Tata Group Takes on Nykaa and HUL with Zudio Beauty: Noel Tata’s Bold Move Into India’s Mass Market

Tata Group’s retail arm, Trent, has introduced Zudio Beauty, a new store format aimed at the mass-priced beauty segment. This move puts Zudio Beauty in direct competition with brands like Elle18, Sugar Cosmetics, Health & Glow, and Colorbar.

Affordable Beauty Focus

While competitors like Reliance, Nykaa, and Shoppers Stop concentrate on premium and luxury products, Trent is targeting the affordable beauty space. The first Zudio Beauty store opened in Bengaluru, with plans for expansion in cities such as Gurugram, Pune, and Hyderabad.

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Zudio, which began as part of Star Bazaar, has seen remarkable growth since its inception in FY17. With a low gross margin of 35-40% and exclusive design offerings, Zudio has become one of India’s leading apparel brands, boasting a revenue per sq ft of ₹16,300, twice the industry average.

Standalone Format

In FY18, Zudio became a standalone format, contributing over a third of Trent’s revenue. The number of Zudio stores surpassed Westside in FY22 and its revenue in FY24, with the current count standing at 559 Zudio stores across India.

Zudio Beauty Positioned to Disrupt the Market

Industry experts see Zudio Beauty’s launch as a potential game-changer in the beauty industry, with Trent’s proven track record in affordable fashion giving it an edge. “If the quality resonates with consumers, Zudio Beauty could be a major success,” said Abneesh Roy of Nuvama.

Global Beauty Giants Eye India’s Booming Market

Global brands like L’Oreal and Shiseido have identified India as a key growth market, driven by a rising population and increasing interest in beauty products. L’Oreal’s professional products division now counts India as its fifth largest market, while Shiseido has partnered with Shoppers Stop to introduce premium beauty brand Nars to India.

Changing Market Dynamics

Specialized beauty brands currently hold a 33% market share, with predictions this could grow to 42% by 2027. Established players like HUL and Procter & Gamble may see their dominance shrink as new entrants like Zudio Beauty capture the mass-market segment.

Citi Research suggests that despite Zudio’s impressive store count of over 550, there is still plenty of room for growth. The brand has the potential to expand further, with ambitions of reaching 2,000 stores in the future.