🛍️ Ajio Street: The Jio of Fashion?
A new revolution now coming to the world of e-commerce and fashion? ReadOn!
India had its own Met Gala recently, organised by our very own Ambanis.
Yes, the Nita Mukesh Ambani Cultural Centre (NMACC) launch has been making all the memes on the internet.
Just when people were done with scrolling memes and have returned back to their normal lives, Mr. Ambani has yet again made BIG headlines.
Yes, the man wants to be in the spotlight ALL THE TIME!
This time, he’s set to disrupt the fashion space by launching Ajio Street.
The best part? Ajio Street will directly compete with Meesho!
Woah, how does it plan to do that? And why now?
Sit back and read on!
🕵️♀️ Decoding Ajio Street
Ajio, Reliance’s online fashion marketplace, is one of the leading fashion e-commerce platforms in India.
But, it has been positioned as a premium brand with a lot of glitz and glamour (to be fair Ajio does have affordable options as well, but it is better known for its premium brands).
And this glamour may be limiting its target market.
After all, not everyone can afford premium products.
Where do those users go?
More affordable platforms like Meesho.
Yes. Ajio’s loss is Meesho’s win.
It is targeting the mass of India, Middle India.
Look at any Meesho haul on social media, the prices are going to shock you!
Meesho can offer these prices because it doesn’t take any commission from sellers and resellers.
Win-win for everyone, right?
Ajio thought ‘why not copy this masterplan?’
And well, Reliance does not have a blanket copy-paste formula.
It always adds some masala, and some innovation in its plan. So, it isn’t changing what Ajio does.
It is reportedly planning to create a new space within the app called Ajio Street.
With no commission from sellers!
Now, these plans are not yet final.
But if they do come to life, it would be a boon for Middle India.
♟️Reliance’s Move = Middle India’s Victory
Whenever RIL decides to disrupt a sector, it's us who wins.
RIL’s foray into affordable shopping will not only be great for customers but also for retail sellers.
India’s online shopper base is set to be 400-450 million by 2027.
To cater to this growing demand, a lot of retail sellers would also have to come online as well.
Their major problem: the commissions charged by marketplaces.
With Ajio Street, they could have not just one but two commission-less platforms, which will help increase their reach.
And what’s in it for Reliance?
🏆 How Reliance Wins
As we said before, Reliance is targeting Middle India with Ajio Street.
And this space is piping hot.
3 in 5 new shoppers in 2021 were from small towns and cities, where the spending capacity is usually lower than in metro cities.
Plus, with low-priced products, Ajio Street could also convert non-shoppers into online shoppers.
More than 40% of new shoppers bought fashion in their first online purchase, and the average selling price (ASP) for items bought by new shoppers was 20% lower than for existing shoppers.
So, Ajio wants to make the whole pie larger instead of capturing a larger slice.
Now, we know what you’re thinking: How will Ajio Street earn money if it does not charge commission?
Simple: through ads or fulfilment services.
You see, many sellers find it difficult to handle the logistics of e-commerce. Ajio Street could handle this for them and charge for such services.
In fact, 90% of Meesho’s revenue comes from such fulfilment services!
So, now that we’ve discussed everything about this upcoming disruptor, let’s look at why the timing for this seems perfect.
⌚ Why the Timing is Perfect!
Well, well, well.
RIL sure does know how to strike the iron when it is hot!
The reports about Ajio Street have come at a time when Meesho is trying to reduce its cash burn.
The social commerce app burnt $40 million per month at one point to compete with the biggies like Amazon and Flipkart.
But since startup funding is drying up, Meesho wants to save money and has reduced its burn to $5 million per month.
Now, less money means fewer ads and fewer discounts.
Result? Slower growth.
Now, Meesho’s loss could mean Ajio’s gain.
Sellers and customers may swiftly switch to Ajio Street in the lure of discounts.
Genius award of the year goes to…
*drumroll*
Reliance (no brownie points for guessing this)!
But, hey.
A genius plan needs genius execution.
Brand positioning, customer and seller experience, logistics, everything needs to be top-notch for Reliance to make this big.
Will Reliance be able to make Ajio Street the Jio of Fashion? And will you try out Ajio Street?
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Adding to existing jio app would cause it to loose brand value, like people know meesho is cheap rehri clothing, myntra has more brand value. People are very conscious of image, then people will banter like -🤣 lagta hai ajio se liya hai. Ye myntra se liya hai. These platforms are itself becoming brands and inn future will become, like if purchased from myntra means brand clothing, from ajio means cheap clothing. Seeing a courier coming from Ajio will be shameful from myntra would be prestige. Only good if myntra makes the same mistake but atleast they are calling it everyday clothing. Saying street clothing itself is degrading.
mukesh uncle kar lege