Tata’s Zudio was launched in 2016, and — by the end of 2023 — its revenues were “estimated to be in excess of ₹4,000 crore”, reported Rediff earlier this month. How did the affordable fashion brand become a big success story in 7 years? Well, a more simplistic explanation would be it tapped the right audience – if retail therapy is your addiction, but the degrading bank balance, a buzz kill, Zudio perfectly falls in that bracket. 

Medium

But Parsh Kothari — co-founder and CEO of Think School, a start-up that aims to provide affordable business education — provided a more detailed explanation for this on X.

Like most big brands available out there, the unique thing about Zudio was that it wasn’t targeting top-tier markets. For that, Tata already had Westside as their premium fashion brand. Zudio was aimed at youngsters who are not as amused by the idea of spending 3000 bucks on a single shirt.

Kothari explained we Indians are evolving, possibly not at the same pace as our incomes are. Hence, we need fashionable trendy clothes but at economical prices. If you’ve ever visited Zudio, you’d know the brand hosts shoes worth ₹300, trousers worth ₹400, and literally all of their collection is priced at less than ₹1000. I personally know of a friend who purchased rubber shoes from Zudio’s Kamla Nagar outlet, and he frequently wears them (with socks, of course) to the gym.

For the unversed, FOCO stands for Franchise Owned Company Operated business model, which has two parties – the franchisor and franchisee. The franchisors are the enterprise owners who lend their goodwill and trademarks. In contrast, the franchisee is the corporation that acquires the right to establish the franchised business in exchange for a particular fee and runs everyday operations while maintaining quality standards.

Because of this, the CAPEX, meaning the capital expenditure, for Tata was significantly reduced. Besides, since the brand stood for trust, the franchisee was bound to attract customers. And thus followed good word-of-mouth, the most powerful form of marketing.

Had not my friends talked about those shoes, I wouldn’t have tagged along with him to the Kamla Nagar store or, later, visited the Karol Bagh store on my own the next time.

You can read Parsh Kothari’s complete informative thread here.

Zudio keeps diversifying its inventory, offering value for money to customers without compromising on their quality per se. Basically, fashion but affordable – a dream for Gen Z students.