In a strategic move to expand its retail offerings, Noel Tata-led Trent has launched a new standalone store format, Zudio Beauty, aimed at competing in the mass-priced beauty segment with͏͏ brands͏͏ such͏͏ as͏͏ Hindustan͏͏ Unilever‘s͏͏ Elle18,͏͏ Sugar͏͏ Cosmetics,͏͏ Health͏͏ &͏͏ Glow,͏͏ and͏͏ Colorbar.
Expansion͏͏ Strategy͏͏ Targets͏͏ Affordable͏͏ Beauty Market:
“The͏͏ new͏͏ concept͏͏ store͏͏ is͏͏ part͏͏ of͏͏ our͏͏ strategy͏͏ to͏͏ penetrate͏͏ the͏͏ affordable͏͏ beauty͏͏ segment,͏͏ especially͏͏ as͏͏ competitors͏͏ like͏͏ Reliance,͏͏ Nykaa,͏͏ and͏͏ Shoppers͏͏ Stop͏͏ are͏͏ concentrating͏͏ on͏͏ premium͏͏ and͏͏ luxury͏͏ categories,”͏͏ said͏͏ two͏͏ executives͏͏ familiar͏͏ with͏͏ the͏͏ development.͏͏ They͏͏ also͏͏ mentioned͏͏ that͏͏ the͏͏ first͏͏ store͏͏ has͏͏ opened͏͏ in͏͏ Bengaluru,͏͏ with͏͏ Trent͏͏ planning͏͏ to͏͏ launch͏͏ additional͏͏ outlets͏͏ in͏͏ major͏͏ cities,͏͏ including͏͏ Gurugram,͏͏ Pune,͏͏ and͏͏ Hyderabad.
Tata,͏͏ the͏͏ founder͏͏ of͏͏ India’s͏͏ first͏͏ beauty͏͏ brand͏͏ Lakme,͏͏ which͏͏ was͏͏ later͏͏ sold͏͏ to͏͏ HUL,͏͏ is͏͏ already͏͏ involved͏͏ in͏͏ the͏͏ beauty͏͏ segment͏͏ with͏͏ its͏͏ high-end͏͏ cosmetics͏͏ store͏͏ format,͏͏ Tata͏͏ Cliq͏͏ Palette.
Zudio’s͏͏ Rapid͏͏ Growth͏͏ Outpaces͏͏ Competitors:
Zudio͏͏ has͏͏ become͏͏ a͏͏ significant͏͏ success͏͏ for͏͏ the͏͏ company͏͏ and͏͏ is͏͏ now͏͏ one͏͏ of͏͏ the͏͏ largest͏͏ apparel͏͏ brands͏͏ in͏͏ the͏͏ country.͏͏ Since͏͏ its͏͏ launch͏͏ in͏͏ FY17͏͏ as͏͏ part͏͏ of͏͏ Star͏͏ stores,͏͏ Zudio͏͏ has͏͏ seen͏͏ considerable͏͏ growth,͏͏ bolstered͏͏ by͏͏ an͏͏ exclusive͏͏ design͏͏ portfolio͏͏ and͏͏ a͏͏ low͏͏ gross͏͏ margin͏͏ of͏͏ 35-40%.͏͏ This͏͏ strategy͏͏ has͏͏ allowed͏͏ the͏͏ company͏͏ to͏͏ achieve͏͏ high͏͏ store͏͏ productivity,͏͏ generating͏͏ revenue͏͏ of͏͏ INR͏͏ 16,300͏͏ per͏͏ sq͏͏ ft—twice͏͏ the͏͏ industry͏͏ average.
Established͏͏ as͏͏ a͏͏ separate͏͏ format͏͏ from͏͏ Star͏͏ Bazaar͏͏ in͏͏ FY18,͏͏ Zudio͏͏ now͏͏ contributes͏͏ over͏͏ a͏͏ third͏͏ of͏͏ Trent’s͏͏ total͏͏ revenue,͏͏ up͏͏ from͏͏ just͏͏ 8%͏͏ a͏͏ few͏͏ years͏͏ ago.͏͏ It͏͏ has͏͏ become͏͏ the͏͏ fastest-growing͏͏ format͏͏ for͏͏ Trent,͏͏ surpassing͏͏ Westside͏͏ in͏͏ store͏͏ count͏͏ in͏͏ FY22͏͏ and͏͏ in͏͏ revenue͏͏ in͏͏ FY24.͏͏ As͏͏ of͏͏ June͏͏ this͏͏ year,͏͏ the͏͏ company͏͏ operated͏͏ 228͏͏ Westside͏͏ stores,͏͏ 559͏͏ Zudio͏͏ stores,͏͏ and͏͏ 36͏͏ stores͏͏ across͏͏ other͏͏ lifestyle͏͏ concepts.
Continue͏͏ Exploring:͏͏ Tata’s͏͏ affordable͏͏ fashion͏͏ label͏͏ Zudio outpaces͏͏ Westside,͏͏ surging͏͏ ahead͏͏ with͏͏ record͏͏ expansion͏͏ and͏͏ sales͏͏ in͏͏ FY24
Despite͏͏ several͏͏ retailers͏͏ operating͏͏ in͏͏ the͏͏ value͏͏ retailing͏͏ segment͏͏ for͏͏ over͏͏ a͏͏ decade,͏͏ Zudio͏͏ has͏͏ outperformed͏͏ most͏͏ existing͏͏ players͏͏ in͏͏ both͏͏ revenue͏͏ and͏͏ store͏͏ count.͏͏ Analysts͏͏ anticipate͏͏ a͏͏ similar͏͏ trend͏͏ in͏͏ the͏͏ beauty͏͏ sector͏͏ as͏͏ well.
