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Despite the gradual rise in sales curve of a host of premium products from cars to phones to apartments, India is still an extremely price-conscious society, a fact which has been recently again highlighted by Amazon’s decision to launch a new vertical to peddle unbranded, low-priced, lifestyle and fashion items, The Economic Times reported. The US ecommerce giant’s quest for the Indian value customer seems to be fuelled by decline in sales in the mass market and its own growth.

Christened Amazon Bazaar the latest initiative has started enlisting sellers. The company is asking these sellers to pitch for unbranded products in the category of shoes, apparel, watches, luggage and jewellery – all carrying a price tag of less than Rs 600.

This huge segment is getting crowded gradually. Flipkart’s Shopsy, Meesho, Ajio Street are already busy in this value-conscious segment.

In early February, Amazon has injected Rs 830 crore in its India business. It also put Rs 350 crore into Amazon Pay, its payments business.

“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,” read a document from Amazon to sellers.

However, the buyers of this segment will have to wait longer than customers labelled as Prime members. It might stretch to two-three days, the report said quoting anonymous officials. “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 officials.

Amazon is reportedly asking for zero referral fee to merchants. It is crucial for products with low average selling price. The average selling price of Meesho ranges between Rs 300 and Rs 350. It also charges zero commission model. The revenue source is the advertisement and logistics services to the sellers.

A policy that separates Meesho from ecommerce majors such as Amazon and Flipkart is that the former doesn’t own and run warehouses and logistics.

That Meesho’s strategy is paying off is acknowledged by independent experts. Satish Meena, an ecommerce analyst and advisor at Datum Intelligence told the newspaper, “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. Amazon Fashion is not like Myntra… They never got it right in India and this would be another attempt.” He added that categories such as homecare cannot operate on the high commission structure. His logic is that Amazon has to focus on new users is the company has to grow further in this country.

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

A report from research firm Bernstein published in January stated that Amazon India registered only 13% user growth in December 2023. It pinned lacklustre performance on offering more premium items than its competitors. offerings than peers. Bernstein also said that Flipkart and Meesho enlisted 21% and 32% more users respectively in the same time window.

In 2022, Amazon bought social commerce startup Glowroad which is focused on women. It focuses on resellers. “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,” an executive at one of the top brand aggregators told the newspaper. Incidentally, Amazon is also facing stiff competition in the US from Chinese online retailers Shein and Temu in segments such as low-priced clothes and home goods segments.

Amazon has another headache. It has begun discussion with sellers in order to achieve delivery of some products a few hours, something that has become necessary due to the onslaught of the quick commerce platforms such as Blinkit, Zepto or Instamart. However, the discussion to go hyperlocal is at a nascent stage.

Competition is intense even on the delivery aspect. Amazon’s competitor Flipkart has announced it will launch same-day delivery in 20 cities.