Private labels will contribute 10% to online marketplace Flipkart. Overall business of Flipkart by the end of this year will increase to boost margins and compete better with rival Amazon, a top company executive said as part of a strategy.
The Bengaluru-based ecommerce giant has only one private label, ‘Flipkart Smartbuy’, which sells products under 11 categories, including electronic accessories and home plastics. It accounts for 10-35% of Flipkart’s business in these categories.
US-based Amazon offers a larger range of in-house brands. In comparison, Flipkart plans to launch 15 more product categories -such as cookwares, trimmers, hair dryers and hair straighteners -in the coming weeks under the Flipkart Smartbuy tag to increase their contribution to the overall business.
Adarsh Menon, Flipkart’s vice-president for private label said, “At present, 10-12 sellers are making products with Flipkart Smartbuy label. As we launch more products and labels, we want to double this number in the next couple of months.” These sellers will be from manufacturing hubs in tier-II locations such as Jaipur and Ahmedabad, Menon added. In retailing, private labels even when offered at a discount typically earn a larger gross margin than products sold by other vendors.
Flipkart, which plans to launch more private labels by the middle of this year, has given the licence to its sellers to produce products under the Flipkart Smartbuy label to sell furniture, small appliances, home décor, furnishings and staples,
When Flipkart Smartbuy was launched in December last year, the company had associated with only a few large sellers. But, this time it is associating with smaller sellers too to widen its products range, the company said.
Amazon India offers a range of private labels, including Symbol, a menswear brand and Myx, an ethnic wear label for women. Its other private labels in the Indian market include Solimo kitchen products and Amazon Basics, which has digital and home accessories such as data cables, batteries, chargers, camera bags, laptop bags and earphones.
To strengthen its portfolio in India, the Seattle-based company is likely to introduce more private label brands in home furnishing, kitchenware and fashion. Its first private label in India was AmazonBasics, which became active in late 2015.
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