Tata's Zudio vs Reliance's Shein the battle heats up in India’s fashion retail

03 September 2024, Mumbai

India’s affordable fashion market is witnessing a high-stakes battle between two of the country's largest conglomerates - Tata Group’s Trent and Reliance Industries. Zudio, Trent's homegrown fast-fashion brand, has experienced explosive growth, captivating young consumers with its blend of trendy clothing and budget-friendly prices. Its store count has skyrocketed from 80 to nearly 560 in just four years, propelling Trent's sales to triple their pre-pandemic levels.

However, Reliance, despite its vast resources and recent $2 billion investment in its retail arm, has struggled to keep pace. Its in-house brand, Yousta, launched to rival Zudio, has yet to make a significant dent in the market. This has spurred Ambani to enlist the help of Chinese fast-fashion giant Shein, which is making a strategic comeback to India after a previous ban.

High stakes battle

For Reliance, success in the affordable fashion market is crucial as it prepares for a potential IPO of its retail unit. Ambani is keen on handing over a thriving business to his daughter, Isha Ambani, who is expected to lead the retail division.

On the other hand, Noel Tata, who heads Trent, the retail arm of Tata Group, is also looking to solidify his position within the group. The success of Zudio and other private labels within the Tata retail ecosystem could be instrumental in his bid to join the board of the holding company.

The Shein factor

In fact, the potential re-entry of Shein, with its massive popularity among Indian teenagers, could be a game-changer for Reliance. Shein is known for its online-only model and vast selection of affordable clothing, the partnership could leverage Shein's brand appeal and Reliance's vast retail network, creating a formidable challenge for Zudio.

The clash between Tata's Zudio and Reliance's Shein-backed venture promises an exciting battle in the Indian affordable fashion landscape. Both conglomerates are vying for a larger share of the rapidly growing market, and their strategies and moves will be closely watched by industry observers and consumers alike. For Ambani, success in the fast-fashion arena is crucial for a successful IPO of Reliance Retail, a key component of his succession plan. Meanwhile, Noel Tata, who spearheaded Trent's impressive growth, aims to solidify his position within the Tata Group.

Ultimately, the winner of this battle will be the Indian consumer, who will have more choices and better value in the affordable fashion segment.

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