“This͏͏ marks͏͏ another͏͏ disruptive͏͏ initiative͏͏ by͏͏ Trent͏͏ after͏͏ its͏͏ success͏͏ in͏͏ the͏͏ value͏͏ apparel͏͏ segment,͏͏ and͏͏ it͏͏ has͏͏ the͏͏ potential͏͏ to͏͏ succeed͏͏ if͏͏ consumers͏͏ appreciate͏͏ the͏͏ quality,”͏͏ stated͏͏ Abneesh͏͏ Roy,͏͏ executive͏͏ director͏͏ at͏͏ Nuvama.͏͏ “The͏͏ competition͏͏ in͏͏ this͏͏ space͏͏ is͏͏ primarily͏͏ similar͏͏ to͏͏ Nykaa,͏͏ which͏͏ could͏͏ negatively͏͏ impact͏͏ them͏͏ and͏͏ other͏͏ fast-moving͏͏ consumer͏͏ goods͏͏ brands.”
India:͏͏ A͏͏ Key͏͏ Growth͏͏ Market͏͏ for͏͏ Global͏͏ Cosmetics
This͏͏ year,͏͏ L’Oreal͏͏ SA͏͏ and͏͏ Shiseido,͏͏ two͏͏ of͏͏ the͏͏ world’s͏͏ largest͏͏ cosmetics͏͏ companies,͏͏ stated͏͏ that͏͏ India͏͏ is͏͏ rapidly͏͏ emerging͏͏ as͏͏ a͏͏ key͏͏ growth͏͏ driver͏͏ for͏͏ them,͏͏ driven͏͏ by͏͏ its͏͏ growing͏͏ population͏͏ and͏͏ people’s͏͏ increasing͏͏ interest͏͏ in͏͏ beauty͏͏ products.
Continue͏͏ Exploring:͏͏ India’s͏͏ beauty͏͏ market͏͏ booms:͏͏ L’Oreal͏͏ and͏͏ Shiseido͏͏ set͏͏ sights͏͏ on͏͏ rapid͏͏ expansion͏͏ amid͏͏ growing͏͏ consumer͏͏ demand
L’Oreal͏͏ noted͏͏ that͏͏ India͏͏ is͏͏ already͏͏ its͏͏ fifth-largest͏͏ market͏͏ in͏͏ the͏͏ professional͏͏ products͏͏ division,͏͏ which͏͏ primarily͏͏ sells͏͏ products͏͏ to͏͏ salons.͏͏ Last͏͏ year,͏͏ Shoppers͏͏ Stop͏͏ collaborated͏͏ with͏͏ the͏͏ Japanese͏͏ firm͏͏ Shiseido͏͏ to͏͏ introduce͏͏ its͏͏ premium͏͏ beauty͏͏ brand,͏͏ Nars͏͏ Cosmetics,͏͏ to͏͏ India.
Market͏͏ Dynamics͏͏ Favor͏͏ Focused͏͏ Beauty͏͏ Brands:
Currently,͏͏ focused͏͏ beauty͏͏ brands͏͏ like͏͏ L’Oreal,͏͏ Mama͏͏ Earth,͏͏ Nivea,͏͏ and͏͏ Nykaa͏͏ hold͏͏ a͏͏ 33%͏͏ share͏͏ of͏͏ the͏͏ market͏͏ and͏͏ are͏͏ expected͏͏ to͏͏ grow͏͏ to͏͏ 42%͏͏ in͏͏ the͏͏ next͏͏ five͏͏ years.͏͏ In͏͏ contrast,͏͏ established͏͏ companies͏͏ such͏͏ as͏͏ HUL͏͏ and͏͏ Procter͏͏ &͏͏ Gamble,͏͏ which͏͏ currently͏͏ account͏͏ for͏͏ two-thirds͏͏ of͏͏ the͏͏ market,͏͏ are͏͏ projected͏͏ to͏͏ see͏͏ their͏͏ shares͏͏ decline͏͏ by͏͏ 900͏͏ basis͏͏ points͏͏ to͏͏ 58%͏͏ by͏͏ 2027,͏͏ according͏͏ to͏͏ a͏͏ joint͏͏ report͏͏ by͏͏ Redseer͏͏ Strategy͏͏ Consultants͏͏ and͏͏ Peak͏͏ XV.
“On͏͏ the͏͏ surface,͏͏ Zudio’s͏͏ existing͏͏ store͏͏ count͏͏ of͏͏ over͏͏ 550͏͏ may͏͏ suggest͏͏ that͏͏ the͏͏ rate͏͏ of͏͏ new͏͏ openings͏͏ could͏͏ slow,͏͏ making͏͏ it͏͏ difficult͏͏ to͏͏ achieve͏͏ the͏͏ target͏͏ of͏͏ 2,000͏͏ stores.͏͏ However,͏͏ our͏͏ analysis͏͏ reveals͏͏ that͏͏ there͏͏ is͏͏ substantial͏͏ room͏͏ for͏͏ Zudio’s͏͏ expansion,”͏͏ according͏͏ to͏͏ a͏͏ report͏͏ by͏͏ Citi͏͏ Research.
