This SECRET Brand is KILLING Nike and Adidas in India? | Decathlon Business Case Study
Summary
TLDRThe script explores Decathlon's remarkable success in the Indian sports industry, outperforming giants like Nike and Adidas. It highlights the brand's strategic focus on the unorganized market, targeting hopeful and beginner athletes with budget-friendly, high-quality products. The immersive store design, knowledgeable staff, and innovative product offerings have contributed to Decathlon's triumph, emphasizing the importance of understanding market gaps, customer experience, and product innovation over celebrity endorsements and aggressive marketing.
Takeaways
- đ The Indian Sports industry is one of the fastest-growing globally, with a growth rate significantly higher than the global average in recent years.
- đââïž A common challenge for young athletes is the availability of sports equipment, especially for niche sports like badminton, horse riding, archery, and hiking.
- đïž Decathlon, a mega sports store in Bangalore, offers a wide range of sports equipment and has become a prominent player in the Indian market.
- đ Decathlon has outperformed major brands like Nike, Adidas, and Reebok in India without celebrity endorsements or TV ads, achieving higher revenue.
- đĄ The brand's success can be attributed to identifying and filling a gap in the crowded Indian sports market, focusing on providing affordable and accessible sports goods.
- đ Decathlon's revenue in India is significantly higher than that of Adidas, Nike, and Reebok combined, demonstrating its strong market presence.
- đ Decathlon's store design encourages walk-by purchases with an immersive shopping experience and a wide range of sports gear available for trial.
- đ€ The company's employees are sports enthusiasts who focus on educating customers and promoting the right product for their needs, building trust and customer loyalty.
- đ° Decathlon's pricing strategy includes offering high-quality products at competitive prices, often 30-40% cheaper than competitors, by minimizing marketing costs and localizing production.
- đ ïž Innovation is a key driver for Decathlon, with a range of products that offer small improvements to breakthrough innovations, enhancing user experience and product performance.
- đ The story of Decathlon teaches valuable business lessons, such as the potential of the unorganized market in India, the importance of the physical shopping experience, and the power of product innovation over marketing.
Q & A
What is the current state of the Indian Sports industry compared to the global sports industry?
-The Indian Sports industry is one of the fastest-growing in the world, with a growth rate considerably higher than the 5% global growth seen in the sports industry over the last five years.
What is a common challenge faced by young athletes looking to participate in various sports?
-A common challenge faced by young athletes is the problem of equipment and gear, such as finding where to buy a good baby badminton racket or gear for sports like horse riding, archery, or hiking.
What is the Decathlon mega store and how does it address the equipment problem for young athletes?
-The Decathlon mega store in Bangalore is a large retail outlet that offers a wide range of sports equipment and gear, addressing the issue of availability and helping young athletes find the necessary equipment for various sports.
How does Decathlon compare to other sports brands like Nike, Adidas, and Reebok in terms of revenue in India?
-Decathlon has outperformed these brands in India, with a revenue of 2936 crores, compared to Adidas at 1551 crores, Nike at 814 crores, and Reebok at 417 crores.
What is unique about Decathlon's marketing strategy in India?
-Decathlon's marketing strategy in India is unique as it does not rely on celebrity endorsements or TV ads, yet it manages to generate more revenue than Nike, Adidas, and Reebok combined.
What was the state of the sports goods market in India in the early 2000s?
-In the early 2000s, the sports goods market in India was largely unorganized, with a limited selection of products available at neighborhood shops or high-end branded stores that catered primarily to elites and casual enthusiasts.
How did Decathlon differentiate itself in the Indian market by targeting a specific customer segment?
-Decathlon differentiated itself by targeting the large unorganized market of hopeful and beginner customers with tight budgets, offering them affordable and accessible sports goods.
What are the three key elements of Decathlon's store design that make it effective?
