The 12,000 Crore TATA Company You Didn't Know Of | Trent Business Case Study

Summary

The video explores how Trent Limited, a Tata Group company, has become a leading player in India's fashion retail sector. Trent owns major brands like Westside, Zudio, and has a joint venture with Zara. It leverages a 'house of brands' strategy to target different market segments with distinct pricing and positioning. Zudio, Westside, and Zara contribute over 90% of the company’s revenue, with Zudio seeing significant growth. Trent's success lies in scaling efficiently, using a fast-fashion approach, private labeling, and upselling strategies, making it a retail powerhouse in India.

Takeaways

• 🛍️ Trent Limited, a Tata Group company, operates three major fashion brands in India: Westside, Zudio, and Zara, contributing over 90% of the company’s revenue.
• 📈 Trent Limited has given its investors nearly 2,000% returns over the past 5 years and may soon become the largest fashion company in India.
• 🏢 Trent’s retail success is driven by its diversified approach, with Westside targeting the mid-market, Zara appealing to premium customers, and Zudio catering to lower-income segments.
• 🧥 Zudio, despite being a low-margin brand, has experienced exponential growth, now contributing more than 56% of Trent's revenue, surpassing Westside.
• 💡 Trent uses a 'House of Brands' strategy, positioning Westside, Zudio, and Zara to cater to different income groups and aspirations in India without diluting brand identities.
• 🏬 Trent has aggressively expanded its store presence, particularly Zudio, which grew from 44 stores in 2019 to 545 stores. Westside expanded to 232 stores.
• 🔄 Trent's scaling strategy includes using the FCO (Franchisee-owned, company-operated) model for Zudio to expand cost-effectively and increase profitability.
• 👗 Trent has adopted fast fashion practices, especially from its Zara partnership, bringing trendy clothes to customers quickly and efficiently, which has boosted sales.
• 🛍️ Westside and Zudio rely heavily on private labels, focusing on in-house brands to maximize margins and customer loyalty.
• 💳 Trent effectively upsells products and services, such as wallets, perfumes, and memberships, enhancing the overall store profitability and customer lifetime value.

Q & A

What companies does Trent Limited own or have partnerships with?

Trent Limited owns brands like Westside and Zudio and has a joint venture with Zara in India. They also run Star Stores for grocery retail and Booker for supplying groceries to hotels, restaurants, and small businesses.

How has Trent Limited achieved success in the Indian fashion market?

Trent Limited has succeeded by using a 'house of brands' strategy. They created different brands like Westside, Zara, and Zudio to target various segments of the Indian market based on income levels and aspirations. This allows them to capture a broader audience without diluting their brand identities.

Why did Trent Limited launch Zudio as a separate brand instead of offering similar products under Westside?

Trent launched Zudio as a separate brand to avoid confusing consumers. Zudio's products are priced lower and have slightly lower quality, which could have hurt Westside's reputation as a more premium brand.

What is Trent Limited’s strategy for expanding in tier 2 and tier 3 cities?

Trent Limited has been aggressively expanding Zudio stores in tier 2 and tier 3 cities to capture a larger share of the middle and lower income markets. Zudio's lower pricing and higher demand in these regions make it a key part of Trent’s growth strategy.

How does Trent Limited use private labeling and fast fashion to improve store efficiency?

Trent Limited employs a private label strategy, producing its own branded products instead of selling other brands' items. They also implement fast fashion principles, constantly refreshing their collections to meet rapidly changing customer trends, increasing both efficiency and customer interest.

How has the FCO (Franchisee Company Owned) model helped Trent scale its operations?

The FCO model allows Trent Limited to expand Zudio without heavy investment in store leases. Franchise partners own and lease the stores, while Trent handles operations, allowing the company to focus on running stores efficiently while saving on upfront costs.

What metrics does Trent Limited use to judge the success of its retail stores?

Trent Limited evaluates its stores using two key metrics: same-store sales growth and revenue per square foot. These metrics help track the efficiency and profitability of each store.

Why is Zudio the fastest-growing brand under Trent Limited?

Zudio has grown rapidly due to its lower price point, which appeals to a broader customer base in tier 2 and tier 3 cities. It now contributes over 56% of Trent's revenue, surpassing Westside in growth.

How does Trent Limited manage brand positioning for its different stores?

Trent Limited positions its brands—Zudio, Westside, and Zara—strategically in different locations to avoid overlap. For example, Zara stores are placed in premium sections, while Zudio targets non-premium areas. This segmentation helps each brand maintain its distinct market identity.

What role does customer upselling play in Trent Limited’s retail strategy?

Upselling is a key tactic used by Trent Limited, especially in Westside stores. Customers are often encouraged to buy additional products like perfumes, wallets, or even memberships, increasing the overall sales per customer.