Amazon Goes Budget-Friendly: Launches "Bazaar" for Unbranded Products in India

SUMMARY

Amazon launches "Amazon Bazaar" in India, an unbranded and budget-friendly product section on its Android app. This targets price-conscious consumers in Tier-II, III cities and beyond with products like apparel, shoes, and luggage all under INR 600. This move aims to compete with Meesho and Flipkart's Shopsy in the low-cost e-commerce space.

The launch reflects Amazon's adaptation to the growing Indian e-commerce market, particularly in Tier-II+ cities where budget-friendly options like Meesho (32% YoY growth) and Flipkart's Shopsy (21% YoY growth) are thriving. With the Indian homegrown e-commerce market projected to reach $400 billion by 2030, Amazon's entry into this value segment is likely to heat up competition and offer more affordable online shopping options for Indian consumers.

E-commerce giant Amazon has taken a significant step towards capturing a larger share of the Indian market with the launch of its new vertical, "Amazon Bazaar." This initiative marks Amazon's foray into the unbranded and budget-friendly product segment, targeting price-conscious consumers in Tier-II, III, and beyond cities.

Bazaar: Targeting Value-Conscious Customers

Currently available on the Amazon India Android app, Bazaar offers a wide range of unbranded products across categories like apparel, watches, shoes, jewelry, and luggage, all priced under INR 600. This strategic move positions Amazon to directly compete with established players like Meesho and Flipkart's Shopsy, both known for their pocket-friendly offerings.

Expanding Reach and Seller Network

By catering to budget-conscious customers, Amazon is strategically aiming to acquire new users and diversify its product offerings. The company plans to list products on Bazaar from sellers across India, particularly from manufacturing hubs. This strategy has the potential to expand Amazon's reach and establish stronger connections with local manufacturers.

Competition in the Budget E-commerce Segment

The launch of Amazon Bazaar intensifies competition within the low-cost e-commerce space in India. SoftBank-backed Meesho and Flipkart's Shopsy have already established a strong presence in this segment, offering similar value-driven product selections.

Data Reveals Growth in Tier-II+ E-commerce

This development aligns with the booming e-commerce landscape in India, fueled by affordable internet access and increasing smartphone penetration. A recent report by AllianceBernstein highlights the growing traction of e-commerce platforms in Tier II+ markets. The data reveals that Meesho and Flipkart, with their focus on budget-friendly products, witnessed impressive year-on-year growth (32% and 21% respectively) in these markets as of December 2023. Meanwhile, Amazon's user base growth lagged behind at 13%, potentially due to its focus on a slightly more premium product range compared to its competitors.

Future of E-commerce in India

The launch of Amazon Bazaar reflects Amazon's strategic adaptation to the evolving Indian e-commerce landscape. With the homegrown e-commerce space projected to reach a staggering $400 billion by 2030, catering to value-conscious consumers is becoming increasingly important for success. Amazon's entry into this segment is likely to further accelerate competition and provide Indian consumers with a wider array of affordable online shopping options.