Trent Ltd., the retail arm of the $165 billion Tata Group, has witnessed its sales triple compared to pre-pandemic levels, with net profit surging 12 times.
Mukesh Ambani, Asia’s richest man, faces a formidable challenge in the retail sector, where his Reliance Industries is struggling to capture the fast-fashion market, while the Tata Group, under the legacy of Ratan Tata – whose net worth continues to reflect his enduring influence – is currently excelling in this area.
Trent Ltd.’s fast-fashion brand, Zudio, has gained significant popularity among young consumers for its trendy and affordable clothing, contributing to the company’s impressive growth.
This success presents a challenge for Ambani. Over the past year, Reliance Industries has invested more than $2 billion into its retail division, with the primary goal of leading this unit to a successful initial public offering (IPO) or spinoff. However, to achieve this, Ambani needs to dominate the fast-fashion market.
To bolster his position, Ambani has partnered with Chinese e-commerce giant Shein, which is making a return to India under Reliance’s control after being banned in 2020 due to border tensions. This collaboration could be a key asset for Ambani as Shein prepares for its own IPO.
In a bid to compete with Zudio, Ambani launched Yousta, a store where everything is priced under Rs 999 ($12). However, the results have been underwhelming. Reliance Retail’s year-on-year sales growth in the June quarter was just 8%, primarily driven by sales of air conditioners, refrigerators, TVs, and groceries, while the fashion and lifestyle segment underperformed due to “tepid discretionary demand.”
Despite Reliance Retail’s substantial size, with revenue exceeding $36 billion, Trent’s $1.5 billion-a-year franchise is rapidly growing, posting a 56% increase in sales last quarter.