-The three key elements of Decathlon's store design are an immersive experience with ample space to try products, knowledgeable staff who educate customers and encourage free use of products, and strategic product placement that promotes impulse buying and value for money.
How does Decathlon manage to offer high-quality products at low prices?
-Decathlon offers high-quality products at low prices by renting store spaces, avoiding aggressive marketing, keeping stores simple, and manufacturing products in the same country they are sold, with plans to locally produce 85% of their products by 2026.
What are the four categories of products in Decathlon's Innovation quadrant?
-The four categories are products with small improvements and innovations, products with technical innovations, products with extraordinary user experience innovations, and products with breakthrough innovations.
What are the key lessons that can be learned from Decathlon's success in India?
-Key lessons include recognizing the potential of the unorganized market in India, the importance of the touch and feel factor in retail, and prioritizing product innovation over marketing innovation for sustainable business success.
Outlines
đ Growth of Indian Sports Industry and Decathlon's Impact
The Indian Sports industry is experiencing rapid growth, outpacing global averages, yet faces challenges such as equipment accessibility for budding athletes. Decathlon, a French sports retailer, has successfully entered the Indian market, offering a wide range of affordable sports gear and outperforming established brands like Nike, Adidas, and Reebok in revenue. The company's strategy focuses on catering to the needs of young athletes and the general public, filling a gap in the market for affordable and quality sports equipment. Decathlon's business model is highlighted as an example of success without celebrity endorsements or heavy marketing budgets, emphasizing the importance of identifying market gaps and effective business strategies.
đȘ Decathlon's Market Strategy and Store Design
Decathlon identified four types of customers in the Indian sports market: hopeful customers with limited budgets, beginners with occasional purchases, casual enthusiasts who value branded products for fashion, and elites who are professional players seeking performance enhancement. The brand strategically targeted the unorganized market, focusing on hopeful and beginner customers. Decathlon's store strategy involves creating an immersive shopping experience with ample space for customers to try out products, which triggers the 'endowment effect' and increases the likelihood of purchase. The store design is praised for its effectiveness in enticing walk-by customers to make purchases, with 37% of visitors ending up with an unplanned buy.
đïž Employee Training and Product Placement at Decathlon
Decathlon's employees are carefully selected for their passion for sports and are trained to educate customers rather than aggressively sell to them. This approach builds trust and ensures customers feel comfortable trying products without pressure. The store's product placement is strategic, with affordable items at the entrance to create a perception of value and frequently purchased items placed deeper inside to encourage exploration and impulse buying. Decathlon's commitment to offering quality products at reasonable prices, backed by long-lasting warranties, differentiates it from cheaper brands and contributes to its success in the market.
đĄ Innovation and Differentiation in Decathlon's Product Range
Decathlon's product innovation strategy is categorized into four types: small improvements, technical innovations, user experience innovations, and breakthrough innovations. Examples include a rechargeable head torch with extended battery life and brightness, an automatic gearing system for bikes, lightweight trekking equipment, and a tent that can be pitched in two seconds. These innovations have made Decathlon's products stand out without the need for celebrity endorsements or expensive marketing campaigns. The company's focus on product innovation over marketing has been a key factor in its rise to prominence in the Indian and global sports retail market.
đ Business Lessons from Decathlon's Success
The rise of Decathlon offers valuable lessons for entrepreneurs and businesses. It highlights the potential of the unorganized market in India, which has been largely untapped and offers significant growth opportunities. The importance of the touch and feel factor in retail, even in the era of e-commerce, is underscored by the success of Decathlon's physical stores. Lastly, product innovation is emphasized as a critical differentiator that can outperform marketing efforts, suggesting that creating high-quality products is fundamental to building a successful and enduring business.
Mindmap
Keywords
đĄIndian Sports Industry
đĄEquipment and Gear
đĄDecathlon
đĄRevenue
đĄBusiness Strategies
đĄUnorganized Market
đĄStore Design
đĄProduct Innovation
đĄCustomer Experience
đĄPrice Strategy
đĄMarketing Innovation
Highlights
The Indian Sports industry is one of the fastest-growing in the world, with a growth rate considerably higher than the global average over the last five years.
