Reliance Industries, led by India’s richest man, Mukesh Ambani, is preparing to deploy a winning strategy from the previous playbook for the fashion market: low-cost products.
Ajio, Reliance’s retail fashion arm, has quietly launched Ajio Street. The platform offers a vast selection of clothing and accessories starting at a price of just 199 Indian Rupees ($2.4). According to Ajio’s website, Street guarantees the “lowest price” on its listings, waives delivery charges and promises an easy returns process.
The rollout from Ajio Streetpreviously unreported 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 re-establish a presence in the lucrative Indian market.
An emphasis on affordability is key to capturing 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 that Reliance plans to target consumers in smaller Indian cities and towns with Ajio Street. The newspaper also said that Street will operate on a no-commission model, meaning merchants will not pay a commission to the platform to gain quick access.
Reliance’s plan also puts Jio Street in direct competition with SoftBank and Prosus-backed Meesho, which specializes in selling low-cost long-tail fashion and accessories.
Launched in 2016, Ajio currently controls more than 15% of the fashion e-commerce market in India, according to asset management and research firm Bernstein. Flipkart, owner of fashion giant Myntra, dominates the category with over 60% market share, while Amazon holds about 20% of the segment.
For Reliance, deploying an affordability-based approach to achieve market dominance has long been a strategy. This was strikingly evident in the last decade, when the company dramatically shook up the Indian wireless sector with the introduction of Jio – offering free voice calls and reduced data rates. With a subscriber base of over 430 million, Jio now dominates the telecommunications industry in the South Asian market.