8080 l l ENTREPRENEURENTREPRENEUR l l JJUULY 2019LY 2019
A
t a typical weekend, Sanjay Place, a
commercial and retail hub in Agra,
is bustling with shoppers who are
spoilt for choice for their apparel
purchases. The area is lined up
with scores of exclusive showrooms
of national and international
clothing brands. While Tier II
customers, like those in Agra, are traditionalists
when it comes to retail therapy who prefer to visit
local markets like Raja ki Mandi and Sadar Bazar,
Sanjay Place and its ilk have emerged as major
hubs for apparel purchases.
Replicate the above picture
across India, and the fashion
retail boom across the country
becomes all too visible in Tier
II and Tier III cities bulging
with middle class population
with disposable incomes.
Fashion clothing is a reflection
of growing aspirations here.
The popularity of malls in
smaller cities such as Indore,
Surat, and Kochi means
brands are rushing to cater to
these markets.
Their optimism is not
misplaced as spending
on clothes has grown an
estimated 181 per cent
during 2010 to 2018. While
men’s clothing continues to
be the biggest chunk of the
apparel market at 41 per cent,
women’s wear contributes
almost 38 per cent, and is
largely dominated by ethnic
apparel such as sarees and
suits. Kids’ wear with 21 per
cent of the overall market is
the fast growing segment.
Tier II and Tier III markets
make real business sense for
fashion retailers as real estate
costs in these markets are 30-
40 per cent lower than those
in metros and Tier-I cities.
Experts opine that these
markets are still unexplored
and competition is less as
of now.
The apparel business is
still largely unorganized with
formal retail accounting for
just 35 per cent of sales.
Nevertheless, organized retail
is likely to see high growth
and reach an estimated
45-50 per cent by 2025.
As there is a large scope for
organized fashion retail to
multiply manifold, it is a great
opportunity for investors. The
retail trends and business
models are evolving and
growing by leaps and bounds.Emergence of
Value Retail
Aligned with the latest global
trends, shoppers in India
are shifting to value-for-
money fashion. People no
longer consider apparels as a
durable item, to be shopped
seasonally. Instead, they are
now chasing latest trendsand hunting for bargains.
For their part, from bringing
global designs to changing
styles every 45 days, brands
are leaving no stone unturned
to tap the most aspirational
fashion markets in India.
Mostly introduced to tap
the market in non-metros
where big brands shied away
from investing, value retail has
been successful in bringing
designer styles, superior
quality products at affordable
prices to value-conscious
Indian customers.
“We have over 1,000 styles
and our customer age bracket
ranges from 18-45,” says
Anand Aiyer, Senior Business
Head and VP, Easybuy. The
average footfalls at an Easybuy
store are around 800. What
is the attraction? “Our
products start at as low as
Rs 69. Our value-for-money
positioning has enabled us
retain customers as compared
to other brands,” he says.
Value retail is a result of
high fashion aspirations of
customers in Tier II, III and IV
cities, adds Aiyer. It is in factthis demand from non-metro
cities that is driving brands
towards value fashion retail.
Just last year, for instance,
Aditya Birla Fashions
launched Style Up, a value
retail brand that exclusively
caters to the demands of Tier
III and Tier IV cities. In less
than a year since its launch,
the brand has opened 16
stores across the country.
“After receiving stupendous
response from our stores in
Tier III cities like Faizabad,
Azamgarh and Robertsganj,
our focus shifted towards
the superlative shopping
experience at the store and
we even launched our first
fully-air conditioned fashion
store in Bhadohi. The Style Up
stores cater to the consumers
in upcountry markets who
are now becoming fashion
conscious and pose a huge
growth opportunity for value
retail chains,” says Prasoon
Mukharji, Vice President,
Style Up.
With over 70 stores across
the country, Easybuy, the
flag-bearer of value retail in
India, has a long-term vision
of having one Easybuy store
in every district headquarter
(over 500) of India.
Speaking about the brand’s
franchising plans, Aiyer says,
“With our proven franchising
model, many of our existing
franchisees have scaled up to
3-4 stores within the cluster,
which is primarily due to
higher sales than projections
with better returns on
investment.”
To own an Easybuy
franchise store, the overall
investment would be Rs
1.45 crore in a Tier II or
Tier III city. The store setup
capex would be Rs 65 lakh,
which includes Rs 40 lakh
of inventory and Rs 25 lakh
for interiors, lightings and
equipment. As per the brand,
Rs 20 lakh will be needed
for land rentals as securityFashion