Is Budget Fast Fashion Revolutionizing Small-Town India?

The rise of budget fashion brands like Zudio and Reliance Trends is transforming the shopping experience for Indian consumers, particularly in smaller towns like Sangli. With a focus on affordability, contemporary designs, and superior shopping environments, these brands are attracting a growing base of value-conscious consumers, contributing to a significant shift in India's organised fast-fashion market.

Last updated: 04 October 2023 (BST)

What’s happening now

In the bustling town of Sangli, the emergence of budget fashion brands has redefined the shopping landscape. Reliance Trends and Zudio, among others, are offering stylish apparel at competitive prices, making branded clothing accessible to consumers who previously shopped primarily at local bazaars. This trend reflects a broader shift in consumer spending patterns, with many opting for branded outlets over traditional mom-and-pop stores, despite a challenging economic backdrop characterised by stagnant wages and a sluggish job market.

Key takeaways

Budget fashion brands like Zudio and Reliance Trends are revolutionising shopping in smaller Indian towns.
These brands offer a contemporary shopping experience at prices comparable to local markets.
Consumer spending is shifting from local outlets to branded stores, driven by a desire for quality and style.

Timeline: how we got here

Over the last few years, the Indian fashion retail landscape has experienced a seismic shift, particularly with the rise of budget brands. Key milestones include:

2018: Zudio operates just seven stores, generating $12 million in revenue.
2019: Reliance Trends expands its offerings, attracting diverse consumer demographics.
2020: The onset of the pandemic leads to an increased focus on online shopping and budget brands.
2021: Zudio's rapid expansion brings its store count to 765, with projections of over $1 billion in revenue by mid-2025.
2023: Increased competition from e-commerce platforms and continued growth of budget fashion brands.

What’s new vs what’s known

New today/this week

Recent reports indicate that budget brands are significantly outperforming traditional fashion retailers, with Zudio's rapid expansion highlighting a shift in consumer preferences towards branded clothing. Moreover, the current economic climate, characterised by stagnant wages, has not deterred consumers from seeking out these brands.

What was already established

The trend towards affordable fashion in India has been evident for several years, with a growing middle-class demographic seeking quality apparel without exorbitant prices. Brands like Zara and H&M have long set the standard for fast fashion globally, but Indian brands are now adopting similar strategies to penetrate local markets effectively.

Impact for the UK

Consumers and households

For UK consumers, the Indian fast-fashion boom highlights a growing trend towards budget and accessible fashion, which could influence international retailers to adapt their strategies. As shoppers worldwide seek value without sacrificing style, this shift may prompt UK brands to rethink pricing and product offerings.

Businesses and jobs

The rapid growth of brands like Zudio and Reliance Trends presents both opportunities and challenges for businesses. While it creates new jobs in retail and supply chains, traditional retailers may struggle to compete, leading to job losses in the sector. UK businesses may need to innovate to retain market share as consumer preferences evolve.

Policy and regulation

As the fast-fashion sector grows, UK policymakers might consider regulations addressing sustainability and ethical production practices. The environmental impact of fast fashion is a pressing issue that could lead to increased scrutiny of manufacturing processes and waste management in the industry.

Numbers that matter

765: Number of Zudio stores as of 2023, up from just 7 in 2018.
$1 billion: Projected revenue for Zudio by mid-2025.
12% to 15%: Expected growth rate for India's apparel market in a robust year.
60%: Proportion of private consumption to India’s GDP, highlighting its significance in economic growth.
35-40%: Year-on-year growth rate of e-commerce platform Meesho.

Definitions and jargon buster

Fast Fashion: Affordable clothing that mirrors current fashion trends and is produced quickly to meet consumer demands.
Tier-2 and Tier-3 towns: Smaller cities in India with developing economies and consumer bases.
Wallet-shift: A change in consumer spending patterns, often moving from local shops to branded retailers.

How to think about the next steps

Near term (0–4 weeks)

Keep an eye on upcoming sales and promotions from budget fashion brands as they continue to attract consumers looking for value. Monitor any new store openings or expansions in smaller towns.

Medium term (1–6 months)

Watch for trends in consumer spending as brands adapt to evolving preferences. See how traditional retailers respond to the competitive landscape and whether they implement changes to their offerings.

Signals to watch

Revenue reports from Zudio and other budget brands.
Store openings and closures in the retail sector.
Consumer spending trends in apparel, particularly in smaller towns.

Practical guidance

Do

Research local and budget brands to compare quality and pricing.
Stay informed about sustainability initiatives within the fashion industry.
Track the latest trends and styles from both local and international sources.

Don’t

Overlook the impact of fast fashion on local businesses.
Assume that all budget brands compromise on quality.
Ignore the environmental implications of fast fashion.

Checklist

Assess your wardrobe for essential pieces that need replacing.
Explore new budget brands and their offerings.
Evaluate the sustainability of your fashion purchases.
Keep track of local sales and discounts.
Consider the longevity of items before purchasing.

Risks, caveats, and uncertainties

While the rise of budget fashion is promising for consumers seeking affordable options, it also presents challenges. Local retailers may struggle to compete, leading to potential job losses. Additionally, the environmental impact of fast fashion raises concerns about the sustainability of this growth. The long-term effects on the market size and consumer behaviour remain uncertain, and brands must navigate these complexities responsibly.

Bottom line

The success of budget brands in India reflects a significant shift in consumer preferences towards value and style. While this trend offers exciting opportunities for retailers, it also raises critical questions about sustainability and the future of local businesses. Balancing affordability with ecological responsibility will be essential for the long-term viability of the fast-fashion sector.

FAQs

What is driving the growth of budget fashion brands in India?

The growth is primarily driven by a shift in consumer spending from local shops to branded outlets, alongside a desire for contemporary styles at affordable prices.

How does Zudio compare to traditional high-street brands?

Zudio has outpaced traditional high-street brands like Zara and H&M in revenue growth by focusing on rapid expansion and quick inventory turnover, appealing directly to the Indian market.

What are the environmental impacts of fast fashion in India?

The fast-fashion sector contributes significantly to waste, with the textile industry being the third-largest contributor to municipal solid waste in India, raising concerns about sustainability and recycling.