Amazon is set to take on Meesho with its Amazon Bazaar

Amazon is set to take on Meesho with its Amazon Bazaar
Amazon is set to take on Meesho with its Amazon Bazaar

by Tanushree Jaiswal Last Updated: Mar 04, 2024 - 07:43 pm 801 Views
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The battle of the giants in Indian e-commerce is heating up as Amazon is set to challenge local favorites like Meesho and Flipkart's Shopsy with its latest venture, Amazon Bazaar. 

In a bid to tap into the burgeoning market of value-conscious consumers, the global giant Amazon is set to disrupt it with its new venture. 

Understanding the Current Landscape

You see, Amazon has been losing the e-commerce game in India as in 2023, Flipkart held a dominant position in the Indian e-commerce realm, boasting a market share of 48%, closely followed by Meesho at an impressive 32%. 
In contrast, Amazon found itself trailing behind with a modest 13% share. 

The rise of Meesho, in particular, signifies a paradigm shift in the market, driven by its innovative reseller-led zero commission model which caters to small-scale sellers and value-driven consumers, especially in Tier 2 and Tier 3 cities in India.

Amazon's Premiumisation Predicament

Initially, Amazon's strategy in India was centered around premiumization and lightning-fast delivery, targeting a specific urban demographic. 

However, this approach inadvertently left out a significant chunk of price-sensitive consumers in Tier 2 and Tier 3 cities. 

Moreover, Amazon's commission structure which went up to 25%, led to inflated prices for customer. Due to which it missed out on the price sensitive audience in India

Enter Amazon Bazaar: A Game-Changing Move

Recognizing the need to cater to the price sensitive Indians , Amazon is set to launch "Amazon Bazaar," a marketplace tailored to cater to the value-conscious segment. 

Drawing inspiration from Meesho's zero-commission model, Amazon Bazaar aims to democratize online shopping by offering competitive prices and a diverse selection of unbranded products. 

This launch of Amazon Bazaar will change the entire e-commerce landscape in India.

Key Implications of Amazon Bazaar

Leveling the Playing Field: By doing away with the seller commissions, Amazon Bazaar will offer products under 600. By offering everything at dirt cheap prices, the global giant is challenging Meesho and Shopsy's dominance in the value-driven market.

Appealing to the Value-Conscious Consumer: With a focus on affordability and a wider product range, Amazon Bazaar aims to attract consumers in Tier 2 and Tier 3 cities, a demographic that has thus far eluded its grasp.

Capitalizing on Brand Trust & Logistics: Amazon has established its brand reputation and has a robust logistics network already in place. Which would provide it a competitive edge over pure social commerce players like Meesho.

Key Features of Amazon Bazaar

Zero Referral Fee: As discussed above, Amazon is going the Meesho style and is  proposing a zero referral fee for merchants, due to which the selling price on the platform would decrease. This move aligns with Meesho's zero-commission model which caters to price-sensitive consumers.

Focus on Affordability: With delivery timelines of two to three days, Amazon Bazaar prioritizes affordability over speed, catering to the typical Meesho customer demographic in Tier 2 and Tier 3 cities.

Diversification of Product Range: By offering a diverse range of unbranded products, Amazon Bazaar aims to appeal to a wider customer base, challenging the dominance of Meesho and Flipkart's Shopsy in the value-driven segment.

“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.

Navigating the Competitive Landscape

Amidst intense competition and slowing user growth, Amazon's foray into the value segment marks a strategic shift aimed at reigniting growth and expanding its reach in India. As the battle for market dominance intensifies, Amazon's emphasis on affordability and accessibility through Amazon Bazaar sets the stage for a dynamic e-commerce ecosystem in India.

In a statement to ET, Satish Meena, an independent ecommerce analyst and advisor at Datum Intelligence said, 
“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.” 

The Future of Amazon in India

With Amazon Bazaar poised to disrupt the market, the future of e-commerce in India is poised for transformation. As Amazon adapts its strategy to cater to the evolving needs of Indian consumers, the stage is set for a thrilling journey ahead in the world of online shopping.
 

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About the Author

Tanushree is a seasoned professional with 6 years of experience in the Fintech and Edtech industry.

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