Decathlon India's winning playbook!

Hey there,

Decathlon is outperforming its major competitors like Adidas, Nike, Reebok, and Asics, combined! With 4000Cr in revenue, how is Decathlon, despite its late entry, winning?

First, here's some quick context: Founded back in 1976 by Michel Leclercq, Decathlon has grown into a global sports retail powerhouse, with over $15 Bn in total sales across more than 1,700 stores spanning 60 countries worldwide.

Even more remarkably, in FY23 alone, Decathlon's sales revenue in the Indian market went past Rs. 4000 Cr. Here's how:

1. Highly trained and knowledgeable employees:

Decathlon's employees are more than just salespeople; they're "sports advisors." They undergo extensive training to gain deep knowledge of the products and the sports they represent.

This expertise ensures customers get the best advice and guidance, especially helpful for beginners or those exploring new sports. This focus on knowledgeable staff also builds an immersive, experiential atmosphere in stores.

2. Understanding India's price sensitivity:

Decathlon gets the Indian market's price sensitivity. For example, Nike football shoes often retail for around $100 in the US, and similar models can sell for as much as Rs. 7000 here in India.

Such pricing doesn't work in a market where the average household income is around ~Rs. 30,000. And for that, Decathlon has introduced far more budget-friendly pricing for its sports gear, such as Rs. 999 for football shoes, hitting the sweet spot for Indian consumers.

3. Indians like to try before they buy:

Decathlon stores feature Cricket nets, soccer cages, basketball courts, and more, allowing customers to personally try out products for fit, comfort, and performance before buying.

This approach not only showcases their product's durability but also gives buyers a real feel of what they're buying and this hands-on approach builds confidence in the quality of the merchandise.

4. Frictionless shopping experience:

Given the attractive local pricing and try-before-you-buy model, it is hard to leave without buying something that tends to attract heavy crowds.

To manage the activity at checkout, they introduced a self-scan and pay system. Customers can easily scan items and pay using their mobiles, streamlining the purchasing process.

Decathlon's insights into India's purchasing habits and market, along with its exceptional staff and tech-enabled checkout, give it a competitive edge over its global rivals.

Can these other sports brands ever catch up to Decathlon? Only time will tell.

✏️ Jargon of the day

Retail vs. Wholesale

Retail is when businesses sell goods directly to end consumers for their use. Wholesale is when businesses sell large quantities of goods to other companies who then resell them to consumers.

Retailers focus on individual buyers and sell in small quantities. Wholesalers sell bulk volumes to retailers who then deal with end consumers.

Retail aims to maximize sales per customer. Wholesale aims for volume sales to business clients.

Retailers sell to consumers from locations like stores, websites, or catalogs. Wholesalers operate through business networks and may not directly interface with individuals.

While retail deals with the final product sale, wholesale works earlier in the supply chain between producers and retail sellers.

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Cheers,
Karthik