Sports Retailer Decathlon's Big Bet On The India Growth Story

Decathlon is investing in manufacturing in India, to capitalize on its fast-growing market and diversify global production bases, marking its intensified commitment to the south Asian country.

The third biggest sportswear retailer, after Adidas and Nike, plans to spend €100 million on its retail, logistics and manufacturing operations in the next five years in the country, according to a report in the Financial Times.

Barbara Martin Coppola, CEO of the sportswear brand with 1,751 outlets in 72 countries, says that as India is increasing its production for the country, it can also expand its production for the world, including the 104 outlets already established in India.

The company is focused on increasing local manufacturing in India, hoping to reach 85 per cent by 2026, from the current 60 per cent.

Currently, Indian manufacturing comprises 8 per cent of the company's global production, which it intends to expand further.

Coppola announced that the company's global sales increased 12 per cent to €15.4 billion in 2022, with a net profit rise of 1 per cent to €923 million.

Alongside India, Decathlon remains committed to investing in China despite rising geopolitical tensions, according to Martin Coppola, who cited the company's ownership of four factories and 200 stores in the country and their long-term approach.

According to a spokesperson, Decathlon sees China as one of the world's most digitally advanced countries, and thus believes it's crucial to keep pace with the market.

Lockdowns played a role in driving up the percentage of online sales, with one-fifth of Decathlon's €1.2 billion sales in China, projected to come from online channels in 2022.

As Covid-19 restrictions lifted worldwide, the sales of home gym equipment like treadmills and stationary bikes declined in the last year. However, there has been an increase in demand for outdoor sports equipment, especially for racket sports such as pickleball and paddle.

Decathlon has plans to introduce a rental service for products such as kayaks, bikes, and tennis racquets.

In India, Decathlon is fast becoming one of the most sought after urban sporting brands.