Empowered by unique operation model, the French sports goods retailers announced themselves as the largest sportswear leader of India in FY 2018. According to the data published in an English news website Economic Times, Decathlon made a profit of 33.8 lakhs and revenue of 1,728 after Puma announced itself as the market leader two months ago. The company witnessed a catapulting in profit after it faced a loss of 53.1 crore. Dotted with humongous 70 stores around the country, Decathlon sold only private-labelled products at a price 30%-40% lower than its global and domestic competitors.
Industry experts are attributing its diverse approach as the cause of its success. As the cultural wave in sports transcending the boundary of Cricket, a strong enthusiasm for Kabbadi, soccer, Volleyball and hockey is growing. Tapping this unconventional sportswear market gave Decathlon a wider presence. Cricketers for a long time exercised an unyielding domination in brand endorsements. Decathlon gave exposure budding sportspersons like Badminton players Saina Nehwal and PV Sindhu and athletes Hima Das and Swapna Barman.
Explaining the operational model of Decathlon, Alexander Goransson, consultant at Euromonitor International explains, “Decathlon has a lower-end positioning and targets consumers who see value for-money as important than brand-image. In doing so, it appeals to the wide range of age groups, and more to participants in sporting and outdoor activities, as opposed to consumers buying sportswear as fashion statement.”
Another reason behind the lower price of Decathlon is controlling every aspect of its operation such as pricing, designing and distribution. The company follows a tactics of in-house manufacturing and outsourcing stocks to its shelves.
Its German competitor Puma reacted at this market development saying, “We have a strong partnership with Decathlon in Europe, where we sell our products through their stores. Being a brand that supplies to multiple channels of sales in India, a significant part of our revenue is largely wholesale. So, our revenue is channel sales, rather than end customer sale, which is the case with a retailer.”, said Abhishek Ganguly, Managing director at Puma India.