A common challenge for young athletes is the difficulty in finding affordable and appropriate sports equipment for various sports.
Decathlon, a mega sports store in Bangalore, offers a wide range of sports equipment, making it a go-to destination for sports enthusiasts.
Decathlon has become larger than Nike, Adidas, and Reebok in India, despite not having celebrity endorsements or TV ads.
The brand's revenue in India surpasses that of Nike, Adidas, and Reebok combined, highlighting its success in the market.
Decathlon's business strategy focuses on identifying gaps in the market and targeting customers overlooked by competitors.
The sports market in India is categorized into hopeful customers, beginners, casual enthusiasts, and elites, each with different needs and budgets.
Decathlon entered the Indian market by targeting the large unorganized sector, offering products for hopeful and beginner customers.
The store's design encourages customers to try and interact with products, increasing the likelihood of purchase through the endowment effect.
Decathlon's employees are sports enthusiasts who prioritize educating customers and allowing them to freely use products in-store.
Product placement in Decathlon stores is strategic, with affordable items at the entrance and frequently bought products placed deeper inside to encourage exploration and impulse buying.
Decathlon offers high-quality products at lower prices by renting stores, minimizing marketing costs, and manufacturing locally.
The company's innovation strategy includes small improvements, technical innovations, extraordinary user experience, and breakthrough innovations.
Decathlon's success demonstrates the potential of the unorganized market in India and the importance of physical touch and feel in retail.
Product innovation is emphasized as a key differentiator, suggesting that great products can sell themselves without the need for extensive marketing.
Lessons from Decathlon's rise include the opportunities in the unorganized market, the value of the in-store experience, and the primacy of product innovation over marketing.
Transcripts
the Indian Sports industry is one of the
fastest growing in the world although on
a smaller base and this is considerably
higher than the five percent growth the
world is seeing in terms of the sports
industry in the last five years a big
roadblock with many young kids taking up
a variety of sports is generally the
problem of equipment and gear where to
buy a good baby badminton racket where
to find gear for sports like horse
riding or archery or even for hiking
well we've got the answer for you the
decathlon mega store in Bangalore
[Music]
so it isn't the toy store we're talking
about but a mega Sportsman
decathlon decathlon decathlon decathlon
is bigger than Nike Adidas and Reebok in
India
[Music]
hi everybody if you want to learn how to
build a legendary business in a hyper
competitive market this episode is for
you if you're someone who wants to learn
how to spot a gap in a crowded Market
this episode is for you because the
story that I'm about to tell you today
is the story of a brand that has beaten
giants like Nike and Adidas in their own
game in India while its competitors have
star-studded celebrity endorsements this
brand doesn't have any celebrity
endorsing them doesn't have any TV ad
running and yet it does more Revenue in
India than Nike Adidas and Reebok
combined this brand that I'm talking
about is none other than decathlon and
you will be stunned to know that while
Adidas earned a revenue of 1551 crores
Nike stood at 814 crores Reebok stood at
417 crores whereas decathlon alone
earned a revenue of
2936 crores the question is without a
big fat marketing budget without a
celebrity endorsement how on Earth did
decathlon crack the Indian market what
are the business strategies that held
them stand out in the crowded Indian
Sports market and what are the business
lessons that we need to learn from the
iconic rise of decathlon in India this
video is brought to you by chat GPT plus
communication masterclass course people
if you are somebody who struggles to
speak your ideas out in public if you
are somebody who lacks the confidence to
speak in public or if you are somebody
who often mumbles while presenting your
thoughts I would highly recommend you to
join our communication masterclass
course this course is a six weeks course
whereby I will take you step by step
from a business level all the way up to
a tedx level presentation skill the best
part is that if you have any doubts I
will personally talk to you during your
weekly live sessions to help you
overcome every fear you have cherry on
the cake you'll also get special access
to the chat GPD module whereby I will
teach you how to use the secret proms in
chat GPT for storytelling for business
