Amazon is gearing up for a new strategy to compete in India’s rapidly growing fashion and lifestyle e-commerce market. The multinational company is ready to face off against its rival Flipkart, owned by Walmart, as well as other competitors such as Reliance’s Ajio and SoftBank-backed Meesho.
According to a communication sent to its partners, Amazon is planning to launch a new “special store” called Bazaar. This store will not charge additional fees to sellers who offer unbranded and trendy fashion and lifestyle products. In fact, all items sold through Bazaar will be priced under 600 Indian rupees, or $7.2.
In their communication, Amazon states, “Your products will be featured in a special store on Amazon, making them easy for customers to find.” Bazaar will offer sellers the opportunity to reach millions of customers, with hassle-free delivery and zero referral fees.
As reported by TechCrunch, Amazon has recently been focusing on fast fashion and plans to expand its efforts in this area.
The Indian daily Economic Times also reported on Bazaar, stating that Amazon aims to provide two to three days of delivery for this new venture.
The fast-fashion e-commerce space in India has seen significant growth as local startups draw inspiration from global pioneers like Zara, H&M, and Uniqlo. While Flipkart remains the top player in this category, it faces fierce competition from Ambani’s Ajio, which holds a 30% market share according to research firm Bernstein.
Ajio quietly introduced Ajio Street last year, offering a wide range of clothing and accessories starting at just 199 Indian rupees ($2.4). This new venture guarantees the lowest price for its products, waives delivery fees, and promises an easy returns process, as stated on their website.
Global fast-fashion leader Shein, which was previously banned in India, has announced plans to make a comeback with a joint venture with Reliance, as revealed last year.
The analysts at Bernstein note that Ajio, owned by Reliance, has been gaining users and currently holds a 30% market share based on active users. However, Myntra still holds the highest market share in terms of active users with more than a 50% share. In December 2023, Myntra experienced the highest growth rate among its peers at 25%. However, a closer look at the business reveals that users on the app are not transacting as much as before. Myntra’s GMV only grew by 12% in fiscal year 2023, compared to 35% in fiscal year 2022.
With an extremely fragmented offline fashion market, the online market is following suit with multiple players emerging to claim their share. Nykaa Fashion, which experienced a 23% year-over-year growth rate in December 2023, its highest since May 2022. This was due to product and technology improvements, as well as a premium product offering. Meanwhile, Ajio has maintained its growth rates above the industry average, with a 22% year-over-year growth in monthly active users in November 2023. However, Urbanic, which saw a surge in users after Shein’s ban, failed to sustain its growth due to poor user experience and inefficient return policies.
Bazaar is one of the key new initiatives from Amazon, which has invested over $7 billion in India. This comes after the company shut down its wholesale distribution, food delivery, and online learning businesses in India in late 2022. Last year, Amazon announced plans to invest $2.3 billion in its e-commerce operations in the country by 2030, a significantly lower budget than its rival, Flipkart. Instead, Amazon is focusing on doubling down on AWS in India and plans to invest $12.7 billion in the cloud business by 2030.
