Value Fashion Retail | Growth through inroads into BHARAT
Given the emergence of the neo-middle class and the growing value fashion segment seeing a sustainable momentum, marketers re-prioritizing the market segmentation in the fashion retail sector in India and, a secular demand for recovery anticipation that will rise by 15 percent in FY2025, as per the recent ICRA report is only a testament.
The elephant in the room is India's Retail Sector Faces Acute RSPC Shortage.
After nearly two years of slowdown, the resurgence marked by increased activity, in the segment has started to see tailwinds triggering the uptick in growth trajectory around the value fashion segment in India coupled with average sales per sq ft surpassing pre-COVID levels for the first time in Q1 FY2025 is a big positive giving a headroom to growth for large corporations and other stakeholders either enter the market or expand their presence meaningfully making what they are best at and ticks most of the boxes.
Datapoint; Throwing some numbers to add context to all this given the market dynamics, in contrast average sales per sq ft in the premium fashion segment shrunk by 3 percent in FY2024 and Q1 FY2025, but the happy news is that the value segment well-thrived, surpassing/overtaking pre-covid figures comfortably.
It has to be stated here, Tata Group Trent continues to be in an uptrend especially since growth has got many legs since Zudio's story has played itself out handsomely given that revenues of Trent Retail, rose by 56 percent during Q1 FY25, along with a substantial profit rise of 126.3 percent. Zudio opened 200 odd new stores across 46 new cities, bringing its total to a staggering 545 locations widening and deepening its footprints Pan-India.
Snapshot: Taking the middle path
Doubling down; To everyone's surprise, especially coming to the realization that all these players are deep pockets and so well funded and, have thrown their hats in the ring given a solid demand tailwind which hopefully will keep increasing the size of this pie, and opportunity.
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By the way, the jury is out on whether will this diversification cannibalize the interests of the mid-premium store chains these groups/parent retail chains are hitherto running successfully; so be it as long as this segment offers a long-run and visibility to these groups. The underlying objective visibly is to keep increasing the market & customer wallet share as the mass premium/premium segment itself cannot satisfy the demand and needs of emerging BHARAT leading the transition of the industry.
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With a barrage of recent launches either taking place or around the corner e.g. Zudio currently a darling to Indian consumers is now a formidable competitor to already established 'Landmark Group’s Max'.
Again, responding evitably not losing sight of how the retail future is unfolding in the shifting market trends, Shoppers Stop too has launched its new value format, InTune, in the mass premium segment, planning to open 60 odd new stores in FY25 itself.
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Meanwhile, mighty Reliance Retail’s value fashion brand 'Yousta' is negotiating with bunch of global brands/retailers to potentially launch in India setting volume targets before them and leading to collateral benefits to this entire burgeoning trade segment, as the broad fact is that this all this is to overcome the business cycle vagaries for a sustainable enterprise model given where India sits in the global economy today which is likely to change the game.