02 August 2023, Mumbai
Reliance Retail Ventures currently has a lot going on for it. On a positive note, profits have jumped 18.8 per cent year-on-year in the first quarter of 2023-24 to Rs 2,448 crore; gross revenue rose by 19.5 per cent year-on-year led by its grocery, electronics excluding personal devices, and fashion and lifestyle divisions.
Aided by growing footfalls, new store additions, and high conversions, Reliance Retail posted a 12.9 per cent growth in net profit to Rs 2,415 crore in Q4 of FY23, up from Rs 2,139 crore a year ago. For the year ending FY23, net profits grew 30 per cent to Rs 9,181 crore.
Meanwhile, Reliance Retail is refreshing its flagship high-street retail store brand Trends and as per media reports, it will launch a value-brand in the fashion division code-named Yousta which will go head-to-head with the Tata Group’s Zudio.
The plan is a big one and includes establishing a national footprint through 200 to 250 outlets in the coming years, with the brand launch happening in August 2023 at an undisclosed mall in Hyderabad. The plan also includes opening a 10,000 sq. ft. flagship store in Delhi.
Value fashion market a lure
The mass-clothing market in India has largely been through the unorganized sector and as lifestyle aspirations grow fast and furious across the country. This customer base promises great growth opportunities because of its sheer numbers.
Value fashion is the ‘new’ lucrative side of fashion retail that conglomerates operating particularly in garment retail are seriously interested in.
As Harminder Dingh, Co-founder of retail consultancy Wazir Advisors explains, while premium lifestyles and therefore premium brands are penetrating the Indian market at a healthy rate, 90 per cent of India’s overall consumption is going to happen in the value space. The opportunity in fashion is huge as millions of Indian consumers move up from unbranded apparel to branded fashion and lifestyle products.
In the works
Before Reliance Retail’s foray into this space, the Tata Group and Shoppers Stop were already working in this space. 1India Family Mart and V-Mart, the two dominant organised players in the large value market are now bracing themselves to rattle sabres with the corporate Goliaths.
The Tata Group’s Zudio, positioned as affordable fashion is on a quick expansion drive with plans to open 130 new outlets by the end of 2023, hoping to cash in as much as possible during the festive season.
With 350 stores nationwide in the bag, Zudio will have nearly 500 stores by the end of the year. Zudio seems to have cracked the code of India's fashion industry.
Value retailing
The $500-million fashion brand, which was unknown two years ago, is now giving established retailers like Westside, Pantaloons, and Max a run for their money. It has nailed value pricing by offering everything under 999.
Shoppers Stop, not to be left behind in the race has already rolled out its brand InTune in the value fashion segment and operates two stores in Hyderabad and Mumbai. Meanwhile, Reliance Retail has not yet divulged the code-name Yousta’s pricing range.
Refreshing Trends to capture the affordable fashion market
As value-fashion-led markets expand across the country in volumes, Reliance Retail is busy nurturing its already-in-play brand Trends. Spread across 1,100 cities across India, Reliance Retail already has 2,300 Trends stores, much more than Zudio.
The Trends chain is now undergoing a facelift to be more attractive and style-relevant to Indian Gen Zers, its base customers.
The facelift focuses beyond the design of the apparel – self-checkout counters, electronic shelf labels et al to attract its young customer base. Trends unveiled the new offer and format by opening a new outlet in Surat.
As the heartland of India moves into labels and brands, the conglomerates with their inherent advantages are set to win this one.
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