- Meenakshi Kumar |
French sporting goods retailer Decathlon which had entered India in 2009, has also become India’s second-largest single-brand retailer after Xiaomi. Decathlon’s revenue was Rs 1,278 crore for 2018. The company made a profit of Rs 33.8 lakhs, the first in India for the retailer since it began operations in the country about a decade ago. In FY16-17, the brand had a net loss of Rs 53.1 crore on revenue of Rs 925 crore, a 38 per cent jump in FY18 sales, regulatory documents sourced from research platform Veratech showed. In fact, Decathlon has garnered more revenue than older rivals Adidas, Nike or Puma in FY18. It has lower-end price positioning and targets consumers who see value for money as more important than brand image. In doing so, it appeals to a wide range of age groups, and more to participants in sporting and outdoor activities, as opposed to consumers buying sportswear as fashion statement.
Decathlon operates mainly from city suburbs or struggling malls that can’t command high rentals. In India, the company sells more than 500 products catering to 70 sporting disciplines. By contrast, most other retailers sell merchandise restricted to popular sports such as cricket and soccer. With 70 large, warehouse-like stores, Decathlon’s product pricing is about 30 to 40 per cent lower than competing products since it sells everything from running shoes to mountaineering equipment under its own brands. This also helps the retailer earn higher operating margins. By selling only private labels, Decathlon controls almost every bit of operations, from pricing and design to distribution, and keeps its costs and selling prices low. Decathlon uses a combination of in-house manufacturing and outsourcing to stock its shelves. The operating model has worked both globally and in India