 factories throughout India, the French sporting goods retailer has positioned itself as a standout brand recognized for its affordable, high-quality sports gear. Surpassing global giants like Adidas, Nike, and Asics combined in the Indian market, Decathlon stands out as one of the world's largest sporting goods retailers, offering products catering to 85 different sports disciplines.
In post-pandemic market, characterized by an intensified focus on health and wellness, Decathlon India experienced a remarkable surge in sales, witnessing a notable 37 per cent increase to approximately Rs 4,000 crores in the fiscal year 2023. This growth is particularly impressive given the Rs 18.5 crore loss it incurred during this financial year.
The setback can be attributed to a dip in the company's operating margin in 2022, stemming from an increase in non-COGS (cost of goods sold) and non-wage operating costs. These encompass expenses related to marketing, sales, transport, and store operations segments. Despite these challenges, Decathlon India's resilience and strategic positioning have positioned it as a prominent player in the burgeoning market for sports and wellness products in the country.
Large-format stores scale up profits
In 2019, Decathlon India significantly increased its presence by strategically opening numerous stores across major cities, introducing a staggering 720 new products in the process. While sourcing nearly 8 per cent of its global requirements from India across diverse sporting segments, the company expanded its operations by collaborating with 10 new suppliers and initiating the local manufacturing of their popular flip-flops. This move aligned with its commitment to offering a diverse range of sporting gear and adhered to its company tagline, 'Sport for all, all for sport’.
The surge in post-pandemic emphasis on health and wellness provided the impetus needed for Decathlon India to make its sports gear more accessible to the budget constraints of the Indian middle class. Actively engaging with the Indian government, Decathlon is currently in discussions to broaden its retail offerings by including products from rival local and global brands alongside its own. This strategic move positions Decathlon to operate as a multi-brand retailer across India.
A significant milestone in this expansion is the inauguration of its first large-format store in Chennai, a sprawling 13,000 sq. ft. space situated in the upscale Marina Mall, Egattur. Boasting over 3,700 styles of sports clothing, footwear, and gear for men and women, this store covers a wide array of sports categories, including outdoor, water, among others. It also features a hands-on digital experience area spanning 350 sq. ft, enhancing the overall shopping experience.
Similar success was replicated with the launch of another large-format store in Nexus Mall, Bengaluru, further solidifying Decathlon's position as a leading player in the Indian sporting goods market.
Boost to Made-in-India products
India holds a significant position as the fourth-largest sourcing country for Decathlon Global, presenting an opportunity for strategic advancements in future manufacturing operations on a global scale.
The company highlights its commitment to local production, noting it currently manufactures 80 per cent of textiles, 80 per cent socks, 100 per cent cricket and hockey bats, 100 per cent nutrition range, and 95 per cent bikes in India. The company aims to boost the share of locally produced components sold in India to 85 per cent by 2026.
Quotes
As Deepak Dsouza, Production Director, Decathlon Sports India states, over 100 million products sold in India within a 12-month period were produced domestically, creating opportunities for 70,000 suppliers across various states.
Founded in France in 1976 by Michel Leclerq, Decathlon has rapidly expanded its global footprint. Decathlon India sees great potential in local manufacturing, emphasizing its proximity to markets, coupled with lower prices, innovation, and sustainability. The company is optimistic that this approach will not only enhance profits within India but also contribute to global success.
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