Amazon Dives into Affordable Fashion with Launch of Amazon Bazaar in India

In a strategic move reported by the Economic Times, U.S. e-commerce giant Amazon is expanding its reach into the low-priced fashion and lifestyle segment with the introduction of Amazon Bazaar. This bold step is aimed at capturing the Indian value customer market amidst a slowdown in mass-market product demand and a deceleration in Amazon's growth.

Amazon Bazaar has commenced the onboarding process for sellers, encouraging them to list unbranded fashion and lifestyle products, spanning apparel, watches, shoes, jewelry, and luggage, all priced below ₹600. According to reports citing Amazon's communication to merchants, Bazaar is a new store on the platform that allows sellers to offer their fashion and lifestyle products online without additional charges, promising enhanced profitability.

In this market segment, Amazon Bazaar will face competition from notable players such as SoftBank-backed Meesho and Flipkart's Shopsy, operating through a separate app. Additionally, Mukesh Ambani's Reliance Industries is actively developing its low-priced platform, Ajio Street.

Amazon Bazaar is set to deviate from its typical fast delivery proposition for Prime members by aiming for delivery timelines of two to three days. The company is also planning to provide a zero referral fee to merchants, a critical incentive for products with a low average selling price.

A recent report from research firm Bernstein highlighted Amazon India's modest 13 percent user growth in December 2023, trailing behind competitors Flipkart and Meesho. In response to this competition and to regain growth momentum, Amazon is adapting its strategy in India. Challenges from Meesho, particularly in fashion and homecare segments, have prompted strategic adjustments.

To attract merchants to Amazon Bazaar, the proposed zero referral fee and no closing fee for the Easy Ship service are key components of the platform's appeal. Following a year-long hiatus, Amazon has injected ₹830 crore into its India marketplace entity and ₹350 crore into Amazon Pay, signaling a renewed focus on growth in the Indian market.

Globally, Amazon faces intense competition, notably from Chinese online retailers Shein and Temu in the United States. In response, the e-commerce giant is exploring hyperlocal delivery options and engaging in discussions with brands and sellers to provide faster delivery, especially for homecare and non-grocery daily items categories.