Brands are leaving no stone unturned to address high fashion aspirations of customers from metros to Tier IV locations. Being large format retail, investments are on the higher side; however, returns are interesting enough to capture the senses.
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 trends and 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.
“We have over 1,000 styles and our customer age bracket ranges from 18-45,” says Anand Aiyer, Senior Business Head and VP, EasyBuy, as he talks about his large customer base. 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.
BRANDS ON EXPANSION SPREE
Value retail is a result of high fashion aspirations of customers in Tier II, III and IV cities, adds Aiyer. It is in fact this 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 one year since its launch, the brand has opened 16 stores across the country.
“After receiving stupendous responses from our stores in Tier III cities like Faizabad, Azamgarh and Robertsganj, our focus shifted towards the superlative shopping experience at the store and in fact 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.”
INVESTMENT INTENSIVE
To own an Easybuy franchise store, the overall investment would be Rs 1.3-1.45 crore for 5000-6000 sq ft area in a Tier II or Tier III city. While 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 security deposit. Apart from this, the brand will charge Rs 60 lakh as bank guarantee.
On an average, a franchise store can generate Rs 75 lakh every month. While the average footfalls on weekdays are 800, it could be over 1000-1200 on weekends and special occasions. The gross margins (40-70 per cent) vary from product-to-product.
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