Sudio is a very popular brand today. The story of how this brand, which was unheard of until two years ago, grew into a $500 million brand is quite amazing. Sudio's move comes after it overtook the likes of Website and Max, the giants of Indian fashion. The biggest highlight of the Sudio is its value-for-money pricing with all products priced under Rs 999. Interestingly, Sudeo doesn't offer discounts and doesn't sell seasonal clothes, but it still has a major share of the Indian fashion market. Sudeo has also overtaken its own sister company Westside. It's not just because they have cheap clothes. How did this Tata-owned company capture such a competitive market? How did they become a $500 million brand? There are five main reasons for the increase. Let's see what they are.

First, let's know more about the Indian fashion market. The Indian fashion market is an interesting one. Most of the brands in the market are aimed at the premium consumers in tier one. It is only very recently that they have realised that tier one to three cities have more market potential and money. According to last year's online shopping transaction data, customers in tier two to four spent 77% more than those in tier one. This is the possibility that Sudio and value pricing products are trying to capitalize on.

Now, let's take a look at the 5 key factors that led to the success of Sudio.

The first of these is pruning.If you look at consumers in the Indian market, they rely on brands like H & M and Zara when they want to spend more money, but when they don't want to spend that much money, they rely on low-end Indian brands.It is this suboptimal culture that Sudio capitalizes on.One thing to note in the specification of Sudio products is that all the products are priced below 999.At this price, you will get the latest clothes.There is one thing that has been noticed in the Sudio clothing customers that for them label or brand is not that important but they are interested in the affordable clothes which are good to look at.Sudeo was well aware of the target population - college-going children and those between two and four years old.They wanted good clothes at affordable prices to maintain their social status.Sudio basically did this by making the best trendy clothes available at an affordable price.It was very difficult to give Sudio's competitors the same quality of clothing at the same price as Sudio.For example, take Reliance Trends, they are giving 5 times more price for the same clothes as Sudio.Sudio's own sister company, Westside, offers the same clothes at three times the price.This is part of Tata's strategy.While Westside caters to customers in big cities, the studio caters to customers in smaller towns and cities.This will help them reach a wider audience.Going forward, the studio will develop products up to Rs 1500 to increase margins.

The second factor is the importance they give to the inventory. For any value-priced product to succeed in the Indian fashion market, inventory needs to be given importance. That's why Sudio has a precise inventory plan. Sudio's plan is to offer the best clothes, at the most attractive prices, and to keep updating the inventory as quickly as possible. This plan has been very successful. With inventory renewing at a rapid rate of 160%, every two months, the studio's products are updated to keep up with the latest trends. Think about it, every two months, all the products will be in new stores, which is something that none of the competitors can do. The cost of interior store decor staff in shops, keeping your stores fresh with very less inventory is a very genius idea. Due to the importance of inventory and renewing it, Sudeo does not sell seasonal clothing such as winter clothing. By staying away from seasonal clothes in this way, even if there is no good business in any season, they will never have stagnant stocks. Along with this, a well-managed operational department also plays a big role in the success of Sudio.

Better functionality is the third factor in the success of Sudio.The realization that in order to maintain profitability, there must be better efficiency helped Sudio.They were able to achieve this without spending as much money on marketing as H & M or Zara were doing.All the money saved from non-marketing goes towards the quality of the product.That is why the beneficiaries are surprised by the quality of the clothes they get and the price at which they get it.Customers talk to their friends and others about this excellent system, due to which Sudio can do better marketing without spending money.

Their fourth secret to success lies in their store locations. Take, for example, the ten studios in Mumbai. None of these 10 stores are located in Mumbai’s downtown or surrounding areas; rather, they are situated in the suburbs. Even their sister company, Westside, has established its 13th outlet within Mumbai city limits. By setting up stores in suburban areas, they benefit from much lower rent costs and face less competition. This is because Studio targets not the tier-one customers in the city but those in tier-two and tier-three cities. This strategy helps reduce their expenses while maintaining consistent product pricing through value pricing. All of this combined results in Studio achieving a very high revenue per square foot of between ₹12,000 and ₹15,000—an amount their competitors cannot match. The market average ranges only from ₹8,000 to ₹10,000 per square foot. Westside’s revenue per square foot is ₹9,950. Studio had initially decided not to enter e-commerce, due to the additional delivery costs and higher chances of returns. Instead, they aim to grow through their stores. Their approach is to satisfy customers attracted by value pricing through strategically located stores. Currently, they own 352 stores across 119 cities. Since there are still many untapped cities and smaller towns, the potential for further growth is very large. Opening 350 stores in six years is a remarkable achievement. This success has been made possible by their FOCO model—Franchise Owned Company Operated. Here’s how it works: they identify potential partners willing to invest ₹2 crore to ₹5 crore in stores that cover around 6,000 square feet. These franchise owners make the investment and open the stores, receiving a fixed share of the revenue. Studio manages the store operations and takes the profits. This model has helped Studio expand rapidly into countless cities.

Their fifth and final success secret is private labeling. This is a strategy used by their own sister company, Westside. If in 2013, 80% of Westside's revenue came from its own brands, now 100% of its revenue comes from its own brands. Private labeling allows you to avoid paying commissions to other brands. Tata's two fashion brands, Sudio and Westside, are the only ones in India to have 100% private labeling. By doing this, they are able to follow the fast-changing fashion trends and since the main users are college students, they are interested in the clothes of the changing trends that are used by celebrities and influencers on Instagram and so on. Through private labelling they can renew the inventory every two weeks so that they can keep pace with the changing trend. That's why everyone thinks that the new trendy clothes seen on Instagram can be found at a discount in Sudeo.

It is Sudio's focus on these five key areas that has made them a $500 million company today.