Back in 2016, Amazon and Flipkart were synonyms for e-commerce in India. In the fashion apparel segment, Myntra and Jabong, along with Flipkart, were the primary giants, and it looked like there was no room for another player. Then in April 2016, at the Lakme Fashion Week, Reliance – India’s most prominent corporate giant by revenue – announced its big foray into fashion e-commerce with AJIO. Most experts assumed the fashion e-commerce platform to be more of a trial into the industry, but Reliance had other ideas.

AJIO offers a great variety of popular fashion products at immensely competitive prices. The brand sticks to its promise of delivering unique trending styles to buyers. The platform has now emerged as the ultimate fashion destination for millions of Indians and shoppers.

Additionally, the e-commerce fashion segment of Reliance offers tough competition to giants like Amazon, Myntra and Flipkart, all thanks to the business model it has adopted.

If you’re wondering about the business model that no other corporate firm could execute in India, but AJIO did successfully, this will answer all your questions.

What is the Business Model of AJIO?

Reliance opted to follow the path designed by Alibaba – China’s leading e-commerce marketplace. Both of the brands follow the O2O model for doing their business. But what exactly is the O2O model, and how did it help AJIO become a huge success? Let’s find out.

What is the O2O Business Model?

Online-to-offline (O2O) business model is a framework designed primarily for the better growth of businesses operating offline. Additionally, this business strategy will enable huge opportunities for your business in the digital market so that you can utilize them for the good. O2O model is also called the click-to-brick model. The prior focus is always on the marketing of the physical stores on online marketplaces to help customers discover local businesses.

E-commerce businesses planning to use the O2O model can create their website with the help of which they can market their offerings. Still, the cost could be varied. You could share your product’s tentative price and ask the customer to visit the showroom to make a purchase personally.

In this way, you add the chances of conversion via your store and add the value of digital growth in your cart.

How does the AJIO Business Model Function?

AJIO leverages the O2O business model by creating a marketplace where local businesses can connect and market their products. As per the predefined eligibility criteria, you could verify the eligibility for your business and then list your products on the marketplace. Interested and relevant buyers will then be able to can check your product listings, make inquiries, book orders and collect orders offline.

The traders registered with AJIO could take orders online and deliver the same both offline and online. Are you wondering how can the delivery be offline through an online platform? Interestingly, AJIO also allows in-store pickup so that consumers can cross-check the products, customise them for their comfort, and sellers can establish great relationships with their customers. Additionally, this cuts down the waiting period of delivery and improve sales. Online payment being the primary feature, customers can now initiate convenient payments. 

What Are the Benefits of the AJIO Business Model?

The Reliance e-commerce business model aims to empower physical stores and understand the power of online shopping to flourish. Online marketing comes in handy and is effective compared to conventional marketing. Deploying this model is also beneficial for your business as you multiply sales options. If you already have an offline business – there’s no need to worry about the online companies but rather work in sync with the innovative technology.

  • The O2O business model successfully grabs the anticipated traction of online customers to your offline or physical stores, which will surely enhance your business reach.
  • These days, several businesses have been adopting in-store pickup services at their physical stores. The primary benefit is that you are likely to save the delivery costs of your business.
  • The O2O model gives the customers enough time and choice to check for the products and variants online. This will reduce in-store traffic and let you manage your sales well, especially in the post-lockdown period. Managing customers at your store would be easier for you with a limited rush.
  • The in-store pickup service gives a fair chance to the customer to try and test the product before buying it. Further, it also reduces the rate of product returns and optimises the profit gained from your sales.
  • The O2O model is favourable for companies offering electrical and electronic products. When they are checking online through the marketplace, there are options to compare the best, and by purchasing offline, customers can claim servicing and post-installation services.

Growth of AJIO

Today, AJIO has also started creating its presence in the luxury market niche. AJIO is consistently cracking amazing deals. For example – contracts with luxury brands like Superdry, Dune London GAS, Steve Madden and many more. All thanks to huge contracts with brands like these, AJIO offered deep discounting last year that enabled the platform to see a 78 per cent year-on-year growth and continues this practice to ensure that the platform is successful.

What Lies Ahead?

AJIO serves pan India, expanding rapidly over the next few months. It will be leveraging Reliance Trends for an omnichannel approach which will open up many opportunities to innovate on delivery solutions and service levels going forward.

The platform has been built keeping the future scale and performance expectations of consumers in mind. With this foundational platform, strong engineering team, and Reliance JIO and Retail technology ecosystem being leveraged – AJIO is looking to expand and evolve at a rapid pace and would be making consumer experience more personalised, channel-agnostic and experiences that bring best of both offline and online world together.

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