Reliance Industries’ online fashion retail platform Ajio is in advanced stages of setting up a new marketplace for low-priced fashion items which will work on zero commission models.

Reports suggest that new proposition from Reliance being called Ajio Street and merchants are being asked to onboard the platform with a promise of 15-days payments settlement.

This would make Reliance Ajio – which competes with Flipkart-owned Myntra, Amazon Fashion and Tata Cliq – a direct competitor to SoftBank and Fidelity-backed etailer Meesho, which specialises in low-cost longtail fashion and accessory products, as well.

Longtail items are difficult-to-find products unlike commonplace items such as electronics and smartphones.

Industry analysts and executives said the move from Reliance is worth noting as it has been positioning itself as the destination for branded fashion goods.

According to reports, Ajio Street is likely to have a separate space on the Ajio platform and app, offering affordable value products mainly aimed at non-metro consumers in tier II-tier IV cities and towns.

Ajio, is also hoping the zero-commission model can increase its user base by tapping into the new set of consumers from these markets who may not be shopping online frequently.

In a zero commission model, sellers do not have to pay any commission to a platform. Ecommerce platforms, in such cases, try to generate money through either ads or via fulfillment services.

It is not immediately clear how exactly Ajio plans to monetize the vertical, but sources said the idea is to scale this business and acquire new users.

“I think they are expanding into this space because they want to achieve scale and be the number one player. The bigger pie lies in the smaller cities and the market size is bigger in the mass segment,” says Ashish Dhir, EVP (consumer and retail) at market research firm 1Lattice, earlier known as PGA Labs.