Amazon sets up Bazaar to sell unbranded, low value items in India

Under Bazaar, Amazon is proposing a zero referral fee to merchants, which is vital for products which have low average selling prices (ASPs).

E-commerce giant Amazon has finally launched Bazaar, the destination for low-priced, unbranded fashion items and lifestyle products for value customers, the landing page of the app revealed. With the launch, the Seattle-based company will directly compete with SoftBank-backed Meesho.

So far, Amazon was focusing on the metro cities and Tier 1 regions in India, but with Bazaar it will now tap customers in the Rs 600-and-under vertical as e-commerce penetration picks up in the country. The cohort of value customers is currently dominated by Meesho, as per analysts at Bernstein, but Amazon wants to take a stab at it and widen its reach.

Amazon Bazaar will also compete with Flipkart’s Shopsy. The platform will largely sell unbranded products, including apparel, watches, shoes, jewellery, and luggage that are priced below Rs 600, the company had told merchants earlier.

"We continue to invest and innovate on behalf of our customers and third-party sellers and are excited to introduce the Amazon Bazaar storefront on Amazon.in where customers can discover and shop ultra-affordable fashion and home products listed by sellers, especially from manufacturing hubs across India," an Amazon India spokesperson said in response to Moneycontrol's queries.

Under Bazaar, Amazon is proposing a zero referral fee to merchants, which is vital for products that have low average selling prices (ASPs). Amazon, which is also known for its fast deliveries, will 'slow down' deliveries from Bazaar for the cost economics to work out better.

The move to launch Bazaar is an attempt to capture the Indian value customer segment, as demand for mass-market products slows. Amazon’s move is also understandable because its user growth was only 13 percent in December 2023, mainly because of its more premium offerings compared to its peers, analysts at Bernstein said.

While it aims to grab a bigger piece of the e-commerce pie, incumbents will pose a challenge.

“...Meesho (is) gaining incremental GMV (and) continues to make strides. Meesho has been gaining share primarily through its strategic focus on Tier 2+ cities due to its mass positioning, operating through a zero commission model,” the Bernstein report added.