Noel Tata’s Trent has launched a new standalone format, Zudio Beauty. With this, they’re expanding their retail presence to compete with major players in India’s mass-market beauty segment, such as Hindustan Unilever’s Elle18, Sugar Cosmetics, Health & Glow, and Colorbar.
“The new concept store is part of its strategy to tap into the affordable beauty space as most of the rivals from Reliance, Nykaa and Shoppers Stop are focussing on premium and luxury categories. The first store has opened in Bengaluru and Trent is planning to add more outlets in top cities, including Gurugram, Pune and Hyderabad.” ” said executives aware of the development.
Tata is the founder of India’s first beauty brand, Lakmé (later sold to HUL). The brand is already present in the beauty segment with its high-end cosmetics store, Tata Cliq Palette. Now, with the launch of Zudio Beauty, the company is ready to tap into the mass-priced beauty market. Zudio has become one of the largest apparel brands in India since its inception in FY17. Its success is due to an exclusive design portfolio and a low gross margin of 35-40%. This enables high store productivity, boasting revenue of ₹16,300 per sq ft—double the industry average.
Carved out as a standalone format in FY18, Zudio now contributes over a third of Trent’s total revenue. This is a significant jump from 8% a few years ago. It has rapidly expanded, surpassing Westside in both store count by FY22 and revenue by FY24. As of June 2024, Trent operates 559 Zudio stores, 228 Westside stores, and 36 stores across other lifestyle concepts. Despite strong competition in the value retailing segment, Zudio has outperformed many players in terms of revenue and store count. Analysts predict a similar trajectory for Zudio Beauty in the mass-market beauty segment.
“This is another disruptive move by Trent after being so successful in value apparel. And this could be the next potential success if their quality is liked by consumers,” said Abneesh Roy, executive director, Nuvama. “Other competitions in this space are largely similar to Nykaa and it is potentially negative for them and other fast-moving consumer goods players.”
This year, global cosmetics giants L’Oreal SA and Shiseido identified India as one of their key growth markets. This is due to the country’s expanding population and increasing demand for beauty products. L’Oreal revealed that India has already become its fifth-largest market in the professional products division. This primarily caters to salons. Additionally, last year, Shoppers Stop partnered with Shiseido to introduce its premium beauty brand, Nars Cosmetics, to the Indian market.
Currently, dedicated beauty brands such as L’Oreal, Mama Earth, Nivea, and Nykaa hold a 33% market share. This is likely to further grow to 42% over the next five years. Meanwhile, established companies like HUL and Procter & Gamble, which currently dominate two-thirds of the market, might see their share decline by 900 basis points, falling to 58% by 2027, according to a joint report by Redseer Strategy Consultants and Peak XV.