One August morning in 2021, a 25-year-old woman in New Delhi sat staring at her phone, unmindful that she could be late to work. So did two of her friends, one in Mumbai and the other in Chandigarh. On all three phones, the H&M app was open. The three women were logged in, holding their breath, waiting for the Sabyasachi x H&M collection to become available on the app.

At 10 o’clock, the collection dropped, and the woman in New Delhi bought a pair of earrings. The three friends felt vindicated in their anxiety and alacrity when they noticed that the earrings were sold out in minutes. The woman in New Delhi just had to have them; they were what she calls “statement” earrings – apparently, not only did their bold design announce themselves as a Sabyasachi, but they also encapsulated the wearer’s personality.


The earrings were a much-needed boost during the grim days of the Covid-19 pandemic. And, thanks to Sabyasachi’s association with H&M, they had come within the young woman’s budget.


Around that time, other well-known designers too had started looking for newer buyers, who would be reluctant to break their banks for a designer outfit. This newspaper reported in April 2022 that JJ Valaya, Tarun Tahiliani, and Manish Malhotra — three of India’s top designers — had sprung surprises at the FDCI x Lakmé Fashion Week, held in a physical avatar after two years, by showcasing efforts to reach out to a larger, newer customer base, including through more accessible price points.


Now that the pandemic appears to be fading from mass consciousness, the seeds sowed back then are sprouting. And the green shoots of recovery in retail – we are talking fashion, apparel, and lifestyle – appear to be taking a K shape, the symbol of a smart bounce-back at the top and bottom ends, while the mid-segment stays dormant.


Valaya, who launched his bridge-to-luxury line, JJV, in 2022, recently inaugurated its first standalone store in New Delhi’s Dhan Mill compound.


“JJV was an opportunity for me to create accessible luxury. A new market of consumers has emerged, who have always aspired to be inducted into the world of couture, but couldn’t afford it,” Valaya tells Business Standard.


The pret line, which was available in the designer’s flagship store in Aerocity for two years, has grown four times in sales in the standalone store since its opening. The couturier now plans to expand it beyond Delhi, opening standalone stores in Ludhiana in May and Mumbai in August, and have five standalone stores for the line by the end of the year. “Globally, the formula of pret has been a massive success and there is no reason why it won’t happen in India,” he adds, referring to the large cohort of aspirational consumers in the country.

There is also a spurt of sales at the value end, especially branded. Unsurprisingly, in the last couple of months, Zudio from Trent has expanded rapidly, while Shoppers Stop has set up its own value format: Intune.


As aspirational consumers get their hands on ‘affordable luxury’, the not-so-affordable luxury is not lagging behind. In recent years, India has attracted a slew of marquee brands: From French luxury retailer Galeries Lafayette to fashion label Christian Louboutin. Last year, Reliance opened the country’s largest luxury mall — spread across 750,000 sq ft — in Mumbai, which houses coveted labels such as Bulgari, Cartier, Louis Vuitton, Versace, Valentino, Pottery Barn, and labels by Manish Malhotra and Abu Jani Sandeep Khosla.


 “The luxury segment has continuously grown since the pandemic and growth has now stabilised. We are cautiously optimistic about luxury retail and are hence expanding Emporio (India’s first luxury mall, in Vasant Kunj, New Delhi). New brands want to enter the space, while existing brands want to expand,” says Pushpa Bector, senior executive director and business head, 

DLF Retail. 


At The Chanakya, DLF’s other luxury offering in the national capital, a slew of labels, including fragrance brand Diptyque, footwear brand Aquazzura, and global apparel brand Golden Goose are looking to open shop soon.   


Multi designer luxury retail chain Aza Fashion has seen strong growth since the pandemic. “The pandemic led to a mindset shift, and revenge buying became the norm. The way people think and live their lives has changed and that change is here to stay,” says Alka Nishar, founder and chairperson, Aza Fashions. Aza has seen a 60 per cent growth in sales in 2023, while offline sales saw an increase of 25 per cent. 

Share of wallet


Demand, especially in the rural sector, is subdued, with products in the mid-price range not flying off the shelves. This is attributed to the unceasing pressure on farm incomes. While this pressure is causing the mid-segment to stagnate, it is also driving growth at the value-end.


“The retail sector has witnessed a K-shaped recovery curve, broadly breaking people into two cohorts: Those who have become better off and a large cohort of people who have not made money,” says Nikhil Sethi, partner and national head, FMCG, with KPMG India. “The top cohort is trading up and hence the premium end of the market, which was relatively smaller and hence easier to build on, is growing. However, the middle segment has started to trade down towards the value segment, which is fuelling growth on that end.”


The slowdown in the mid-segment is also caused by factors such as inflation and higher interest rates, causing consumers to be more judicious with their spends.


“There is a fight for the share of the wallet. Consumers are spending on electronics, automobiles, and even houses, due to which their spending on apparel and lifestyle has come off,” says Kumar Rajagopalan, chief executive officer at the Retailers Association of India.

The pandemic saw a mind-set shift, and the Indian consumer is now more willing to shell out for experiences, resulting in a boom in travel and tourism, hospitality, and aviation.


Rajagoplan explains that consumer financing has grown dramatically in the last few years and apparel has been a discretionary spend due to which consumers are not buying it as vigorously.


Agrees Devarajan Iyer, chief executive officer at retail chain Lifestyle, who says consumers are spending more on experiences than on apparel, while adding that due to higher interest rates, EMIs have increased significantly. This, coupled with inflation, has affected consumer spending on apparel.


“You get less for the same amount. Rising inflation and higher interest rates are a double whammy for consumers,” Iyer says. He adds that salary hikes in the corporate sector have been in the range of 8 to 10 per cent, while inflation has been in the range of 7 to 8 per cent.

The missing middle


Trading down by the middle segment of retailers has led to a decrease in the household penetration of various categories and a reduction in consumption. “This movement towards premiumisation on the one end or down trading to the value segment on the other has left the mass segment stagnant,” says Sethi of KPMG.


The first mover in the value-retail space, V-Mart Retail, does not view the entry of new brands as increased competition but development of the ecosystem.


“The shift is faster than anticipated and this has caused the whole ecosystem – from procurement to sales – to develop. The entry of new players implies that consumers are looking for the right worth of the product they are buying,” says Lalit Agarwal, chairman and managing director, V-Mart Retail.


With GenZ, he says, brand phobia is diminishing, propelling growth in the sector.

Lifestyle’s Iyer says the value segment has been growing more in the women’s and kids’ category, as men continue to be more brand-conscious.

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