India’s richest man targets fashion e-commerce with low-cost model
Reliance Industries, headed by India’s richest man, Mukesh Ambani, is gearing up to deploy a winning strategy from its past for the fashion market: low-cost products.
Ajio, the fashion retail arm of Reliance, has quietly launched Ajio Street. The platform offers a huge selection of clothes and accessories, starting at as low as 199 Indian rupees ($2.4). According to Ajio’s website, Street guarantees the “lowest price” for its offerings, waives delivery charges and promises a simple returns process.
The previously unreported Ajio Street rollout coincides with a confirmation from Shein, a dominant player in the global economy fashion market from China, that it has partnered with Reliance to reestablish a presence in the lucrative Indian market. .
The focus on affordability is key to capturing market share in India’s fashion industry, analysts say, citing the region’s notoriously price-sensitive consumers.
India’s Economic Times newspaper reported last month that Reliance plans to target consumers in small Indian towns with Ajio Street. The newspaper also said that Street will operate on a commission-free model, which means sellers will not pay any commission to the platform in an effort to gain quick breakthroughs.
Reliance’s plan also puts Ajio Street in direct competition with SoftBank and Prosus-backed Meesho, which specializes in selling low-cost longtail fashion items and accessories.
Ajio, launched in 2016, currently controls more than 15% of the fashion e-commerce market in India, according to wealth management and research firm Bernstein. Flipkart, which owns fashion giant Myntra, dominates the category with over 60% market share, while Amazon retains around 20% market share.
For Reliance, deploying an affordability-driven approach to lead the market has been a longstanding strategy. This was particularly evident in the previous decade, when the company dramatically shook up the Indian wireless industry with the introduction of Jio – offering free voice calls and reduced data rates. With a subscriber base now exceeding 430 million, Jio now dominates the telecommunications industry in the South Asian market.