The Tata Group, led by Noel Tata, has made a significant move into India’s mass-market beauty sector by launching its new retail format, Zudio Beauty. This initiative, reported by The Economic Times, aims to compete with established brands like Hindustan Unilever’s Elle18, Sugar Cosmetics, Health & Glow, and Colorbar, catering to a wider audience in search of affordable beauty solutions.
Targeting Mass-Market Demand
Zudio Beauty distinguishes itself from major competitors like Reliance, Nykaa, and Shoppers Stop, which mainly focus on premium and luxury segments. By targeting the growing demand for budget-friendly beauty products, Zudio Beauty opened its first store in Bengaluru, with plans to expand into cities such as Gurugram, Pune, and Hyderabad.
Tata’s Legacy in Beauty
The Tata Group has a rich history in the beauty industry, having founded India’s first beauty brand, Lakme, which was later sold to Hindustan Unilever. Their continued involvement in beauty retail includes Tata Cliq Palette, a premium cosmetics platform. With Zudio Beauty, Tata aims to shake up the beauty market again by offering accessible options for the mass market.
Zudio’s Remarkable Growth
Trent’s well-known brand Zudio has experienced exceptional growth since its inception in FY17. Initially launched within Star stores, Zudio quickly expanded thanks to its unique designs and a low gross margin of 35-40%, which enhances store efficiency. The brand boasts a revenue per square foot of Rs 16,300, double the industry average. By FY24, Zudio had not only surpassed Westside in store count but also in revenue.
Currently, Zudio operates 559 stores across India, outpacing several competitors in the value retail space. This success has provided a robust foundation for Trent to replicate its successful retail model in the beauty sector.
The Growing Beauty Market in India
India is becoming an increasingly appealing market for global beauty brands like L’Oréal and Shiseido. L’Oréal has identified India as its fifth-largest market for professional products, while Shiseido has collaborated with Shoppers Stop to introduce its premium Nars Cosmetics brand in the country. According to a report by Redseer Strategy Consultants and Peak XV, specialised beauty brands like L’Oréal, Mama Earth, Nivea, and Nykaa, currently holding a 33% market share, are projected to grow to 42% in the next five years. Conversely, traditional players such as Hindustan Unilever and Procter & Gamble are anticipated to see their market share decline by 900 basis points to 58% by 2027.
