Posted - 24 May 2024
Decathlon India posted a revenue of 4000 crores in FY23 which was 33% higher than what it had last year in FY22📈
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Decathlon operates over 1,700 stores in more than 60 countries, with annual revenues surpassing $15 billion.
Revenue of Sports Companies in India (FY 2021 - FY 2023)
Decathlon has achieved, becoming the undisputed king of the Indian athleisure scene.
Decathlon India is bigger than Adidas, Nike and Asics all put together.
Backstory
In the early 2000s, India's sports market was like an unexplored land.
Big international brands like Nike and Adidas ventured careful in India, focusing only on wealthy and elite customers. They missed out on a large group of people who wanted to play sports but couldn’t afford expensive gear.
However, by this strategy, they neglected a vast, dynamic segment of society eager to participate in sports but hindered by the lack of affordable, quality equipment.
And, then entered Decathlon, a brand that chose to play a different game altogether.
Unlike its competitors, Decathlon recognized the untapped potential in India's unorganized sports market, a massive arena where aspirations were high but budgets were low.
About Decathlon
Decathlon, is a French based sporting company, founded in 1976 by Michel Leclercq, has emerged as a global leader in sports retail, disrupting the market with its unique business model and customer-centric approach.
Decathlon's Entry in India
Decathlon saw potential not only in champions, but in India's streets, parks, and backyards. Decathlon's approach was simple yet revolutionary : to make sports accessible to everyone.
From street cricket players to aspiring athletes on a budget, Decathlon decided to have something for everyone.
Decathlon, a French-based sporting company, thus entered the Indian Sporting market in 2009 - with the ideology of “SPORT FOR ALL- ALL FOR SPORT”
And with this strategy, Their stores became treasure troves for sports enthusiasts, offering equipment for over 70 sports, ensuring that no one left empty-handed.
And now?
Decathlon have more than 100+ stores in 20+ states accross the country, that too in just 13 years.
Mindblowing? Isnt't it? 🤯
Now, you might be thinking, what's the big deal in it? They ventured into India, as market was unorgainzed, decathlon marketed their products, and it will obviously work for them!
But, Here's a Surprise!!!
Decathlon have managed to reach where they are with minimal advertising or marketing, at least compared to Adidas, Nike, and Puma.
Their strategy is old-school, relying on word-of-mouth publicity over conventional forms of advertising.
So What Strategies did decathlon actually used to succeed and win over large players? 🤔
Let's Delve into it!
Decathlon's Market Winning Strategies
Affordable Pricing and Value for Money
Decathlon has a unique business model focusing on affordability without compromising quality. By cutting out intermediaries and designing, producing, and retailing their products, they can offer high-quality sports gear at significantly lower prices than competitors.
For example,
Decathlon's Kalenji Kiprun Fast running shoes, priced at around $70, offer similar performance and quality features to Nike's Air Zoom Pegasus, which costs $120-$130.
Decathlon manufactures, Quechua 2 Seconds pop-up tent in-house and sells it directly to consumers, This allows decathlon to offer the tent at half the price of similar models from competitors like Coleman.
In-House Brands - Over 20 exclusive in-house brands (e.g., Quechua for hiking, Kipsta for team sports, Tribord for water sports) enable Decathlon to maintain quality while keeping prices low.
Supply Chain Efficiency
Decathlon has optimized its supply chain to be highly efficient. By managing the entire process from production to retail, they minimize costs and ensure timely product availability. Their logistics network is designed to support both physical stores and online sales effectively.
Vertical Integration - Decathlon controls the entire supply chain, from product design and manufacturing to retail. This vertical integration eliminates middlemen, reduces costs, and allows the company to offer products at significantly lower prices than its competitors.
Decathlon's vertical integration allows it to control the entire supply chain, from design to retail. This results in cost savings of up to 20-30% compared to traditional brands.
Wide Product Range, Own Brands and Market Penetration
Decathlon offers a vast range of products catering to over 80 sports. Unlike Nike and Adidas, which are heavily focused on popular sports like soccer and running, Decathlon covers niche sports, ensuring a broader customer base. Most of their products are under their own brands, such as Quechua for hiking and Tribord for water sports, allowing better control over quality and pricing.