research and even English speaking this
is why now it's communication
masterclass plus chat GPT course put
together so if you also want to master
your art of communication and if you
want to present your ideas in the most
powerful manner possible come join our
communication masterclass course using
the link below and I will see you in the
live session
[Music]
to understand the genius behind
decathlon let me take you back to the
nostalgic 1990s and early 2000s Market
of India
[Music]
most is the secret of my energy
[Music]
[Music]
drinks big boys
active this was a time when you and I
were just super energetic children who
spent all our summers playing Cricket
under the scorching heat of the Sun and
during that time if you remember buying
a tennis ball was a big big deal this
was because it required equal
contribution from all 10 children and
after a lot of fighting and struggle the
moment we started playing Five balls
down the line there always used to be
that one kid who hit the ball into a
cranky uncle's house and that was it
game over after that we had no other
option but to go home and drink rasna
good old days isn't it now you tell me
when we bought those tennis balls did we
buy them from a branded store not at all
right we used to visit that one old
neighborhood shop where our Chacha would
sell sports goods and the collection
that he had was always limited to mrf
bats locally produced footballs cycles
and at best a cricket kit this was the
story of every middle class household in
India
at the same time for affluent people
they were high-end Brands like Nike
Reebok and Adidas at the mall
but even in those branded stores they
only sold shoes and April that's it
but if you look at the sports Market of
India objectively it was Way Beyond
cricket and football and it was Way
Beyond just Gully Cricket this Market
had four categories of people the first
type of customers were hopeful customers
these were people like you and me who
had good skills with the game but always
had a tight budget in simple words given
a choice between English Willow and
Kashmir below we would always buy a
Kashmir Willow because it was cheap the
second type of customers were beginners
these were people who had less skill
plus a smaller budget and these were
people who would occasionally purchase
sports goods just to try out a sport and
surprisingly there are beginners in all
sports in India starting from tennis to
badminton to even squash but somehow
back then the gear for these ports were
not easily available
the third type of customer were casual
enthusiasts these people are not skilled
but they are rich enough to buy great
products for example we always had this
one kid who never scored Beyond 10 runs
but always wore a Nike shoe and always
played with an SG bat among adults these
are rich people who buy branded products
even for a trip to Goa so for them
branded items are primarily fashion
choices and finally there are Elites
these are individuals who possess both
Superior skills and financial
flexibility they would buy products not
for a hobby but to improve their
performance basically professional
players this is a broad categorization
of the sports Market of India
now if we look at the brands for these
different types of customers we will see
that Nike Adidas and Sketchers always
catered and still cater to the elites
and Casual enthusiasts in the market
but back in the early 2000s there was a
huge Market of hopefuls and beginners
that bought products only from
neighborhood shops as in the unorganized
Market to put that into perspective in
2012-13 while the sports goods Market of
India was worth 2 billion dollars 75
percent of this Market was unorganized
and only 25 percent was organized so
three out of four Indians were buying
products from the neighborhood Chacha
rather than Nike and atilas so when
decathlon entered the Indian market in
2009 instead of competing in the small
Market with big players they decided to
compete with the smaller players in the
big unorganized Market
so instead of making products for the
elites and Casual enthusiasts they made
products for hopefuls and the beginners
with tight pockets in India
this is where we saw the rise of
decathlon stores all across the country
there are 1 600 stores in almost 60
countries across the world we are now on
a fast acceleration from one store in
2009 to four stores into
to all to the half century mark today in
India we provide over 50 Sports ranging
from badminton to inline skates each
decathlon store offers an amazing user
experience through the store events and
workshops now this brings us to the
Second Step which is their store
strategy now if you have ever been into
a decathlon store you know that it's
nothing short of a Sportsman's paradise
and there is something very special that
makes you just want to buy everything if
