After complaining that the company somehow just wants foreign money but no foreign competition, Flipkart is back at working out some real logic, to continue its battle against Amazon. In order to improve its margins, the homegrown eCommerce startup, has today announced the launch of its own Private label under an umbrella brand Flipkart Smart Buy. As per reports, this is the first among several other Private Labels which the company will be launching in coming six months.
With this Smart Buy and the other private Labels slated to launch next year, Flipkart will mostly target categories such as electronics, accessories, home decor and furniture.
Flipkart Smart Buy, which will go live from today, will span across 25 to 30 categories, including electronics, electronic accessories and home plastics for starters, said Adarsh Menon, Flipkart’s head of private labels.
He said that the company has identified gaps in demand and want to position private labels as brands which have great functionality and are affordable. To prove his point, he gives an example of cables and charges, saying that no one offers such quality at the price points and they are offering a two-year warranty.
Commenting about the private labels, Adarsh Menon, head of private labels at Flipkart, said:
Over the next 2-3 months, we will launch our second (private label) brand, which will play in a different set of categories in home decor, home furnishings, home appliances, and furniture. That should take us through to April —two umbrella brands and maybe 40 product categories.
These private label brands on Flipkart will be sourced globally and are targeted at clear downstream benefits for the marketplace. The products will be sourced globally from partners in China, India or Malaysia.
With the launch of private label brand, the company expects to reduce returns as they will focus on offering good quality products; there will be a repeat value for consumers and it will also benefit sellers on the platform.
The company’s efforts to push towards private labels comes at a time when Amazon India entered this segment with three launches – Symbol and Myx for men’s wear and women’s ethnic clothing and Solimo for small appliances and kitchenware category.
Currently, the company is going through rough times. While the sales is affected due to the recent demonetization drive, the company has also seen top-level executive departures and a series of valuation markdowns. Also, it is reported that the company is struggling to raise a fresh round of funding.
As said, the company is currently having hard time to retain high-profile executives. Flipkart’s former head of private labels Mausam Bhatt, along with senior vice-president of engineering Peeyush Ranjan, resigned from the company.
Flipkart’s independent fashion marketplaces Jabong and Myntra already have several private labels. Myntra has been aggressive on launching private labels and is getting close to 25% of its business from these labels.
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