The Indian wedding market is experiencing a slight slowdown this year, with lower overall celebrations compared to the post-Covid rebound seen in 2023. Combined with an overall aversion by Indian middle class consumers towards discretionary expenses, this has translated into a no-growth year so far for India’s largest ethnic wear retailer Vedant Fashions.
However, the company has no plans to go slow on its aggressive expansion plans, including its new market in South India.
Visible Slowdown
Vedant Fashions, which sells occasion wear under brands such as Manyavar, Mohey and Mebaz and listed on the bourses in a Rs 3,100 crore IPO two years ago, has seen its revenue remain flat in the first nine months of the current financial year. Net profit slid 6.8%.
“It is a bumpy road in a long journey. What we kind of understand..that we are doing everything which is right for the business” said Vedant Modi, the company’s Chief Revenue Officer after disclosing the company’s quarterly results.
The company may be the victim of a unique trend seen in the Indian market in 2023: While the upper-middle class and the affluent have never had it so good, the lower middle class and the working class have found the going increasingly tough. This is also visible in a growing urban vs rural divide, with bigger cities remaining relatively cash rich, while smaller towns and rural areas are under pressure.
All this has meant that high-end designer brands, such as Ritu Kumar and Sabyasachi, continue to grow fast, but brands such as Manyavar and Mohey – which are aimed primarily at the middle class – have seen a deceleration in growth. Even within Vedant Fashions’ portfolio, the company’s newer categories – more of which target the value-conscious buyer – have been “more impacted” by the slowdown.
This trend is also visible in other consumer product categories such as automobiles – where high-end SUVs are selling like hotcakes, but compact cars have slowed, and in personal care, where premium cosmetics are flying off the shelves, mass-market brands selling body lotion and face wash are finding the going rough.
Even for Vedant Fashions, said Modi, “the major impact has actually been in tier two and tier three [cities]. Even in cities where we have good presence..we have still felt that the overall number of consumers walking in was slightly lower.” Things, he added, continue to look “relatively soft” in January and not “as per overall expectations”.