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

Reliance Industries, run by India’s richest man Mukesh Ambani, is preparing to implement a winning strategy from its past playbook for the fashion market: low-cost products.

Ajio, the fashion retail arm of Reliance, has quietly launched Ajio Street. The platform boasts a huge selection of clothing and accessories, starting at just 199 Indian rupees ($2.4). According to Ajio’s website, Street guarantees the “lowest price” for its offerings, waives shipping fees, and promises an easy returns process.

THE Ajio Street roll-outwhich has not been previously reported, coincides with a confirmation from Shein, a dominant player in the global market for affordable fashion from China, which has partnered with Reliance to re-establish a presence in the lucrative Indian market.

An emphasis on convenience is key to winning market share in India’s fashion industry, analysts said, citing the region’s notoriously price-sensitive consumers.

reliance ambani ajio street

Via Ajio website. (screen capture)

The Indian newspaper Economic Times reported last month Reliance 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 won’t pay any fees to the platform in a move to quickly earn inroads.

Reliance’s plan also puts Ajio Street in direct competition with SoftBank and Prosus-backed Meesho, which specializes in selling low-cost longtail fashion and accessories.

Ajio, launched in 2016, currently controls more than 15% of India’s fashion e-commerce market, according to wealth management and research firm Bernstein. Flipkart, which owns fashion giant Myntra, dominates the category with more than 60% market share, while Amazon has about 20% of the slice.

For Reliance, implementing an accessibility-oriented approach to achieve market dominance has been a long-standing strategy. This was startlingly evident in the previous decade when the company drastically shook up the Indian wireless sector with the introduction of Jio, offering free voice calls and slow data speeds. With a subscriber base now exceeding 430 million, Jio now dominates the telecom industry in the South Asian market.

Bernstein sees Reliance as the eventual linchpin of Indian e-commerce

Reliance JioMart cuts 1,000 jobs and eliminates thousands more, the report said