Zudio: Disrupting the Affordable Fashion Space in India

Case Code: BSTR695 Case Length: 13 Pages Period: - Pub Date: 2025 Teaching Note: Available

Price: Rs.300 Organization : Trent Ltd Industry : Textiles & Apparel Countries : India Themes: Disruption, Growth Strategy Brand Differentiation,Competitive Strategy

Abstract Case Intro 1 Case Intro 2 Excerpts

Excerpts

Business Model

Zudio operated on a unique Franchise Owned, Company Operated (FOCO) model. The franchisees bore the initial investment costs and Trent, the company that owned Zudio, managed the day-to-day operations, allowing the brand to scale rapidly. In this model, Zudio partnered with franchisees who invested in building and setting up stores, typically by incurring a cost of between Rs.15 million and Rs.20 million for a 6,000 sq ft store. When the store was ready, Zudio took over the operation and management, while the franchisee was offered a percentage of the revenue. The franchisee invested in setting up the store, covering logistics and assets like land, devices, and interior infrastructure. Meanwhile, Zudio took care of inventory management, supply chain, staffing, and marketing. This model allowed Zudio to scale quickly without having to incur the heavy capital expenditure. The model attracted potential investors with a 16% revenue share and RoI achievable in about three years..

Secret of Success

A major unique selling point of Zudio was its pricing strategy. Products were generally priced between Rs.29 and Rs.1,500. T-shirts were priced as low as Rs. 299 and denims were available for less than Rs.999. Accessories were sold at pocket-friendly prices. This strategic pricing not only attracted budget-conscious consumers, but also built an elevated customer experience. It showed that affordable fashion delivered higher practical utility by offering more value per wear. For instance, a Zudio shirt bought at Rs.400 might be worn around 20 times annually, while a shirt that was bought at a premium store such as Zara priced at Rs.2,000 could be worn only 8 times..

Results

The number of Zudio stores grew from just 7 in 2018 to 233 by 2022, with the company planning to add 100 stores every year. For FY19, Zudio’s store count stood at 40. Its annual revenues for the same period were Rs.2.04 billion – a 41.6% increase from the Rs.1.44 billion posted a year earlier. In FY20 and FY21, Zudio’s store count increased twice, and it posted a massive jump in annual revenues to Rs.5 billion and Rs.4.8 billion respectively despite the pandemic..

Challenges Ahead

Zudio redefined the fashion retail landscape in India within a short span of time and established itself as one of the leading fast fashion retailers in the country. However, going forward, the fashion brand could face some challenges including intense competition in the fast-fashion space, relatively thin profit margins, building a loyal customer base, the complexity of managing multiple store locations, perception as a low-cost brand, expansion into e-commerce, and ensuring long-term sustainable growth..

Exhibits

Exhibit I: Trent’s Brands: Penetration in India and Store Count (as of March 2025)
Exhibit II: Zudio’s Product Line
Exhibit III: Value Fashion Retailers– Prices across Apparel Categories
Exhibit IV: Zudio Store Count (2018-2025)
Exhibit V: Zudio’s Annual Revenues Between 2014 and 2024
Exhibit VI: Zudio Vis-a vis Competitors (as of 2024)

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