Reliance Industries, led by India’s richest man Mukesh Ambani, is preparing to execute a winning strategy from its previous fashion market strategy: low-cost products.
Ajio, Reliance’s fashion retail division, quietly launched Ajio Street. The platform offers a wide range of clothing and accessories, starting at a price of just 199 Indian rupees (US$2.4). According to Ajio’s website, Street guarantees the “lowest price” for its offerings, waives shipping costs and promises a hassle-free returns process.
The Introduction of Ajio Streetpreviously unreported coincides with a confirmation from Shein, a Chinese-based dominant player in the global budget fashion market, that the company has partnered with Reliance to re-establish its presence in the lucrative Indian market.
The emphasis on affordability is key to gaining market share in India’s fashion sector, analysts say, citing the region’s notoriously price-sensitive consumers.
The Indian newspaper Economic Times reported Last month, Reliance announced that it plans to target consumers in smaller Indian cities and towns with Ajio Street. The newspaper also said that Street will operate on a zero commission model, meaning sellers will not pay any commission to the platform for quick wins.
Reliance’s plan also puts Jio Street in direct competition with SoftBank and Prosus-backed Meesho, which specializes in selling low-cost longtail fashion and accessories.
Founded in 2016, Ajio currently commands over 15% of the fashion e-commerce market in India, according to asset management and research firm Bernstein. Flipkart, which owns fashion giant Myntra, dominates the category with over 60% market share, while Amazon retains about 20% of the market share.
For Reliance, implementing an affordability-focused approach to market dominance is a long-standing strategy. This was clearly visible over the past decade, when the company dramatically shook up the Indian mobile sector with the launch of Jio – an offer of free voice calls and cheaper data rates. With a subscriber base now in excess of 430 million, Jio now dominates the telecom industry in the South Asian market.