Reliance Retail: Mukesh Ambani, the wealthiest man in India and Asia, is gearing up to challenge the French retail giant Decathlon. His company, Reliance Retail, is planning to launch a sports retail format that will directly compete with Decathlon. Post-COVID-19, there has been a significant surge in demand for sports products.
According to sources, Reliance Retail is negotiating leases for 8,000-10,000 square foot spaces in malls and high streets in major cities for this new brand. However, the company has yet to reveal the brand’s name.
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Reliance Retail’s Strategy
In recent years, Reliance Retail has expanded significantly, but sports products are not yet part of their portfolio. The country needs a retailer in this category that can compete with global companies. This sector has shown substantial growth, expected to continue. A mall operator mentioned that Reliance Retail is looking for spaces that can extend outside the mall, potentially including a play area, similar to Decathlon’s model.
Reliance Retail’s Sports Format Plans
| Objective | Compete with French retailer Decathlon |
| Target Locations | Malls and high streets in major cities |
| Space Requirement | 8,000-10,000 square feet |
| Special Features | Potentially include a play area similar to Decathlon’s model |
Decathlon’s Presence in India
Decathlon opened its first store in India in 2009. According to regulatory filings from the Registrar of Companies, Decathlon recorded a revenue of ₹3,955 crore in FY 2023, up from ₹2,936 crore in FY 2022 and ₹2,079 crore in FY 2021. Over the past two years, sales of leading sports brands have increased significantly due to rising fitness awareness and growing demand for athletic apparel.
Decathlon’s Revenue Growth
| Fiscal Year | Revenue |
|---|---|
| 2021 | ₹2,079 crore |
| 2022 | ₹2,936 crore |
| 2023 | ₹3,955 crore |
Growth of Sports Brands
Regulatory filings show that brands like Puma, Decathlon, Adidas, Skechers, and Asics have recorded year-on-year growth of 35-60% since FY 2021. Combined, these brands generated ₹11,617 crore in revenue in FY 2023, up from ₹5,022 crore two years earlier.
Top Sports Brands’ Growth
| Brand | FY 2021 Revenue | FY 2023 Revenue |
|---|---|---|
| Puma | ₹1,200 crore | ₹2,200 crore |
| Decathlon | ₹2,079 crore | ₹3,955 crore |
| Adidas | ₹1,000 crore | ₹1,800 crore |
| Skechers | ₹500 crore | ₹900 crore |
| Asics | ₹243 crore | ₹762 crore |
| Combined Total | ₹5,022 crore | ₹11,617 crore |
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Decathlon’s Multi-Brand Strategy
Decathlon is in talks with the Indian government to sell products from rival local and global brands in its stores, aiming to operate as a multi-brand retailer. Globally, 20% of Decathlon’s revenue comes from competing brands, but Indian FDI regulations currently prevent it from selling other brands’ products.
| Global Competitor Brands’ Revenue Share | 20% |
| India’s Situation | Cannot sell other brands’ products due to FDI rules |
India: A Growing Market for Sportswear
India is one of the largest markets for these companies, and a large store format similar to Decathlon could be a game-changer. Brands have capitalized on the popularity of casual styles, especially during the pandemic. With a population of 1.4 billion, India is one of the fastest-growing and largest international markets for sportswear and footwear companies. Most global brands have been present in India for over two decades, leveraging partnerships with cricket and other sports activities to promote their products.
India’s Sportswear Market Potential
| Population | 1.4 billion |
| Opportunity | One of the fastest-growing international markets |
| Brands’ Presence | Over two decades |
| Key Strategy | Partnerships with cricket and other sports |
Conclusion
Mukesh Ambani’s plan for Reliance Retail to enter the sports retail market could bring significant changes to the Indian market and provide stiff competition to Decathlon. This new sports format from Reliance Retail is poised to tap into the growing demand for sports products, offering Indian consumers more choices and driving growth in the sector.
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