Value fashion retailers flock south for expansion and growth
Take, for example, Trent’s Zudio, the nation’s fastest-growing value retailer. The brand has 833 stores across the country. While Maharashtra hosts the highest number of stores with around 118 stores, Zudio has around 282 stores in Tamil Nadu, Andhra Pradesh, Karnataka, Kerala and Telangana, accounting for around 34% of its network.
Its new rival, Reliance Retail’s Yousta, which opened in August 2023, has a total of 120 stores, 49 of which are in the southern region, accounting for 41% of its total network. The first store opened in Hyderabad in 2023.
In the September quarter, Aditya Birla Fashion and Retail Ltd (ABFRL) officially entered the mass youth value segment by converting its Style Up stores into OWND!, positioning it as a Gen Z-focused fashion brand. “OWND! continued to gain strong traction with revenue up 43% year-on-year. The brand expanded its footprint by adding 10 new stores in the second quarter and now has 59 stores and is on track to add 30+ stores in the second half of the year,” ABFRL CFO Jagdish Bajaj said during the post-earnings call on Nov. 11.
OWNER! It has 25 stores in important cities of South India such as Vizag, Chennai, Bengaluru, Hyderabad, Mysuru and Guntur, underlining the brand’s focus on the southern market.
“In terms of value fashion, the south is a very under-penetrated market. If you look west and north, the expansion naturally comes to the south and then east India,” said Pratik Prajapati, equity research analyst at Ambit Capital. He added that rising incomes and the still largely unorganized market make this a lucrative opportunity.
mass players
Small value retailers are also looking to expand in the South.
Vishal Megamart, one of the largest retail chains in the country, entered Kerala in the first half of this year and in Karnataka in the last 2-3 years. Although the company does not disclose state-by-state store numbers, the southern region has the second highest density of outlets, with approximately 193 of the 742 stores located there.
Key Takeaways
- South India has become the focal point of value fashion expansion due to its under-penetration and high growth potential.
- Major players are dedicating a significant portion of their networks to the South, and mass-market players such as V-Mart are accelerating their traditionally Northern-based expansions.
- Rapidly rising per capita income is encouraging stronger discretionary spending and allowing consumers to shift from unorganized to organized, value fashion.
- The region offers structural advantages such as more rational rent as a percentage of sales, smaller store format needs, strong visitor conversion and shorter payback cycles.
- Southern consumers’ trend towards smaller, high-frequency purchases aligns perfectly with the fast fashion or private label model; This is leading retailers to customize assortments and increase private label penetration for better margins.
V-Mart Retail Ltd, traditionally one of the strongest players in Uttar Pradesh and Bihar, is also accelerating its expansion in the south. According to its latest filings, V-Mart currently operates 533 stores across the country, comprising 438 V-Mart outlets and 95 Unlimited stores. The retailer has been steadily adding stores in Tamil Nadu, Karnataka, Andhra Pradesh and Telangana as it looks for new growth corridors outside its old belt.
“We will go ahead and focus a little more on the South India part as we see more opportunities… Markets in South India like Tamil Nadu and Kerala are looking good,” said V-Mart MD Lalit Agarwal during the September earnings call. He also noted that there is a distinction between V-Mart’s positioning and the positioning of new urban-focused players: “Style Union, Yousta and all of these are definitely slightly more urban retailers. We are a mass retailer and the price point of similar products should be at least 15-20% lower. That’s our goal.”
Agarwal added that competition in the southern value fashion segment remains relatively limited compared to the crowded northern markets, which increases the company’s ability to scale.
revenue growth
Much of this increased interest is due to the sharp increase in purchasing power in the southern states. Southern markets have seen some of the fastest growth in per capita income in the last decade, according to a statement submitted by the finance ministry to the Lok Sabha in July 2025. Net State Domestic Product (NSDP) per capita of Karnataka) rose from ₹1.01 lakh in 2013-14 ₹2.04 lakh in 2024-25, an increase of 88.5%. During the same period, Tamil Nadu’s increase was 83%. ₹1.96 lakh while Telangana increased by 85%. ₹1.87 lakhs. Andhra Pradesh also recorded a strong increase of 81%. ₹1.41 lakh. This sustained income growth over the past decade has strengthened discretionary spending, allowing middle-income households to shift from unorganized clothing stores to branded but affordable fashion.
South India, where disposable incomes are rising and where there is a predominantly unorganized clothing market, offers significant growth opportunities for retailers looking to capitalize on this change. For many value chains, the unorganized to organized migration currently seen in states such as Karnataka, Tamil Nadu and Telangana makes the region the most important new frontier. As Northern markets matured and competition intensified, the South became the focus of expansion, making it a major geography with significant potential for scale.
“Existing organized players have very large showrooms of around 1 lakh sq ft. But there is no valuable retail format with typical store sizes of 10,000 sq ft. This is the reason why brands are moving into these under-penetrated markets; they see a good opportunity here,” Ambit’s Prajapati said.
Analysts also say the southern market offers distinct structural advantages for value retailers. “The store economics in the South are quite positive; rent as a percentage of sales is more rational, catchment areas are more compact and foot traffic conversion is strong, which shortens the payback cycle,” said Sandeep Abhange, research analyst at LKP Securities, consumer and mid-market.
consumption model
He added that consumer behavior in the region complements the value-fashion model. “Shoppers in the South have relatively higher discretionary spending but are buying in smaller, high-frequency baskets. This fits perfectly with their fast fashion and private label strategies, especially.” ₹199-499 price point.”
According to LKP’s Abhange, many micro markets are emerging as major growth centers. “Cities like Kochi, Thrissur, Calicut, Coimbatore, Madurai and Mysuru are seeing strong interest because penetration is low and consumption is increasing,” he said. Retailers are also adapting their assortments more sharply. “Companies are customizing plates and prints by region and increasing private label penetration to increase gross margins,” he added.
Despite higher rental costs, southern states continue to attract interest from retailers. “Brands are seeing strong growth. There are already big stores in jewelery and other categories, but there is still plenty of opportunity for expansion in value fashion,” Ambit’s Prajapati said.
