Opinion: Value retailers tap fashion-savvy small towns3 min read . Updated: 05 Jun 2019, 11:02 PM IST
Small town shoppers are not brand-conscious, but fashion-conscious
J .P. Shukla, co-founder and chief executive officer of 1-India Family Mart, a retail chain present in small towns, says value retail is in his DNA. Shukla is not exaggerating. He was part of the founding team at Vishal Mega Mart—the value retailer which was eventually sold to private equity firms. He also worked for several large retailers, including for a hypermarket, as well as Future Group’s Fashion Big Bazaar. But in 2013, he set up 1-India Family Mart, which currently operates 90 stores and has a turnover of ₹420 crore. So, when Shukla talks about the growing aspirations of the fashion-conscious consumers in small towns of India, you take note. Riding on the demand for pocket-friendly fashion in tier-3 and tier-4 towns around the country, Shukla is looking to open 40-60 stores this year in Purnia (Bihar), Mahoba (Uttar Pradesh) and Shivsagar (Assam), among others. He started out with Ghazipur and Fatehpur in UP and now has stores in remote Assam towns such as Udalguri, Nagaon and Tinsukia.
Aditya Birla Fashion and Retail Ltd (ABFRL), meanwhile, is also eyeing small towns. Although ABFRL markets premium brands such as Louis Philippe, Allen Solly and Van Heusen, it is addressing the small town shopper through its value fashion chain Style Up, launched last year. According to a Mint report, Style Up operates 16 stores across Deoria and Robertsganj in UP, Bhabua, Begusarai, Lakhisarai and Gopalganj in Bihar. It hopes to add 10-12 stores this year. The company feels that there is a large market out there in tier-4 and tier-5 cities for its ethnic and western apparel for men, women and children at an average price point of ₹500-600. With Style Up, Aditya Fashion joins the ranks of value fashion retailers–both regional and national–like V-Mart and Vishal Mega Mart, among others, to cater to small cities.
“These retailers are providing merchandise that addresses the fashion aspirations of consumers. And, the fact that they are value retailers, their business model addresses the price sensitivity of these towns. There are many regional retailers if you dig deep in every region or cluster. V-Mart has become a north and west India play. Others include Vishal Mega Mart in North India, Suxus in Madurai and Coimbatore, and Pakiza Retail in Indore," says Ankur Bisen, vice-president, retail and consumer products, Technopak Advisors.
These chains address the thrifty consumers in small-town India who seek latest fashion at lower price points. The shoppers here are not brand-conscious, but fashion-conscious. “They aspire for the same fashion that’s available in the metros, but lack opportunity. We offer them big city fashion—with similar look and cuts—at value pricing," says Shukla.
1-India Family Mart offers fast fashion, which Shukla claims to source from the same suppliers who work with big brands. “Our fabric, designs are the same, but the “brand" name is retail-specific. Shoppers get the latest fashion, but at commodity pricing," he adds. Bisen says that small town consumers aren’t brand loyal, but trendy. “The value fashion or fast fashion model is designed to address this aspiration while keeping the prices in check," he adds. Growth in internet penetration and subsequent exposure to digital media such as YouTube and Instagram, as well as social media influencers, have led to fashion awareness. “With increase in smartphone penetration, access to information has become easy regardless of town class. Consumers in smaller towns are travelling, leading to better exposure. Looking good and being up to date with fashion is important for youth across India," says Rinku Patnaik, country chief client officer of research firm Ipsos India.
She adds that consumers in lower tier towns have higher aspirations for staying in vogue with latest fashion trends and the younger generation in these towns dress like their counterparts in bigger cities. “It is difficult to differentiate between the two. They want to wear the latest, but these consumers are also extremely value conscious," she adds.
According to Bisen, if apparel, footwear and accessories are clubbed under one group at an all-India level, it is the highest category of household expenditure after food.
Shukla sums up the aspirations of small town India when he confesses that the hot pants in his stores fly off the shelves in UP, Bihar and Jharkhand. “And, the small towns in these places are conservative. So, I don’t know where these girls are wearing them, but they are definitely buying them."
Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.