Best Fast Dropshipping Service & Business India

Amazon is launching a new vertical featuring low-priced, unbranded fashion and lifestyle products, people aware of the matter said. The US ecommerce giant is looking to aggressively woo the Indian value customer, as demand for mass market products tapers and its own growth loses pace.

Amazon Bazaar has begun onboarding sellers and is asking them to list unbranded products — including apparel, watches, shoes, jewellery and luggage — priced below Rs 600. ET has reviewed the company’s communication to merchants.

The segment has been successfully tapped by SoftBank-backed Meesho, while Walmart-owned Flipkart’s Shopsy (through a separate app) is the other major player in the space. Mukesh Ambani-led Reliance Industries is also working on a low-price platform, Ajio Street.

Bazaar is a new store on Amazon where you can sell your fashion and lifestyle products online at no extra charges, thus making it more profitable to run your business,” a document from Amazon to sellers said.

ASP and Delivery Timelines
According to people aware of the plan, the delivery timelines for Amazon Bazaar products will likely be two to three days, deviating from its fast delivery proposition offered to Prime members. “Consumer cohorts at the lower end of the market typically do not prioritise faster deliveries…They (Amazon India) have lost out on the segment so far and essentially want to tap the typical Meesho customer,” said one of the people cited above.

An email sent to Amazon India did not elicit a response till press time on Tuesday.

Accounting for Price
Amazon is proposing a zero referral fee to merchants, which is key for products with low average selling price (ASP). Meesho’s ASP is Rs 300-350 and it operates on a zero commission model while earning revenue from advertising and offering logistics services to sellers.

Meesho, however, doesn’t own and run warehouses and logistics, unlike ecommerce leaders Amazon and Flipkart.

“Meesho has snapped up market share from Amazon in certain segments like fashion, homecare and others. For Amazon to acquire these users at low ASP segments, they would want to offer a similar product to merchants and consumers,” said Satish Meena, an independent ecommerce analyst and advisor at Datum Intelligence. “Amazon Fashion is not like Myntra… They never got it right in India and this would be another attempt.”

Segments such as homecare and other long-tail categories cannot operate on the high commission structure of incumbent marketplaces, according to the analyst, who feels that “for Amazon to keep growing in India, it needs new users.”

There is also no closing fee for merchants using its Easy Ship service to sell on Amazon Bazaar.

Fighting on Many Fronts
A January report from research firm Bernstein said Amazon India clocked only 13% user growth in December 2023 — primarily due to more premium offerings than peers. Flipkart and Meesho acquired 21% and 32% more users, respectively, in the period, according to the report.

In 2022, Amazon acquired women-focused social commerce startup Glowroad, which focuses on resellers. Like other marketplaces, the ecommerce major has also been experimenting and scaling its live commerce vertical in India — to shore up engagement with consumers.

“Amazon India’s growth has slowed down visibly… The industry has been sluggish, (but) it is more pronounced for them than others…. New offerings are part of a plan to revive growth,” a senior executive at one of the top brand aggregators said.

US’ Amazon is also facing intense competition in its home market, from the likes of Chinese online retailers Shein and Temu (owned by Pinduoduo) across the low-priced clothes and home goods segments. These players have become a threat to the etail giant amid inflation concerns in that country, forcing it to rethink strategies.

Hyperlocal High
Amazon is also in early stages of discussions with brands and sellers to be able to deliver certain products within a few hours, especially in the wake of increasing pressure from quick commerce platforms.

“Talks on hyperlocal are still at an early stage and may take some time,” said one person quoted above. “Segments like homecare and non-grocery daily items are seeing consumers moving to the likes of Blinkit, Zepto or Instamart. The idea is to see if they can deliver some of these products faster.”

Flipkart announced recently that it will operate same-day delivery in 20 cities.

After a gap of more than a year, Amazon infused Rs 830 crore in its India marketplace entity earlier this month. It put Rs 350 crore into Amazon Pay, the payments business, also taking the total to nearly Rs 1,200 crore.

  • Published On Feb 21, 2024 at 09:04 AM IST

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Best Fast Dropshipping Service & Business India

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