Decathlon To Invest Over Rs 900 Crore In India Over Next Five Years

Decathlon plans to invest Euro 100 million, equivalent to roughly Rs 933 crore, in India over the next five years in a bid to bolster its presence as the lucrative sports and athleisure market continues to draw new competitors.

The French sports retailer will allocate a sizeable portion of the investment towards store expansion. It plans to open 63 new stores, taking the total count to 190 across 90 cities. The company also expects to enhance the share of digital sales, which currently comprises 11–12% of the overall revenue.

Moreover, Decathlon wants to increase local manufacturing to 85% of total sales by 2026, up from the current 68%.

"India is a dynamic and growing market with a burgeoning sports culture," Sankar Chatterjee, chief executive officer of Decathlon India, said. "To make our products accessible to a wider audience, we aim to add 10–15 stores annually, with a focus on both major cities and small towns."

Chatterjee also pointed out that the country's complex regulatory landscape necessitates a slow but cautious approach to expansion.

"While we really want to expand faster, there are real challenges when it comes to property compliance. But rather than letting this hinder us, we have been accelerating our online presence to reach new areas where opening physical stores takes time," he said.

Decathlon, which made its India debut in 2009, saw its revenue jump to about Rs 4,500 crore last financial year, driven by high demand for fitness wear and sports equipment, Chatterjee said. He expects the company's domestic business to double over the next three to five years.

Its sales rose 37% to Rs 3,955 crore in fiscal 2023. The retailer, however, posted a net loss of Rs 18.6 crore during the fiscal ended March 2023, compared to a net profit of Rs 36 crore in the year-ago period. The profit figures for fiscal 2024, however, are not publicly available yet.

"India is a cornerstone of Decathlon's global ambition and we are committed to accelerating our growth here, expanding our reach, and making a positive impact on people's lives through sports," said Steve Dykes, global chief retail and country officer at Decathlon, highlighting India's potential to become a global manufacturing and innovation hub for the company. Currently, around 8% of the global product range, including cricket bats, accessories, and most hockey equipment, is produced in India.

Decathlon competes with Adidas, Nike, Puma, Asics and regional brands in the country's Rs 16,000 crore sports and athleisure market. Data analytics platform Statista forecasts that the market will reach Rs 40,200 crore by FY25. Footwear makes up the largest segment of the market, valued at about Rs 9,000 crore, and is expected to grow by 21% by FY25.

The increased focus on health and fitness, especially post-Covid pandemic, has prompted a surge of new entrants—big and small—into the sports and athleisure wear market, either independently or through partnerships.

Companies are also capitalising on the growing interest in sports beyond the traditional favourites of cricket and football, with increasing popularity in disciplines such as kabaddi, volleyball, hockey, and badminton.

Metro Brands Ltd., for instance, recently signed its first agreement with Italian sportswear brand Fila to tap into the athleisure market boom. Puma India's managing director, Abhishek Ganguly, resigned last year to launch his own athleisure venture, Agilitas Sports.

There are also some waiting to enter the market. Mukesh Ambani's oil-to-retail conglomerate Reliance Group is looking to launch a sports format that will directly compete with Decathlon.

Once operational, Reliance will have the advantage of functioning as a multi-brand retailer, in contrast to Decathlon, which is restricted from selling products from rival local and global brands due to the country's FDI regulations. Interestingly, non-private labels make up about one-fifth of Decathlon's global revenue.

Cricketer Sachin Tendulkar, along with former Swiggy Instamart head Karthik Gurumurthy and ex-Swiggy executive Karan Arora, is also set to introduce a new sports brand under SRT10 Athleisure Pvt.

Earlier this year, Decathlon said India is a "priority" market and expects it to be among the top five markets globally within five years.