Industry, E-commerce
Amazon vs. Meesho: The intensifying battle
Is buying on Amazon actually cheap? Probably not. ‘Branded’ Fashion and ‘Value’ fashion are two complete different segments. But when you are among the market leaders in one, who wouldn’t want to quench thirst by taking a share of the other segment?
Is buying on Amazon actually cheap? Probably not.
India is indeed a super price-sensitive market as highlighted by Dara Khosrowshahi (CEO, Uber) and the relative higher pricing of Amazon led to multiple new players in the ecosystem such as Meesho, AJIO.com, etc.
That said it’s important to note that ‘Branded’ Fashion and ‘Value’ fashion are two complete different segments. But when you are among the market leaders in one, who wouldn’t want to quench thirst by taking a share of the other segment?
Let’s first take a step back and understand the marketshares in Indian e-commerce context:
- Flipkart 48%
- Amazon- ~25% (say what?)
- Meesho at a formidable ~10% (surprising!!), though by order volumes, it’s 20%+
Meesho is also the highest growing e-com player!
Meesho has revolutionised the way small and unbranded sellers reach their customers. Especially with zero commission it’s driving value-driven commerce primarily by dominating Tier 2 & 3 cities.
Flipkart had launched in this space vigorously some time back with the advent of Shopsy to attack this front.
This leads us back to Amazon’s story in India.
Amazon’s strategy in India has always been a premiumization push. It wanted to cater to the urban brand conscious consumer and create loyalty through excellent customer experience and super fast deliveries. But this approach seems to not completely lie with its growth plans, unfortunately. AB Bernstein’s recent report suggested that Amazon India grew only by 13% YoY! This probably is leading Amazon to suit up for a new journey.
Amazon, is set to venture into a new market segment — low-priced fashion and lifestyle — with the launch of Amazon Bazaar, targeting the Indian value customer. Amazon Bazaar has initiated the onboarding process for sellers, urging them to list unbranded fashion and lifestyle products, including apparel, watches, shoes, jewellery, and luggage, priced below ₹600.
This will lead to a market grab between multiple players, which is currently being dominated by Meesho.
Flipkart’s standalone app Shopsy and AJIO.com’s Street (which was quietly launched) are also currently vying this market. Unlike Shopsy which is more independent, Amazon Bazaar plans to have a more integrated approach with its core platform. These would be a bit different from core marketplace, not just based on the pricing point but on delivery as well, which experts estimate would be more around 2–3 day deliveries.
From a macro standpoint though, Amazon has mentioned that it would invest about $2.3 billion in its e-commerce operations in India by 2030, a far lower budget than its rival Flipkart. Amazon is instead doubling down on Amazon Web Services (AWS) in India and plans to deploy $12.7 billion in the cloud business in the country by 2030- interesting strategy for sure, after all noone has unlimited resources and has to prioritize at the end of the day.
