India’s value fashion segment sees tough competition with growing incomes, higher aspirations

22 November 2023, Mumbai

Increasing incomes and burgeoning consumer aspirations in small town India have intensified competition in the value fashion market. As this segment gains traction, well-known retailers are facing tough competition. A notable case in point is Zudio, the flagship brand of Trent.

Since its establishment in FY’17, Zudio has expanded its footprint to over 350 standalone stores, generating impressive revenues worth Rs 3,540 crore. The brand has adopted a franchise-owned company-operated model, effectively managing all inventory costs. The success of this approach has attracted several national retailers, including Yousta (Reliance Retail), Style-Up (ABFRL), and InTune (Shoppers Stop), to adopt a similar model.

Multiple data-points

As market analysts from Motilal Oswal Financial Services point out, the value fashion segment is expected to maintain a steady growth of 6 per cent Compound Annual Growth Rate (CAGR) from 2020 to 2026.

However, factors such as rising disposable income and consumer-friendly demographic trends are expected to drive future growth at an impressive 23 per cent CAGR. While the value-fashion segment is dominated by unorganized retailers who make up almost 57 per cent of the overall market, regional retailers are yet to make a significant impact in this segment.

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