Mukesh Ambani vs Noel Tata: India’s Fashion Retail Battle Heats Up - Read Now
The Indian retail sector is witnessing an intense rivalry between two retail giants: Mukesh Ambani-led Reliance and Noel Tata-led Tata Group. Both are competing fiercely in India’s value fashion segment, with their brands Yousta and Zudio vying for dominance in this rapidly growing market.
Mukesh Ambani’s Yousta Takes On Zudio
In August 2023, Reliance Retail unveiled Yousta, a new brand designed to compete directly with Tata Group’s Zudio. The value fashion market, known for stylish yet affordable clothing, is one of India’s fastest-growing segments in the apparel industry. Yousta’s products are priced below ₹999, with most items retailing under ₹499, a strategy similar to Zudio’s. In just its first year, Yousta has already expanded to 50 stores, signaling Reliance’s commitment to capturing a substantial share of the market.
Zudio’s Success in the Fashion Market
Zudio, launched in FY17 and established as a standalone brand in FY18, has become one of India’s leading apparel brands. Under the leadership of Noel Tata and Trent, Zudio has transformed into the company’s fastest-growing format. By FY22, Zudio had already surpassed Westside in store count and revenue, contributing ₹7,000 crore to Trent’s total earnings in FY24—more than a third of its total revenue.
Zudio has managed to crack the formula for success by combining exclusive designs, low pricing, and high productivity. The brand operates with a gross margin of 35-40% and generates revenue per square foot of ₹16,300—twice the industry average. This success has enabled Zudio to cater to the increasing demand for fashionable yet affordable options, particularly in India’s smaller towns, backed by Tata’s reputation for quality.
Reliance’s Strategy with Yousta
Despite Zudio’s success, Reliance is determined to carve out its own space in the value fashion market with Yousta. In Q2 FY24, Reliance Retail saw a 1.1% year-on-year decline in gross revenue, which made it essential for the company to innovate in the fashion and lifestyle segment. Reliance invested ₹14,839 crore into its retail division last fiscal year, signaling its long-term commitment to the market.
Yousta’s strategy includes launching new collections every week, offering unisex designs, and incorporating character merchandise to appeal to a wide audience. Like Zudio, Yousta focuses on frequent inventory refreshes, low pricing, and cost-efficient franchise models to drive growth. Reliance aims to replicate Zudio’s success and strengthen its position in the competitive fashion retail space.
Benefits to Indian Consumers
The rivalry between Mukesh Ambani’s Yousta and Noel Tata’s Zudio is set to have significant benefits for Indian consumers. As both brands vie for a larger share of the value fashion market, consumers can expect to see better designs, improved affordability, and enhanced accessibility to these brands across Indian cities and towns. The increased competition will likely lead to better-quality products at more competitive prices, offering more choices for fashion-conscious buyers.