Retailers look to cash in on small towns' changing fashion needs

Two years ago, when V-Mart opened its first retail store in Gumla — a tier-IV town in Jharkhand — locals used to enter the store barefoot. It was the biggest store the Maoist-infested region had then seen, and therefore the modern and glossy feel of the retail chain prompted buyers to leave their footwear outside the store.

Much has changed since then. Thanks to internet penetration, people now aspire to look good and, as a result, help fuel the growth of such value retail chains in tier-III and tier-IV towns. 

“While aspirations are increasing and people want to look good, they still buy clothes as an investment given their income levels still haven’t increased much. It is the college-going crowd and young professionals who want a bigger wardrobe,” says Anand Agarwal, chief financial officer of V-Mart. 

Riding on this change in aspirations, the value retail chain is growing close to 22 per cent year-on-year, and is aggressively looking to expand its footprint, with 60 new stores this year. 

The company, which mostly operates in tier-II and tier-III towns, has 236 stores across 18 states. It recently opened stores in Contai (West Bengal), and Kangra (Himachal Pradesh). 

While the second quarter is expected to be flat for the ~1,430-crore firm, it is expecting a 25-30 per cent increase in footfall this festive season. Agarwal says high-waist jeans and cape denims are in high demand in such areas, and the retail chain is closely following global fashion trends to bring them to consumers at one-fourth the cost. 

V-Mart also recently started its online format, and will be offering home delivery, for which it has collaborated with 40 logistics partners to fuel sales during Durga Puja.

“E-commerce is also playing a major role in creating awareness about latest fashion trends. Earlier, new trends used to reach smaller cities after six months, but that is not the case now,” says Hemant Agarwal, CMD of V-Bazaar, another value fashion retail chain that operates in UP, Bihar, Jharkhand, and MP. 

Close to 85 per cent of the company’s business comes from apparel retail. 

V-Bazaar, which currently has 55 stores, will come up with 12 new stores for the festive season, at a capex of ~90 lakh each, and enter the Odisha market. It has plans to open 25 stores by early next year. “We are hoping for 20 per cent rise in footfall during the festive season,” he said. 

The rise in footfall could be slightly less as compared to the previous year. This is not because of any slowdown but due to the fact that e-commerce sales are also picking up, explained Anil Talreja, Partner at Deloitte India. 

To meet the changing fashion trends in smaller towns, retail chain 1-IndiaFamilyMart is set to open 18 stores this financial year, in towns such as Senapati (Manipur) and SivaSagar (Assam). 

Each of these stores will entail an investment of ~80 lakh. The firm has also laid out plans to launch 350 stores with an investment of ~2,300 crore over the next five years. It has 95 stores across 72 cities, and sells apparel in the range of ~100-2,000. “This year, harems and palazzo are selling the most, followed by denim kurtis,” says J P Shukla, co-founder and CEO of 1-IndiaFamilyMart.

Kishore Biyani-led Future Group’s value-fashion venture FBB also has plans to invest ₹350 crore to open 140 exclusive outlets in the next two years.

Style quotient


  • Internet penetration has helped take fashion trends to tier-3 as well as tier-4 towns
  • V-Mart, 1-IndiaFamilyMart, and V-Bazaar among companies looking to open new outlets
  • College-going crowd and young professionals increasingly want a bigger and better wardrobe


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