Bengaluru: Flipkart is ramping up its in-house brands, or private label, business for its flagship Big Billion Days (BBD) sales next month, this time in key non-fashion categories as well.
The Walmart-backed online retailer plans to add several products to MarQ, its large appliances brand, Perfect Homes, its furniture brand, and SmartBuy, the umbrella brand for small electronics and accessories, ahead of its festival season sales.
Flipkart is increasing its focus on both private labels, which offer high margins, and large appliances for their higher prices, adding more to the company’s gross sales. The company also expects that the furniture category, which was relaunched in September 2017 with its private label Smart Homes, will prove to be a great growth driver.
“Private label is a very big chunk of our plan for BBD this year. The three categories where our private label play will be aggressive are large appliances, furniture and electronic accessories,” said Adarsh Menon, head of private labels at Flipkart.
Launched 11 months ago with microwave ovens, MarQ now includes washing machines and air conditioners. These in-house products now account for about 15 per cent of all sales in their respective product lines. Ahead of the BBD event, Flipkart will add refrigerators and smart televisions as well as MarQ, its fifth private label brand.
Menon said MarQ brand products are priced 20-30 per cent lower than other branded products in the category.
About half of Flipkart’s gross sales, or gross merchandise value, comes from smartphones, while fashion contributes about 26 per cent, according to industry estimates. Flipkart’s private labels contribute a paltry 5 per cent to its GMV but analysts expect this to increase as the company expands its private label business.
Other private labels under the umbrella of Flipkart include a grocery brand and ‘Billion,’ launched by co-founder Sachin Bansal, that offers smartphones and other products.
Industry experts also said Flipkart’s aggressive ramp-up of private labels is a part of its ‘affordability’ constructs.
“This will help them attract first-time customers who are coming because of their trust in the platform and will buy private label products,” said Ujjwal Chaudhry, engagement manager at Redseer Consulting. “These will mostly be non-metro customers.”
Amazon India does not have an in-house brand for large appliances but has private labels in categories such as fashion, home appliances, electronic accessories and smartphones, and plans to launch several more private labels this year.