you've ever felt this you are not the
only one turns out decathlon's story
design is so amazing that according to a
Study 37 percent of the people who came
into a decathlon store ended up with a
walk by purchase as in they were just
walking by and they just decided to buy
something from decathlon the question is
what is so extraordinary about their
store design
well there are three elements that make
geek Athlon stores super effective
firstly if you've ever been to a
decathlon store you would realize that
it offers an immersive experience and
inside the store each section has a
complete set of gears for every single
Sport and each section gives you enough
space to play and use the products
freely this is what temps you to buy the
product in the retail business it's
called the endowment effect so when
customers touch or hold a product they
begin to feel a sense of ownership over
it and this feeling can make the product
seem more valuable to them which
eventually increases the probability of
sale in terms of statistics research
says that Shoppers who touch the
products are willing to pay more for
them than the Shoppers who only look at
the products in fact in an experiment
participants who could touch a mug were
willing to pay 60 more for the mug than
the participants who could only see the
mug another study published in a journal
stated that the longer a shopper holds
an item the more likely the there to buy
it so the study found that Shoppers who
held an item for 30 seconds were more
likely to buy it as compared to the
Shoppers who held the item for 10
seconds so do you see what decathlon
stores do they make you touch and feel
the product so well that automatically
the endowment effect kicks in and makes
you want to buy the product the second
element of the store has to do with
their wonderful employees did you know
decathlon chooses only those people who
are sports enthusiasts as their
Executives and they deliberately choose
only those people who are actively
playing the sport on top of that during
their training period they are given
three instructions never sell to the
customer always educate the customers
and most importantly always allow the
customers to freely use the products
without disturbing them for example if
you are a beginner looking for tennis
shoes and you see three shoes costing
two thousand three thousand five
thousand ideally if you have the budget
the staff must convince you to buy the
5000 rupee product
but even then a decathlon staff would
insist you to buy the 2000 rupee product
only because it would be good enough for
you and not just that because she is a
sports player herself she will also
explain why that product is best for you
and these interactions cultivate such an
amazing Speed Of Trust that you can walk
into a decathlon store without being
scared of upsells or forced sales and
finally the product placement of
decathlon is what we found very very
interesting we saw that decathlon offers
products from just 100 rupees all the
way to 1 lakh rupees and very smartly
they Place their cheapest products at
the entrance so that they can create an
impression of affordable prices secondly
just like Walmart keeps the milk packets
way inside the store even decathlon
places the frequently bought products
way inside so that while you walk inside
you can see other products and hence
increasing the probability of impulse
buying according to a study 84 percent
of customers spent more than 30 minutes
at the DC Athlon store and like we saw
before the more time they spend the
products the more likely are they to buy
them and lastly to ensure recurring
customers decathlon ensured that it
always offered value for money by
offering great quality products at
reasonable prices their products are
sturdy they offer long lasting
warranties like a two year warranty on
shoelaces and finally they offer a price
that's 30 to 40 percent cheaper than the
competition but the question over here
is how on Earth are they able to sell
products of such good quality at such
low prices
well there are three straightforward
reasons for that number one just like
dmart the R stores are rented secondly
they do not spend aggressively on
marketing and they do not spend on
making their stores fancy and most
importantly they manufacture their
products in the same country they sell
for example in India they currently have
eight partner factories where they
manufacture their products and by 2026
their aim is to locally produce 85
percent of their products
now this begs the question if only cost
was their USB then how did decathlon
differentiate itself from other cheap
Brands and how did they stand out in the
unorganized Market of India
well this is where their Innovation
quadrant comes into play this coordinate
has four categories of products the
first category of products are products
