P Venkatesalu, Chief Executive Officer and Executive Director at Trent Ltd. on keeping Zudio nimble and the need to innovate to stay relevant
Value retail chain Zudio sells about 90 T-shirts every minute and 20 pairs of jeans every hour… such is the popularity of the brand in the country, known for its value-consciousness.
Within a short span of a decade, Zudio has grown into a Rs 7,000 crore plus annual business, becoming one of the biggest value fashion and lifestyle success stories. In the fiscal year 2024, Zudio opened more than 200 stores sized about 10,000 sq. ft., with Trent Ltd shelling out about Rs 3-4 crore per outlet on average.
P Venkatesalu, Chief Executive Officer and Executive Director at Trent Ltd. speaks to IndiaRetailing about keeping Zudio nimble in terms of backend and its expenses; Zudio’s constant need to change and innovate to stay relevant and thrive among other things.
Edited excerpts:
What is the secret sauce behind Zudio’s success? How are you able to keep the price down?
I do not think the prices are what people think they are. The reason is we do not discount. If you think about it, the prices are a bit of a premium over what you get if somebody does the math. The reality is you want to leverage the platform and keep the whole thing efficient, so you do not spend a lot of money. For instance, we do not advertise.
If you look at our annual reports and commentaries, not much has changed in 10 years in terms of commentary. We continue to do the same thing over and over again. We will not do stuff that adds to the cost thereby keeping ourselves efficient. We keep it simple. And that is baked into the culture of the business.
I do 10 things and I have made three mistakes. Learn first, look at those mistakes, understand mistakes happen, and try not to repeat them. That’s been the theme. Also, such businesses are not built in one or two years.
Was Westside an inspiration for you to start Zudio?
If not for Westside, Zudio would not have existed. We do not think of them as separate businesses; they are completely integrated at the back. We think of them as separate brands that manifest themselves as separate for the customers. For instance, what is the difference between the IT systems for Zudio and Westside? They are exactly the same. What is the difference between the supply chain, the logistics, the warehousing, processing of it all? Everything is the same. Finance, accounts, administration…. everything is same.
However, we are putting a different brand name for the customer and saying, this is what I want to stand for you. And as long as the customer perceives it to be different, they are different.
Is Zudio already bigger than Westside in terms of business?
Zudio has far more stores. Westside has a far bigger footprint. There are 100 things to fix. But at the end of the day, it is still a good business model. The same thing is true for Zudio. The reality is it is easier to open more Zudio stores with its store size of 6,000 sq. ft. -10,000 sq. ft. than opening a 20,000-30,000 sq. ft. Westside.
In Zudio, we cannot take the complexity of doing online, whereas Westside is far more exciting to be able to do online also.
Why not sell Zudio online on marketplaces?
It is just more complexity… That is the way we think about it. And it is a matter of choice and not like we do not think online is interesting. And anyway, we have more presence offline with 550 Zudio stores.
I do not think we have all the answers. But I do think trying to build a single base of costs, which you leverage for multiple brands, which have some reasonable scale from a customer standpoint, does work sensibly.
So where do you save money to offer products at particular price points to the consumer?
I know almost everyone in the market does Rs 199 kind of T-shirts.
Then why you are getting the kind of hype or kind of attention?
The fact is we have learned and made mistakes and stayed with the same things over 10-20 years. When you consistently deliver an outcome for customers, which they can predict, then it resonates better with them. It is like a bet, at least that is a bet that we have taken. It is like exercising every day. You exercise every day for the next three years, I turn around and look at you and say, oh, my God, I need to look like you. It is not going to be possible in two weeks.
Zudio started as apparel inside Star Bazaar. At some point, it was named Zudio. Later we tried to open a few stores. It has been 10 years since then. So, this is not a baby that was born two years back. Also, Zudio of three years back is not the Zudio of today. And the Zudio of two years from now should be very different from what we know today.
So what kind of potential do you see for Zudio in future?
To be frank, I don’t know… It is roti kapada makan, and at least we are in the kapada space. And the reality is I don’t think we have a market share of even one and a half per cent with both Westside and Zudio put together. The canvas is large, the opportunity is huge. And there is enough space for numerous successful brands, not just from the company, but from multiple companies. That’s the way we think about it.
We should just focus on saying: How do we build a playbook that we can execute, which is relevant? And there will be other playbooks, which other people will execute. There is enough of a big market. Look at Jio…Amazing business.
Would you take Zudio outside India?
Maybe. But India itself is so big. It is so easy to get distracted by doing a lot of things. One of the choices is to not get distracted and stay with what you think is right. Because it is so easy to say everybody is going abroad, I go abroad, everybody is doing XYZ, I agree with that. Also, many times, the problem is one doesn’t have the skills to do it as an organization. And if we play games where other people are stronger, the chances of winning are quite low.
Although there is room for improvement with Zudio, is it working well for you, to an extent?
To an extent, yes. We need to build more with sight with Zudio, because there are so many things we get wrong and which we can see from the inside. My bet is two years from now, we will be far less relevant if we keep repeating what we are doing today. So, we have to change. And if we don’t change, we have a huge problem on our hands.
You sell various accessories in Zudio. Will there be any extension of Zudio in other areas?
We did not have many categories five years ago. As per our latest results, about 20% of our business now comes from emerging categories like beauty, footwear, and accessories, although it would be wrong to divide them like that. Today about 20% of revenues are from non-apparel. Is there an opportunity to make it more relevant for customers? Absolutely. Are we doing a good job with it today from our perspective? In many cases, no.
So, you have your yardsticks?
Absolutely. And we should turn around and challenge them because the customer is becoming more demanding, and she has many options. If we do not improve or change, the customer is going to simply move because she is going to vote with her money and with her feet. So, there is a lot of reason to be impatient and unhappy with what we already have in the portfolio and what we are doing.
