Decathlon sets off with 100% FDI in sports retail

Nilofer D'Souza
Published: 02, Apr 2013

I was a Features writer at Forbes India, where I wrote primarily on healthcare and explore retail as a sector. The technologies that make both these industries tick interests me greatly. For story ideas or feedback you can reach me on Twitter @Niloferd

Most of Decathlon's cash and carry formats are now open to all in its new retail format
Most of Decathlon's cash and carry formats are now open to all in its new retail format

In what could put the government’s controversial new foreign investment policy in retail to an impact test, French group Auchan has announced its first retail store, Decathlon, in Bangalore. It is the first big-format niche retail chain to open in an increasingly fitness-conscious urban India that craves for sporting space and quality equipment.

The Euro 43 billion French group’s venture is one of the early bird licences under a new investment policy which allows 100 per cent foreign funding of single-brand retail stores. Though the government had cleared the policy in November, some niggling issues regarding local sourcing had remained and it was finally notified in January. Auchan’s proposal to invest Rs 700 crore went through on February 13, the same day that the FIPB also cleared single-brand retail plans of Promod SAS, Le Creuset and Fossil.

Most of Decathlon’s stores now sport an ‘open to all’ sign to indicate the change in its policy. It states the change on its Facebook page too. In a comment to customers, Decathlon Mumbai, says, “FDI in retail did not allow foreign retailers to sell to individuals directly. We were respecting the law of the land by being a wholesaler.”

Decathlon does not have a clear competitor as the sports goods retail market in India is populated with small over-the-counter stores or a few hundred square feet space in department stores. It has been present in the wholesale market with a cash-and-carry model for the past three years. This would be the first test of big-format retail’s impact on small merchants in a niche segment.

Decathlon stores are big—sprawling over at least 4000 square feet. In comparison, sports goods shops in the country are tiny. Even in malls or supermarkets, sports goods get only a corner, about half the area of a typical Decathalon store. It uses the extra space for indoor sporting facilities.

“It could turn out to be a category killer, and create and define the category because of the experience and product mix it has,” says Devangshu Dutta, chief executive, Third Eyesight, a retail consultancy, “Even with wholesale operation in Bangalore, they have done fairly well. They broke even fairly quickly,” he says.

The company opened a store in Mumbai last week and plans to open in Hyderabad and Chandigarh too. About 3000 customers thronged the store on the first day. That is a big draw for a niche segment currently valued at Rs 2,500 crore but estimated to grow to $6 billion by 2025 in India.

In cities, people are starved for entertainment beyond movies, restaurants and malls. Decathlon has potential to provide weekend entertainment alternatives. That fits with its own target audience – the family.

  • bishal gupta

    what is the laws and regulations for decathlons leasehold agreements with its land owners in respective stores across India??? like is decathlon operating in its own piece of land or is it lease agreement with land owners in respective cities in which its operating?? if its true then what are the norms from government for its leasehold agreement with owners, Since its FDI affiliated company??

    on May 1, 2016
  • Kamakshi Besnard

    Decathlon is in not part of the Auchan groupe - pls check your information before publishing.

    on Mar 29, 2016
  • Gym Equipment Stores In Bangalore | qualified - qualified gyms

    [...] Decathlon sets off with 100% FDI in sports retail – French group Auchan has announced its first retail store, Decathlon, in Bangalore. It is the first big-format niche retail chain to open in an increasingly fitness-conscious urban India that craves for sporting space and quality equipment. The Euro 43 … [...]

    on Dec 8, 2015
  • Zahir Laliwala

    The size of the Decathlon stores are wrongly indicated , The minimum size is 10,000 Sq. feet in India and not 4000 Sq. feet . More information would help understanding the format of the stores Decathlon is having in India . The little but good quality sports facility they are creating outside their stores is a great initiative to promote sports .

    on Feb 21, 2015
  • Sibi Saseendran

    Decathlon is part of Oxylane group,not Auchan.Kindly note.

    on May 3, 2014
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  • Anoop Savio

    I never like sports. But then a visit to Decathlon changed my mind set. The main reason is about their passion towards what they sell and the 'experience' they gift is unique. Wonderful place for a sports enthusiast. Their referral system hindered certain customers from visiting the store. Now ‘Open For All’ will be a major positive shift in their business.

    on Apr 2, 2013
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