Mint Explainer: Why e-commerce firms are trading commissions for market share

On 9 January, Myntra announced the rollout of a zero-commission model in a bid to encourage young direct-to-consumer brands and regional sellers to join the platform. The move is part of the Myntra Rising Stars programme, which was launched in July 2023 to extend onboarding, marketing and discovery support to small-scale brands having a lean budget.

By doing so, Myntra is slowly following the footsteps of listed e-commerce player Meesho, which charges no commission from its sellers of all categories, including apparel, home decor and accessories. Flipkart, too, rolled out a similar structure in November 2025 for products priced below ₹1,000.

Mint unpacks why e-commerce firms are going for this key strategy shift now, what it means for the ecosystem, and how the battle for market share is likely to unfold.

How did it all start?

When early players like Flipkart, Snapdeal and Amazon India started up in India, the monetization models for online commerce typically involved charging a listing fee and commission from sellers, coupled with other revenue channels such as advertising.

However, Meesho disrupted the structure in 2015 by introducing a permanent no-commission model, putting emphasis on unbranded and value-seeking segments. This pushed the Bengaluru-based marketplace to secure a strong position in India’s small towns, with regional sellers finding a convenient way to reach their audience, augmented by low costs and a wider assortment.

The structure worked especially well in a categories such as fashion and accessories that generally command higher margins than others, according to Satish Meena, analyst at market research firm Datum Intelligence.

The move prompted Flipkart, Amazon India, and now Myntra, to change course and waive off commissions on low-ticket items and retain charges for shipping, marketing, and other features such as account management. To be sure, these platforms continue to charge commissions on higher-ticket products. While no official figures are available on the revenue break-up, advertisements continue to be the biggest revenue source for the industry.

How will this benefit Myntra?

For Myntra, the introduction of a zero-commission model is a targeted strike to consolidate its dominance in the high-margin fashion and lifestyle category. According to estimates by Datum Intelligence, Flipkart led the charge in the lifestyle segment (including apparel, accessories, and footwear) with a 22.4% market share in 2024, followed by Myntra at 17.5%, and Amazon India and Meesho at nearly 14% each.

This could help Myntra go deeper into smaller towns and cities that prefer regional and familiar names. “Fashion is driven highly by variety in assortment, brands, sizing, and trend cycles, making it a far more complex category than electronics, Datum’s Meena said. "By removing commission barriers, Myntra can onboard thousands of emerging D2C brands that previously stayed offline or on social media due to high entry costs."

According to a 2025 report by Bain & Co and Flipkart, user adoption is already spreading from tier-2 to tier-3 cities, with three in five new shoppers since 2020 coming from cities designated tier-3 or smaller.

Moreover, fashion already comes with a margin advantage, making revenue loss minimal. Gross margins in apparel are in the 15-30% range, depending on the value of the item and supply chains. “No commissions here will mean more earnings for sellers. Myntra has little to lose as well," Meena noted.

This move also puts Myntra at the forefront of trend-first retail, as it widens its assortment to pull in Gen-Z shoppers that are more open to experimenting with new brands. The Flipkart-backed company also stands to gain meaningfully from advertising revenue – as the marketplace becomes more crowded with small-scale zero-fee sellers, these brands will inevitably bid for Myntra’s premium ad slots to stay visible, Meena added.

According to Myntra, it rolled out the model in pilot mode in the last four months of 2025, which led to more than 200 brands joining the platform.

Will e-commerce dynamics change?

While there will be no direct impact on shoppers, platform loyalties could be tested over time. Commission structures define how sellers choose to spend on and prioritize marketplaces, eventually shaping the quality, prices, and even return policies of products on different marketplaces.

In terms of market share, a complete shift is unlikely in the near term. “Seller policies change constantly, and a single shift will not change the game for any platform," said Datum’s Meena.

Ultimately, customer-centric features such as faster deliveries and discounting practices will decide market dominance.