with small improvements and Innovations
for example in the unorganized Market
the basic head torch was available with
a 20 hour battery and a 30 Lumen
brightness light but decathlon worked on
it and they optimized the product in
such a way that they made a rechargeable
head torch with a brightness of 200
Lumen with a 30 hour battery life and
with multiple lighting modes so by
default the product stands out merely
because of the specification and this
brings us to the second category where
there are products which have Technical
Innovations Incorporated in them for
example back then when you took normal
bikes to a hilly terrain you needed to
manually change the gears this is when
decathlon came up with a long distance
920e connected Bike by between this bike
offered an automatic gearing system that
would automatically change the gears
according to the terrain this made
idling way smoother and easier so again
the product stands out because of the
technical Innovation which makes it way
better and way easier to use
the third category of products are
products that have extraordinary user
experience Innovation for example they
worked obsessively to reduce the weight
of trekking products by 15 to 20 now for
people like you and me 15 to 20 lighter
is not a significant Improvement right
but if you go and talk to a trekking
Enthusiast or a mountaineer they will
tell you that a 15 to 20 reduction in
weight is a blessing and sometimes it
could even be a life saver and decathlon
did not just make trekking instruments
lighter they even made trekking clothes
lighter Once Upon a Time their shots
weighed around 130 grams in size L but
they worked very hard on it and reduced
it to just 100 grams so if you carry 10
pieces of clothes that's 300 grams
reduced in just clothing
and their best record is making a
t-shirt that weighs a record of just 50
grams
and this brings us to the last category
of innovation which are breakthrough
Innovation and these Innovations are
literally ground breaking Innovations
for example 10 years back the time to
pitch a tent was around 20 to 30 minutes
but you know what the Catalan came up
with a keshua tent that could be put up
in just two seconds Yes you heard that
right two seconds
now this was groundbreaking because it
saved the hikers a lot of time a lot of
energy and gave them extraordinary ease
when they were in harsh climatic
conditions it also had a great feature
of having the tent entirely dark so that
the sunlight doesn't penetrate and
disturb the Trekker while she was
sleeping
so do you realize when you see products
that are so good you don't need a
celebrity or a fancy ad to convince you
to buy them this is how by choosing the
untapped Market of beginners and
hopefuls by building immersive and
amazing stores and most importantly by
being obsessed with product Innovation
for four decades decathlon became a
legend not just in India but all across
the world
and this brings us to the last part of
the episode which are the lessons that
we need to learn from the iconic rise of
decathlon lesson number one while most
entrepreneurs are trying to compete in
the organized Market of India the
unorganized Market of India is actually
a very huge Market which has a huge
scope of both profits and growth and
it's not just decathlon but even other
legendary companies like haldiram and
havells they've built a million dollar
business by capturing this unorganized
Market of India lesson number two with
the rise of the e-commerce wave in India
the touch and feel Factor has become one
of the most powerful and yet one of the
most underrated elements in business so
while you may start your business online
do not ever ignore the physical touch
and feel factor that offline stores can
offer to your products and lastly always
remember product Innovation will always
Trump marketing innovation in short if
you fundamentally make great products
marketing becomes a secondary instrument
of sale and that is a mark of an
extraordinary business that's all from
Isis today guys if you learned something
available please make sure to the like
button in order to make YouTube happy
and for more such insightful business
and political case studies please
subscribe to our Channel thank you so
much for watching I will see you in the
next one bye bye
[Music]
Voir Plus de Vidéos Connexes
The Apple Case Study: Understanding Branding and Customer Loyalty
How Aman Gupta's MARKETING STRATEGY turned Boat into a 1500CR Company : Business case study
How Abercrombie Pulled Off One Of Retailâs Biggest Comebacks
Tata Tea Brand Story || Tata Tea Case Study || Tata Tea History || Tata Tea Famous Advertisement
How Tanishq HACKED the GOLD Market of India : Titan & Tanishq (A TATA Product) Business Case Study
How Nike shoes are made in the Factory || Why Nike Shoes are so Expensive?
5.0 / 5 (0 votes)