The Tata Group, under the leadership of Noel Tata, has made a significant entry into the mass-market beauty segment with the launch of its new retail format, ‘Zudio Beauty’. This new venture aims to compete with established brands such as Hindustan Unilever’s Elle18, Sugar Cosmetics, Health & Glow, and Colorbar, as reported by The Economic Times.
Zudio Beauty is strategically positioned to meet the growing demand for affordable beauty products. While competitors like Reliance, Nykaa, and Shoppers Stop have focused primarily on premium and luxury categories, Zudio Beauty seeks to fill the gap in the mass-market segment. The first Zudio Beauty store has opened its doors in Bengaluru, with plans for expansion into major cities including Gurugram, Pune, and Hyderabad.
Tata, who pioneered India’s first beauty brand Lakme—which was later sold to Hindustan Unilever—already has a foothold in the beauty industry through Tata Cliq Palette, a premium cosmetics store format.
Zudio, Trent’s affordable apparel brand, has experienced remarkable success since its inception in FY17. Originally introduced within Star stores, Zudio has grown rapidly, benefiting from its exclusive design offerings and a low gross margin of 35-40%, which contributes to high store efficiency. The brand’s revenue per square foot stands at Rs 16,300, which is twice the industry average. By FY22, Zudio had surpassed Westside in store count and exceeded it in revenue by FY24.
As of June, there are 559 Zudio stores across the country, with further expansions underway, allowing the brand to outpace many of its competitors in the value retail segment. Industry experts anticipate that Trent will replicate its success in the beauty sector.
Abneesh Roy, executive director at Nuvama, remarked, “This is another disruptive move by Trent, following its success in value apparel. If the quality resonates with consumers, this could be their next big win.” He added that competitors in the beauty space, particularly those similar to Nykaa, could face challenges, indicating that the move could potentially impact fast-moving consumer goods players as well.
Global beauty giants, including L’Oreal and Shiseido, view India as a crucial growth market. L’Oreal has already identified India as its fifth-largest market for professional products, while Shiseido has partnered with Shoppers Stop to introduce its premium Nars Cosmetics brand to the Indian market.
A report by Redseer Strategy Consultants and Peak XV predicts that specialized beauty brands such as L’Oreal, Mama Earth, Nivea, and Nykaa, which currently hold a 33% market share, are expected to grow to 42% over the next five years. In contrast, traditional players like Hindustan Unilever and Procter & Gamble may see their combined market share decline by 900 basis points to 58% by 2027.
Despite the current number of Zudio stores exceeding 550, analysts at Citi Research believe there is significant scope for growth, with further expansion into the beauty segment anticipated.