India’s fashion market is worth $50 Billion 🤯
Zudio has cracked the code to this industry 💯
Here’s how they’re beating existing fashion giants 👇
Context 🎯
Zudio has been a silent killer in India’s fashion market. Rising slowly to take away market share from giants like Westside, Reliance, Max, and Pantaloons. This is what they have gotten right ⬇️
Pricing 💰
Zudio has a clear acquisition hook. Everything under ₹999. This works perfectly well for their core users: college students & tier 2/3 city folks. The core insight was that they won’t wrack brains on quality – they just want trendy clothes at low prices – labels don’t matter.
Private labeling 👕
Zudio took a page from its sister company – Westside. Private labeling maximizes profit margins, as commissions for other brands are eliminated. But this also allows them to reap the benefits of fast fashion. With their private label, they churn out fresh inventory every 2 weeks. This keeps them relevant in pop culture and is a primary footfall driver for their stores.
Inventory Obsession 📦
What’s one core thing you need to succeed in India’s fast fashion retail? Inventory management. And Zudio cracked this with 2 steps:
1️⃣ Inventory turnover every two months:
With fast fashion as the core offering, Zudio has the highest turnover ratio among competitors – at 160%. Evert Zudio store practically becomes new every 2 months.
2️⃣ Clear focus on collections:
Zudio stays away from seasonal clothing like winter wear. This is conscious decision-making at its best. Seasonal inventory can only be sold for a limited period & have massive risks of sales failure.
Operational Efficiency ⚙
Unlike Zara & H&M, Zudio avoids major marketing spends and optimizes for store locations. Check the 10 Zudio stores in Mumbai. None of them are in the central/southern parts. This avoids expensive real estate and helps them focus on their ICP which are tier 2/3 folks. These locations have low competition & moderate rentals which boost their lean cost structure.
No E-Commerce ❌
Zudio took a clear call early on: to not take the e-commerce route. They wanted to avoid the costs associated with delivery and the high rate of returns in the e-commerce world. Instead:
1️⃣ Pointed focus on physical store-led growth:
Establishing 352 stores in 119 cities in 7 years. To give you an idea, Westside took 6 years to open 100 stores.
2️⃣ Adopting a FOCO model:
Unlike the industry standard FOFO model, Zudio’s FOCO model allowed it to achieve God-level speed. Franchisees earning a fixed revenue share while Zudio retaining profits played in their favor.
But that’s not the end of the Zudio story ✨
