Zudio Business Model: How Is It Disrupting Indian Fashion At Scale?

Conglomerates are known for expanding their arms to every segment of the market ranging from food, apparel, to electronics. Similar is the case with Tata. “Trent,” a Tata Group company, launched a fashion brand named “Zudio” that focused on affordable clothing, shoes, and accessories. Now, it has become a household brand and massively upscaled Indian Fashion. How? You may ask. The secret is –the Zudio Business Model.

Not only is it cost-efficient but also effective to suit the taste of the majority of Indian customers. Eventually, it became one of the most famous fashion brands in India, especially among youth. Its fame stems from its ability to offer affordable fashion that meets the needs of budget-conscious customers while staying fashionable and trendy. 

Now, let’s look into the detailed info on Zudio business model.

Zudio: A Brief Overview

It is a fashion brand focused on offering value-based fashion products for men, women, and children. It offers a wide range of products including western wear, ethnic wear, footwear, and so on. Before diving deep into Zudio Business Model, let’s have a brief overview of it.

Tata Trent opened its first 8,000 sq. ft. private label store Zudio in Bengaluru in September 2016. However, it belongs to Trent Limited which is a part of Tata Group. And the headquarters of Trent is present in Mumbai (Maharashtra). 

Working Strategy: How Does Zudio Work?

Zudio works by employing the following strategies-

1. Affordable Fashion

This is the key to Zudio’s success. Tata Group launched it to provide fashionable clothing at affordable prices. So, Zudio began targeting the mass market having budget-conscious consumers. As you know, the major chunk of the Indian population prefers pocket-friendly and comfortable apparel rather than luxurious brands. This was no less than a golden opportunity for Zudio to obtain a loyal user base. 

Now, here the question arises- “How does Zudio offer pocket-friendly apparel?” Does it compromise on quality? Surprisingly, it doesn’t! Zudio managed to keep its product prices by adopting various cost-saving strategies. Such as-

• Supply Chain Management
• Bulk Purchasing
• Minimizing the overhead costs

Apart from that, Zudio also offers appealing discounts and appealing offers that attract customers who look for better deals. These discounts act as the cherry on the cake in terms of affordability. Zudio’s clothing price doesn’t exceed Rs.1,500. Thus, Zudio became synonymous with “affordable fashion.”

2. Product Diversification

The clothing industry has a vast categorization. And in India, the categories of clothing are highly diversified including ethnic, western, and indo-western. By offering a wide variety of products, Zudio aims to cater to different customer preferences and increase repeat visits.

The products of Zudio include-

• Men
• Women
• Kids
• Ethnic
• Loungewear
• Footwear

The more diversified your products are, the more customers you will get! That’s why Zudio has intensely diversified its clothing and accessories.

3. Expertise from Tata Group

Do you know how Zudio functions seamlessly? By getting help from its parent company i.e. Tata Group. See, every company begins from scratch and to become successful it needs funding. You must have seen how numerous Indian startups are tackling the funding winter. But that’s not the case with the sub-branches of conglomerates. Why? You may ask. Because they have sufficient funds to run their subsidiary companies.

Like Tira, a cosmetic brand of Reliance, Zudio also got famous due to the brand value of its parent company. As part of the Tata Group conglomerate, Zudio leverages the group’s resources, expertise, and supply chain. This helps it to streamline operations and enhance cost-effectiveness.

4. Strong Retail Presence & Digital Presence

Zudio maintains an extensive retail network with stores located strategically in shopping malls, high streets, and retail hubs across India. This approach ensures a widespread presence and enhances accessibility for potential customers. In FY23, Zudio opened 117 stores in India. Thus, the total number of Zudio’s retail stores increased to 352. That’s not all! In FY24, Zudio is planning to open 200 new stores in India.

In addition to physical stores, Zudio has an online presence through its website and e-commerce platforms. An online presence can attract a broader customer base, including those who prefer to shop online. Thus, this strategy is helpful to expand its user base. 

5. Fashion Trend Monitoring

Imagine a scenario where you provide affordable clothing along with a reputed brand value. But if you don’t upgrade your products as per the current fashion trends, can you survive in the market? Obviously not!

That’s why to stay relevant in the fast-paced fashion industry, Zudio upgrades itself regularly. How? By keeping a close eye on current fashion trends and consumer preferences. This allows the company to swiftly adapt its product offerings as per the trend and maintain a fashionable image.

