Tata Group enters mass beauty market with 'Zudio Beauty' store launch

Zudio Beauty aims to tap into the rising demand for affordable beauty products, whereas competitors like Reliance, Nykaa, and Shoppers Stop focus on premium and luxury categories

Noel Tata-led Trent has introduced a new retail format called ‘Zudio Beauty’, making its debut in the mass-market beauty segment. This new venture is set to compete with brands such as Hindustan Unilever’s Elle18, Sugar Cosmetics, Health & Glow, and Colorbar, according to The Economic Times.

Zudio Beauty is positioned to tap into the growing demand for affordable beauty products, a segment where other competitors like Reliance, Nykaa, and Shoppers Stop focus more on premium and luxury categories. Industry sources reveal that the first Zudio Beauty store has opened in Bengaluru, with plans for expansion to major cities like Gurugram, Pune, and Hyderabad.

Tata, who pioneered India’s first beauty brand Lakme, which was later sold to Hindustan Unilever, already has a foothold in the beauty industry with Tata Cliq Palette, a premium cosmetics store format.

Zudio, Trent’s affordable apparel brand, has witnessed significant success since its launch in FY17. Initially introduced within Star stores, Zudio has grown swiftly, benefiting from its exclusive design offerings and a low gross margin of 35-40 per cent, leading to high store efficiency. The brand’s revenue per square foot is Rs 16,300, twice the industry average. Zudio was spun off into a separate format in FY18 and now contributes to over one-third of Trent’s total revenue. By FY22, Zudio had surpassed Westside in store-count and exceeded it in revenue by FY24.

With 559 Zudio stores across the country as of June, and further expansions in progress, the brand has outpaced many of its competitors in the value retail segment. Industry experts expect Trent to replicate this success in the beauty sector.

Abneesh Roy, executive director at Nuvama, commented, “This is another disruptive move by Trent, following its success in value apparel. If the quality resonates with consumers, this could be their next big win.”

He said competitors in the beauty space, particularly those similar to Nykaa, could face challenges, with the move potentially affecting fast-moving consumer goods players as well.

Global giants like L’Oreal and Shiseido see India as a key growth market. L’Oreal has already identified India as its fifth-largest market for professional products, while Shiseido has partnered with Shoppers Stop to introduce its premium Nars Cosmetics brand to the Indian market.

A report by Redseer Strategy Consultants and Peak XV predicts that specialised beauty brands such as L’Oreal, Mama Earth, Nivea, and Nykaa, which currently hold a 33 per cent market share, are expected to grow to 42 per cent over the next five years. Conversely, traditional players like Hindustan Unilever and Procter & Gamble may see their combined market share decline by 900 basis points to 58 per cent by 2027.

Despite the current number of Zudio stores exceeding 550, analysts at Citi Research believe there is significant scope for growth, with further expansion into the beauty segment anticipated.