24 November 2023, Mumbai
The Value Fashion Market in Small-Town India
The value fashion market in small-town India is booming, fueled by rising incomes and consumer expectations. Zudio, the flagship brand of Trent, is a prime example of this trend, facing stiff competition from other prominent retailers.
Zudio's Rapid Growth and Strategy
NZudio has experienced rapid growth since its launch in FY'17, expanding to over 350 standalone stores and generating revenues of Rs 3,540 crore.
The brand's franchise-owned company-operated model has been instrumental in reducing inventory costs, attracting the attention of national retailers like Yousta (Reliance Retail), Style-Up (ABFRL), and InTune (Shoppers Stop) who have adopted a similar strategy.
Market Analysts' Forecast
Market analysts from Motilal Oswal Financial Services predict a steady 6 percent CAGR growth for the value fashion segment from 2020 to 2026.
However, with rising disposable incomes and favorable demographic trends, the growth rate is expected to surge to a remarkable 23 percent CAGR.
Unorganized Dominance and Regional Retailers' Lag
Despite the segment's growth potential, unorganized retailers still hold a dominant position, accounting for nearly 57 percent of the market.
Regional retailers have yet to make a significant mark in this domain.
5 key insights :
- Booming Market: Rising incomes and consumer expectations drive growth.
- Zudio's Success: Rapid growth, 350+ stores, Rs 3,540 crore revenue.
- Franchise Model: Inventory cost reduction, national retailer adoption.
- Market Forecast: 6% CAGR growth, potential for 23% CAGR.
- Unorganized Dominance: Regional retailers' presence limited.
