Why Indian Conglomerates Are Chasing Fast Fashion

TITLE: Why Indian conglomerates are chasing fast fashion | The Daily Brief #453 CHANNEL: Markets by Zerodha DATE: 2026-04-27 ---TRANSCRIPT--- In today’s episode, we’ll break down two important stories. First, we’ll talk about why Indian conglomerates are chasing fast fashion and then we’ll talk about the IMF having a grim outlook for the world. Welcome back to the daily brief by Zeroda, where we cut through the noise to help you understand what’s actually happening in the most important stories from business and markets. If you’re listening to this on your commute, on a walk, or at the gym, you can also find the daily brief as an audio podcast on Spotify, Apple Podcasts, or wherever you listen to your podcasts. I’m your host, Axara, and today is Monday, 27th April.

Coming to the first story, so Trent, the Tata Group’s retail arm, published its full year results last week. By March 31st 2026, it was running 963 Zoodio stores across India. So if you haven’t been, Zoodo sells t-shirts for rupees 3.99, jeans for under rupees 600 with 47 new cities entered in the last quarter alone and 80% of new stores in tier 2 and tier 3 cities. Now Tata is not alone here. Reliance launched USA where all products are priced below rupees 9.99 and most below rupees 4.99. ABFRL diadya fashion arm launched owned in September 2025 starting at rupees 399 and targeting Gen Z with 10,000 styles and in April 2026 it hired a new CEO for it Marco Agnolin who previously ran Berska and diesel. So three of India’s largest conglomerates companies whose combined reach spans oil refineries, steel mills, telecom networks and cement plants are in an active competition over the cheapest part of the wardrobe. The obvious answer is that young Indians want affordable clothes and the market is large. Now that explains why the segment exists but not why the Tatas and Amanis are the ones winning it. There are plenty of younger, nimler, more fashion native companies that spotted the same demand. But fewer than 10% of the 700 plus D2C fashion brands operating in India have grown beyond rupees 50 cr in revenue. Most of them have not scaled and the reason behind this might have nothing to do with fashion or taste.

Now, fashion is structurally different from most consumer goods in one way that matters enormously at low price points. A shampoo company has a product. The formulation changes once a decade and you forecast demand, manufacture, ship. If you overproduce, you discount. Nothing expires. This whole equation gets exponentially hard for a fashion retailer. So each permutation and combination of size, color, design, and trend is a new distinct item that can succeed or fail on its own terms. A store like Zodio might carry thousands of distinct items at any point. Every single one carries its own demand risk. A style can miss. A color can arrive out of season. The size ratio can be wrong. Too many smalls, not enough mediums. And unlike shampoo, a fashion item has an expiry date that has nothing to do with chemistry. Last quarter’s trending cargo pant is this quarter’s markdown problem. At rupees 2,999 per piece, you can survive your own mistakes. Mark something down 30% and the store recovers something. The margin provides a buffer. At rupees 499, that buffer does not exist. A slowmoving 499 rupee item cannot be meaningfully discontinued. It’s effectively a writeoff. So the only way value fashion works is if you’re right which style, which color, which size, which city, how many units most of the time and you turn inventory fast enough to catch errors before they compound across a thousand stores. Trent’s own FY26 results statement say their disciplines around inventory provisioning was the business’s operational drivers. The company also announced a rupees 2,500 cr rights issue part of which is earmarked specifically for expanding and automating supply chain and warehousing.

Now India is one of the world’s largest garment producers. The clusters in tirupur, Surat, Ludjana and Bengaluru supply H&M, Gap and Marks and Spencer. The industry is enormous, mature and efficient. It’s also almost entirely calibrated for the wrong customer. So India’s garment manufacturing base was built around western fashion buyers. Bulk orders four to six month planning horizons, standardized international sizing, free onboard export contracts. That supply chain runs on lead times of 75 to 90 days from order to finished goods, fabric procurement, sample approval, bulk production, finishing, quality checks, documentation. The system is efficient for a customer who plans seasons far in advance and orders in large volumes. But domestic fast fashion, the kind Zuddio, Ustar, and Owned want to operate, needs the exact opposite. Reliance’s FY25 annual report says its apparel business runs a design to shelf cycle of 30 days. So to go from a sketch to a used store shelf in 30 days, you can’t wait for fabric to be ordered after a design is confirmed. For that, Reliance needs raw materials prepositioned at vendors before the production decision is made. and manufacturers who can run small batches and pivot to a new style within days. A garment factory running on 90-day export cycles has its entire operation organized around that rhythm. Fabric procurement schedules, workforce planning, production line sequencing, quality check processes. Restructuring for 30-day domestic cycles means changing all of that. Different raw material buffers, different production sequencing, different everything. A factory makes that investment only when a retailer can guarantee enough consistent purchase orders to recover the cost of retooling. That operating model 30 days, small batches, Indian sizing, high style rotation is not what Indian garment factories are used to doing. Which means that when Zudo or Usta want to restock a trending item in week three, they’re calling a factory that was built for a completely different customer and asking it to work differently that fits their model. and the factory would only comply if they would get enough volumes and business from them.

Now, Trent with 963 stores and rupes 20,000 cr in annual revenue can make that promise. Reliance Retail with 19,340 stores and 349 million registered customers can make that promise. A brand doing rups 50 cr in annual revenue cannot. This is the mode that the category conversion consistently misses. The competitive advantage in value fashion at scale is purchase order volume required to get a manufacturer to change how it works and then sustain that relationship at the speed the business model needs. The private label structure of these businesses ties this together. Zuddio, US and owned are all entirely private label. Every item designed, sourced and sold by the retailer with no external brand names. At sub 500 rupee pricing, there’s simply no margin to pay a third party for their name. So the retailer absorbs every function, designer, buyer, production manager, quality controller that traditional fashion distributes across the supply chain. That means the business is not just the retail store but ownership of the complete supply chain. Which is why Reliance describes its fashion operations as yarn to wardrobe vertically integrated from fabric sourcing through design, production, and distribution. So when ABFRL needed someone to run owned, it did not hire from Indian retail or Indian fashion. It hired Marco Agnolin, the man who previously ran Berska, Index’s youth fast fashion format with 854 stores across 68 markets and before that diesel. He’s someone who spent his career operating this machine at scale across dozens of countries.

Tata, Reliance, and Bila are not in value fashion because they have better taste than smaller competitors. They’re in it because value fashion at national scale is an industrial supply chain problem. And industrial supply chain problems are precisely what these companies can solve with their scale and their deep pockets. A bane and company study found that fewer than 10% of the 700 plus D2C fashion brands operating in India have scaled beyond rupees 50 cr in revenue. Most fashion native brands hit a wall not because their product was wrong but because they could not build the supply chain infrastructure that national scale requires which is exactly why the people who built India’s steel plants, oil refineries and telecom networks are the ones running it.

[Second story on IMF World Economic Outlook and tidbits omitted from this transcript file for brevity — see full cache.]