ET has additionally seen materials concerning the new proposition from Reliance being referred to as Ajio Street and retailers are being requested to onboard the platform with a promise of 15-days funds settlement.
This would make Reliance Ajio – which competes with Flipkart-owned Myntra, Amazon Fashion and Tata Cliq – a direct competitor to SoftBank and Fidelity-backed etailer Meesho, which specialises in low-cost longtail trend and accent merchandise, as effectively.
Longtail gadgets are difficult-to-find merchandise in contrast to commonplace gadgets equivalent to electronics and smartphones.
Industry analysts and executives mentioned the transfer from Reliance is price noting because it has been positioning itself because the vacation spot for branded trend items.
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People conscious of the corporate’s plans mentioned Ajio Street is prone to have a separate house on the Ajio platform and app, providing reasonably priced worth merchandise primarily aimed toward non-metro shoppers in tier II-tier IV cities and cities.Ajio, they mentioned, can also be hoping the zero-commission mannequin can improve its consumer base by tapping into the brand new set of shoppers from these markets who might not be procuring on-line incessantly.
In a zero fee mannequin, sellers wouldn’t have to pay any fee to a platform. Ecommerce platforms, in such instances, attempt to generate cash via both advertisements or through fulfilment companies.
It just isn’t instantly clear how precisely Ajio plans to monetise the vertical, however sources mentioned the thought is to scale this business and purchase new customers.
An electronic mail despatched to Reliance Retail spokesperson didn’t elicit any response on Ajio Street.
“I think they are expanding into this space because they want to achieve scale and be the number one player,” mentioned Ashish Dhir, EVP (shopper and retail) at market analysis agency 1Lattice, earlier often known as PGA Labs. “The bigger pie lies in the smaller cities and the market size is bigger in the mass segment.”
He mentioned the zero-commission play for unbranded trend merchandise can be a trade-off to its present branding of Ajio.
The low-cost trend and equipment merchandise sometimes have a mean order worth of round Rs 300-350 whereas the identical for platforms promoting branded items can be over Rs 1,000 at the very least, Dhir mentioned. “All said, online fashion is still 15-20% of the total fashion market in India,” he added.
A current report from Bernstein Research mentioned 95% of merchandise offered on Meesho are unbranded and about 80% of sellers are retail business house owners.
“They (Ajio) want to tap into this market opportunity,” one of many individuals conscious of the matter mentioned. “Most branded fashion sales are still driven by top 8-10 cities only. So, Ajio is now planning to try out this model.”
Ecommerce trade executives mentioned Ajio had a gross merchandise worth or GMV of round $2 billion on the finish of 2022, lagging behind solely Myntra.
Ajio’s core market has been high metro cities the place it primarily sells branded apparels, footwear and different merchandise. In the December quarter earnings of Reliance Industries, the corporate had mentioned Ajio had expanded its buyer by 33% and catalogue dimension by 62% 12 months on 12 months. Ajio additionally focuses on Indian and international premium manufacturers.
Source: economictimes.indiatimes.com