Inside TATA's ₹12,000 Cr Fashion Empire😳
One secret company behind 3 brands: Zara, Westside, Zudio.
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Now, TATA’s Trent Magic 💫
A company that’s not famous by its own name but is behind 3 of the biggest fashion brands in India — Zudio, Westside, and Zara. Today, we’ll dive into Trent Limited — a fashion masterstroke by the Tata Group that’s given its investors an insane 2000% return in just 5 years.
But first, what’s cooking in this space?
If the Coldplay frenzy taught us anything, it’s that Indians are loving aspirational purchases. With rising per capita incomes in country —Tier 2 and Tier 3 towns are also part of the wave. The average online spend in Tier 2 cities, at ₹20,100, is nearly catching up with Tier 1, where buyers spend ₹21,700. Plus, the retail market is seeing a great transition to get organised
What did Trent crack then?
The house of brand insight.
Trent started Westside in 1998. But it realized one crucial insight: they can’t make Westside the Maruti Suzuki of fashion. Why?
Because Westside’s average selling price of ₹1,500 wasn’t enough to capture either the premium segment (where higher prices mean better margins) or the Tier 2 and Tier 3 markets, where lower prices dominate.
Formed a JV for Zara in 2010.
Launched Zudio in 2016.
If Trent had introduced Zudio-like products (lower in quality) in Westside, it would have confused customers about the aspirational level of the brand and destroyed trust. Positioning is the secret sauce that kept all brands succeeding.
The insight of scale.
Scaling is one of the hardest parts of any Indian business. However, Trent has cracked two things perfectly in scaling Zudio and Westside: location strategy and retail model.
Location: Entering Tier 2 & 3 areas with Zudio, expanding the retail surface area. Btw, Zudio now has 2X stores as compared to Westside. (545 vs 232)
Store Model: Using a FOCO (franchise-owned company operated) model for Zudio, where franchise partners pay the lease, own the store, and receive a revenue share of ~16%.
The loop is simple: Go Asset Light → Scale Fast → Optimise Better Financials.
The execution masterstroke.
Zudio & Westside have a revenue per square foot of ₹18,000 and ₹12,000—both higher than the industry average of ₹10,000 per square foot. But how are they achieving this?
The answer is in these 3 areas:
Fast Fashion: Tata’s partnership with Zara taught them fast fashion – A model releasing new collections biweekly basis to stay trendy throughout the year.
Private labeling: This ensurs that customers come to Westside and Zudio for a unique brand experience rather than browsing multiple brands, unlike other retailers inc. Shoppers Stop or Pantaloons. This increases margins and opens doors to create in-house brands under Westside and Zudio.
Upselling: Bring people for clothes but upsell them other stuff like perfumes, wallets, belts, shoes and even yearly memberships.
Btw, we have covered Trent in-depth in the latest episode of GrowthX Wireframe.
I’ll see you this Sunday.
It is new information to know about zudio was also a part of tata group.