Diverse Offerings - Decathlon caters to a wide array of sports, from mainstream activities like soccer and running to niche sports like horse riding and archery. This extensive range attracts a broad customer base.
Focus on Inclusivity - The company designs products for all skill levels, ensuring that both beginners and advanced athletes can find suitable gear.
Customer Experience and Store Layout
Decathlon's customer satisfaction scores consistently exceed industry averages, with 90% of customers reporting a positive shopping experience.
Interactive Stores - Decathlon stores are designed to be experiential. Large floor spaces and dedicated areas for product trials (e.g., mini football fields, cycling tracks) allow customers to test products before purchasing.
As per Research by Ohio suggests that if you simply touch a product, you're more likely to buy it. Decathlon takes advantage of this "Endowment effect."
According to a report, 37% of the people who visited the Decthalon store, ended up IMPULSE buying.
Strategic Product Placement - Placing the cheapest products at the entrance and frequently bought items deeper inside encouraged impulse buying.
Staff Expertise - Store employees are often sports enthusiasts themselves, providing knowledgeable and passionate assistance to customers.
87% of the customers spend more than 30 MINUTES in the store and you would be never interfered with by any staff member.
Community Engagement - Decathlon often engages with local communities through sports events and sponsorships, reinforcing its brand presence and fostering customer relationships.
These hands-on approaches builds customer trust and satisfaction.
Data-Driven Decision Making
Decathlon collects and analyzes vast amounts of customer data to drive product development and marketing strategies. This data-driven approach not only meets customer demands but also strengthens Decathlon's brand image.
For Example, Through data analytics, Decathlon identified a growing trend in eco-conscious consumers. In response, it launched the Forclaz Eco range, featuring sustainably sourced hiking gear.
Decathlon's Innovation Quadrant
Decathlon invests heavily in research and development to create innovative products. They have dedicated R&D teams working on material technology, product design, and user experience, ensuring their products are both cutting-edge and user-friendly.
Decathlon’s Innovation Quadrant categorizes products based on the degree of innovation:
Small Improvements - Products with incremental enhancements. For instance, Decathlon's rechargeable head torch with enhanced specifications stood out in the market.
Technical Innovations - Products with incorporated technical advancements. For Example, Products like the long-distance 920e connected bike with an automatic gearing system showcased technical prowess, making them superior and user-friendly.
User Experience Innovation - Products focused on enhancing the overall user experience. For Example, Lighter clothing and trekking instruments catered to the specific needs of enthusiasts.
Breakthrough Innovation - Products with groundbreaking features, like a tent that can be pitched in two seconds. For Example, The two-second pitch-up Quechua tent was groundbreaking, saving time and energy for hikers and addressing specific challenges faced in harsh conditions.
Decathlon's Fast Hiking project group always continues to move forward quickly, constantly working on something even lighter and more efficient.
The goal is to gain 15 to 20% on weight each time. It might seem marginal, but for shorts that weigh around 130g in size L, that means flirting with the 100g bar, while remaining at a very competitive price.
BUSINESS LESSONS FROM DECATHLON
Customer-Centric Approach - Decathlon proves prioritizing customer satisfaction helps us build brand loyalty and drive growth.
Vertical Integration for Cost Efficiency - Decathlon teaches us to streamline operations and reduce costs by controlling the entire supply chain.
Innovation and R&D Investment - Decathlon's success shows us continuous innovation is essential for staying competitive and meeting customer demands.
Global Expansion with Local Adaptation - Decathlon show how, customizing offerings as per customer segments and regions, helps penetrate new markets effectively.
Data-Driven Decision Making - Using data insights cah help organizations take informed decisions, optimize processes, and understand customer behavior better.
Affordable Pricing without Compromising Quality - Decathlon clearly explains, how Offering value for money works by optimizing costs while still maintaining the product quality.
Employee Engagement and Expertise - Investing in employee training and empowerment is crucial for delivering exceptional service and enhance brand image.
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