The Real Economics of Zero-Commission E-commerce
October 21, 2026
India’s festive e-commerce season is increasingly becoming a battle for affordability.
Platforms are reducing seller commissions, expanding lower-priced assortments and attempting to attract a broader base of value-conscious consumers. At the same time, rising prices in categories such as smartphones and electronics are encouraging marketplaces to seek growth from a wider mix of categories including fashion, home products and everyday purchases.
In a recent Mint report, Nabodita Ganguly and Salman S.H. examine how leading platforms are leaning into affordability and value commerce as a growth strategy.
Providing industry perspective, Ravindra Yadav, Partner at The Knowledge Company (TKC), noted:
“The strategy is to reduce commissions and increase revenue from the supply chain and advertising. It is exactly what Meesho had done earlier. They are replicating it to see if it works.”
At first glance, reduced commissions may appear to be a direct benefit for sellers. But the larger strategic story is not about removing platform economics. It is about redesigning them.
Zero Commission Does Not Mean Zero Revenue
A common misconception in marketplace economics is that lower commissions automatically imply lower platform revenue.
In reality, digital marketplaces have multiple monetization levers.
These can include:
Commission income is only one part of the broader revenue model.
As marketplaces compete more aggressively for sellers, reducing commissions can help attract additional assortment, improve seller acquisition and stimulate transaction growth. Revenue can then be partially recovered through other services used by participating sellers.
The objective is not necessarily to earn less. It is to change where revenue comes from.
Meesho Demonstrated the Model First
The strategy highlighted by Ravindra reflects a broader trend in Indian e-commerce.
Value-commerce platforms such as Meesho have demonstrated that large user bases can be built around affordability, lower average order values and high transaction frequency.
Rather than relying exclusively on commission-led monetization, platforms increasingly benefit from ecosystem participation.
A larger seller network can create:
These dynamics explain why established marketplaces are experimenting with approaches that resemble the value-commerce playbook.
The competition is no longer only about customer acquisition. It is increasingly about seller acquisition and assortment expansion.
More Sellers Create More Competition
Lower commissions can encourage more businesses to participate on marketplaces.
This benefits consumers by increasing product availability and competitive pricing.
However, it also creates a new challenge.
As more sellers enter the system, visibility becomes more difficult to achieve.
The result is a paradox:
This is where advertising becomes strategically significant.
Sellers may save on commissions but ultimately spend more on visibility to stand out within crowded marketplaces.
The commercial conversation therefore shifts from:
“How much commission am I paying?”
to
“How much do I need to spend to be seen?”
Visibility Is Becoming a Marketplace Currency
Digital shelf space has become one of the most valuable resources in e-commerce.
Consumers rarely browse every available option. Instead, they engage with products surfaced through search, recommendations, rankings and sponsored placements.
As seller participation rises, competition for visibility intensifies.
This creates an ecosystem where:
The evolution is similar to many mature digital platforms where attention becomes a monetizable asset.
In such environments, attracting sellers is only the first stage. Monetizing visibility becomes equally important.
Affordability Has Become a Strategic Battleground
The festive season is highlighting another shift in consumer behavior.
As inflationary pressures and rising electronics prices influence purchase decisions, consumers are increasingly seeking value across categories.
This is creating opportunities in:
Platforms are responding by widening assortment and lowering barriers to seller participation.
The goal is simple:
Generate growth from millions of smaller transactions rather than depending exclusively on high-ticket categories.
This approach aligns closely with the broader expansion of value commerce across India.
Trust Remains the Missing Variable
Lower prices and larger assortments may attract consumers.
They do not automatically create trust.
This is where Ravindra’s second observation becomes important:
“The smaller players will spend. But the flip side is whether consumers will have enough confidence in these smaller brands.”
Price can generate trial.
Confidence drives repeat purchase.
For smaller brands entering marketplaces, the challenge is not only being discovered. It is convincing consumers that the product will meet expectations on quality, reliability and value.
That confidence can be built through:
Marketplace visibility can create an opportunity.
Trust converts that opportunity into a business.
What This Means for Sellers
The shift toward affordability creates opportunities, but it also changes what success requires.
Sellers should increasingly evaluate:
Customer Acquisition Cost
How much visibility spending is required to generate sales?
Repeat Purchase Rates
Are customers coming back after the first transaction?
Contribution Margins
Can the business remain profitable after advertising and logistics expenses?
Brand Differentiation
What prevents the offering from becoming a commodity?
Marketplace Dependence
How vulnerable is the business to platform policy changes or competitive bidding for visibility?
These questions matter more than commission rates alone.
#TKCPerspective: The Next Phase of E-commerce Competition
The emerging battle in Indian e-commerce is not simply between Amazon, Flipkart and Meesho.
It is a competition among different marketplace economics.
Some platforms are optimizing for:
Others may continue focusing on higher-value purchases and premium categories.
The winning model will be determined by whether these platforms can balance:
at scale.
From Commission-Led to Ecosystem-Led Growth
The story behind zero commissions is ultimately larger than pricing.
It reflects a broader transition in how platforms create value.
Rather than depending primarily on transaction commissions, marketplaces are increasingly building ecosystems where revenue is generated through logistics, advertising, fulfillment and seller services.
For sellers, lower entry barriers create opportunity.
For consumers, broader assortment creates choice.
For platforms, the challenge is ensuring that greater participation translates into sustainable economics.
As Ravindra Yadav’s observation suggests, the strategy itself is not new. What is changing is the number of large platforms now attempting to make it work.
Are changing marketplace economics reshaping your growth strategy?
Connect with TKC’s Retail & Consumer Goods Advisory team at vidya@tkc.in to discuss marketplace strategy, channel economics, digital commerce and growth planning.
Read the full Mint article:
https://www.livemint.com/industry/retail/ecommerce-platforms-lean-into-affordability-this-festive-season-11790924119456.html
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