Ambani's Reliance targets Indian fashion e-commerce with low-cost model

Ambani's Reliance targets Indian fashion e-commerce with low-cost model
May 2023

Reliance Industries, run by India's richest man Mukesh Ambani, is gearing up to deploy a winning strategy from its past playbook for the fashion market: low-cost products.Ajio, Reliance's retail fashion arm, has quietly launched Ajio Street. The platform boasts a vast selection of clothing and accessories, starting from a price point 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 straightforward returns process.The roll-out of Ajio Street, which has not been previously reported, coincides with a confirmation from Shein, a dominant player in the global budget fashion market hailing from China, that it has partnered with Reliance to reestablish a presence in the lucrative Indian market.The emphasis on affordability is key in capturing market share in India's fashion sector, analysts say, citing the region's notoriously price-sensitive consumers.[photo1]Ajio Street website. (Screen capture)Ajio Street website. (Screen capture)The Indian newspaper Economic Times reported last month that Reliance plans to target consumers in smaller Indian cities and town

s with Ajio Street. The newspaper also said that Street will operate on a zero-commission model, meaning sellers will not be paying any commission to the platform in a move to gain quick inroads.Reliance's plan also puts Ajio Street in direct competition with SoftBank and Prosus-backed Meesho, which specialises in selling low-cost longtail fashion and accessory items.Ajio, launched in 2016, currently commands over 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 is holding on to about 20% of the slice.For Reliance, deploying an affordability-led approach to achieve market dominance has been a longstanding strategy. This was strikingly evident in the previous decade when the company dramatically shook the Indian wireless sector with the introduction of Jio - offering free voice calls and cutrate data rates. With a subscriber base now exceeding 430 million, Jio now dominates the telecommunications industry in the South Asian market.Bernstein pegs Reliance as India's eventual e-commerce kingpinReliance JioMart cuts 1,000 jobs and to eliminate thousands more, report says