6. Customer Engagement

Do you know what sets apart Zudio from its competitors apart from its affordability? Its appreciable customer care services. Zudio places importance on creating a positive customer experience. This includes providing excellent customer service, easy return policies, and engaging with customers through various channels. It includes social media and loyalty programs too!

Revenue Sources: How does Zudio earn money?

How will you determine if a business is successful or not? Through its revenue sources! If the income of a company is good enough then it indicates that its business model is successful. The same principle goes for the Zudio business model. Being a D2C company, its prime source of revenue is through the direct sales of its products. 

It includes the following-

1. Retail Sales

Zudio operates an extensive network of brick-and-mortar stores across India. The majority of its revenue comes from the sale of clothing, accessories, and footwear through these physical stores. The company’s stores are strategically located in shopping malls, high streets, and retail hubs, making its products easily accessible to a wide customer base.

2. Online Sales

As you have read above, Zudio has an online presence through its website apart from its physical stores. Online sales provide an additional revenue stream for the company. It caters the customers who prefer to shop online or those located in areas where physical stores are not present.

3. Seasonal Collections and Offers

Zudio has special seasonal collections and promotional offers during festive seasons. The festive season in India is the golden sale period. This strategy is effective to attract more customers and boost revenue during specific periods.

Marketing Strategies: How Zudio conquered the Indian fashion market?

Zudio’s impactful supply chain and affordable pricing heavily contributed to word-of-mouth marketing. But to acquire new customers and expand the user-base, it used the following marketing strategies-

1. Affordable Pricing Campaigns

Zudio’s primary value proposition is offering trendy fashion at affordable prices. To emphasize this, it runs marketing campaigns centered on its budget-friendly pricing. It highlights the fact that customers can enjoy affordable fashion without compromising on style.

2. Promoting the latest Fashion Trends

Staying updated with the latest fashion trends is the key strategy for Zudio’s success. To showcase its latest fashionable products, Zudio utilized diverse marketing channels. Such as social media, advertisements, and in-store displays. Thus, it keeps customers informed about the latest trends.

3. Visual Merchandising in Retail Stores

Recall a scenario when you go to the clothing market and you enter the shops just by seeing the mannequins. Have you wondered why? Because those mannequins are the backbone of visual merchandising. They are the silent salespeople in retail stores. Visual merchandising aims to attract and motivate customers to make a purchase.

That’s why, Zudio’s brick-and-mortar stores have employed various eye-catching visual merchandising displays. Why? To attract shoppers and appealingly showcase the products. The store layout and design are optimized to encourage exploration and increase sales.

4. Digital Marketing

In the current era, digital marketing is the kingpin of the marketing world. Even new startups also utilize digital marketing because it is cost-effective and efficient to attract customers. Seeing the success of digital marketing methods, Zudio also invested in a user-friendly website, online shopping platform, and social media channels to engage with customers, drive online sales, and promote its brand.

5. Seasonal Sales & Offers

Like every other apparel company, Zudio also runs promotional events, discounts, and special offers during the festive seasons. This is an effective strategy to attract customers who make purchases during specific periods. Some of the peak festive seasons for massive sales are Diwali, Navratri, New Year, etc.

6. Customer Loyalty Programs

To retain customers and encourage repeat purchases, Zudio may have implemented a customer loyalty program. Such programs often offer rewards, discounts, or exclusive offers to incentivize continued patronage.

One such example is Zudio Gift Cards powered by Qwikcilver. These were available in both physical and digital variants. 

Conclusion

Zudio business model reveal essential insights into its approach to market positioning, revenue generation, and customer engagement. Through analysis, we can deduce their target audience, pricing strategy, and potential competitive advantages.

It is a successful business model because it involves a mix of retail and e-commerce that emphasizes affordable yet trendy clothing. The efficient supply chain management and the use of effective marketing strategies helped it to gain a loyal consumer base.

Don’t you wonder why Tata’s company Trent launched Zudio? Because companies are associating brands with a specified price range. The companies are creating new labels and branches instead of pulling down the existing selling price of existing brands. 

Furthermore, the Zudio business model showcases efforts to build brand loyalty, expand their market reach, and stay ahead of industry trends, ultimately contributing to their overall success in the fashion retail sector.