Trent Ltd, the owner of Westside and Zudio, is replicating its metro densification strategy in India’s smaller towns, with nearly two-thirds of its new store openings now concentrated in tier-2 and tier-3 cities, as it bets on evolving consumption patterns beyond metros, Managing Director P. Venkatesalu said in response to a Moneycontrol query, on the sidelines of the Retail Leadership Summit in Mumbai.
Venkatesalu said the company is building deeper presence within individual micro markets rather than relying solely on flagship expansion, as it seeks to capture rising aspirational demand among younger shoppers outside the top urban centres.
" We see that the young customer in those (smaller towns) markets is super clued on to what trends are playing out. Having said that, I do think she will evolve more as she gets to experience more of these brands in her own micro markets. We do bet in a very significant way that the customer will be more interesting, the markets will be far more attractive in the years ahead. But that's the same approach that we took to metros five years ago in terms of densification, opening far more presence in individual micro markets. So we're doing the same thing broadly speaking in (tier) three, four markets now."
The Tata group company operates 278 Westside, 854 Zudio (including 4 stores in the UAE) and 32 stores across other lifestyle concepts, as of December 31.
"We are increasingly opening is new towns, new cities, new micro markets within the periphery of cities. So clearly new micro markets is a focus area for us," Venkatesalu added.
Meanwhile, the retailer is also looking to diversify its presence overseas, with plans to build on its international proposition by focusing on brands that have already achieved scale in India, specifically Westside and Zudio. There is a specific interest in expanding to geographies where the Indian diaspora is strong, such as the United States, where the Westside brand is already well-known.
Separately, commenting on the demand trends, Venkatesalu said that the urban demand is coming back slowly and the company sees benefit from the GST cuts to be seen in the medium term.
"Post the GST implementation, there was a certain period when there was a prioritization to big ticket items like electronics, travel, etc. But that said, over the medium term, we do think small ticket discretionary will also benefit from the changeover, he added.
Earlier this month, Trenr reported a 36 percent rise in its standalone net profit to Rs 640 crore for the third quarter ended December 31, helped by higher sales amid network expansion. The company had posted a net profit of Rs 469 crore in the corresponding quarter a year ago. Its revenue from operations increased 16 percent to Rs 5,259 crore during the quarter under review as against Rs 4,535 crore in the year-ago period
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