by Apparel Resources News-Desk
10-April-2019 | 2 mins read
French sportswear and sporting goods retailer Decathlon has demoted older rival brands in the segment in the likes of Adidas, Nike and Puma by registering higher revenue in FY 2018.
With revenue of Rs.1,278 crore for the year to March 2018, Decathlon has also become India’s second-largest single-brand retailer after Xiaomi. The brand also made a profit of Rs.33.8 lakh, the first in India for the retailer that 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, reflecting a 38% jump in FY18 sales, regulatory documents sourced from research platform Veratech showed.
Earlier in the month of February this year, Puma was declared as the sportswear market leader in India. Within two months of that announcement, now Decathlon has overtaken Puma in sales revenues.
“Decathlon 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.” – Alexander Göransson, Consultant, Euromonitor International
Decathlon prides in selling through its 70 large, warehouse-like stores at prices about 30-40% lower than the competing products. The brand sells everything from running shoes to mountaineering equipment under its own brands. This also helps the retailer earn higher operating margins.
Decathlon uses a combination of in-house manufacturing and outsourcing to stock its shelves and by selling only private labels, it controls almost every bit of operations, from pricing and design to distribution and keeps its costs and selling prices low.
This operating model has worked both globally and in India. Here, the company sells more than 500 products catering to 70 sporting disciplines.
Decathlon opened its first cash-and-carry format and wholesale store in 2009. However, it got approval for single-brand retailing in 2013 and changed its business model from wholesale to retail.
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