Back in May, Flipkart had made it clear that private labels would dominate its product offerings during the Big Billion 2017 edition. For the same, the etailer has collaborated with manufacturers from China and other Southeast Asian countries besides home country India. These manufacturers are helping Flipkart to create an affordable range of products for its private labels.
“We already have over 30 segments where SmartBuy is present and we should be able to expand it to close to 40 categories before Big Billion Day sales. This festive season, we are looking to push private labels during sale events, given the way we have ensured quality checks and standard manufacturing practices,” asserted Adarsh Menon, Head – private labels at Flipkart.
We’ll launch products 15% cheaper than competitors, says Flipkart
The push for private labels is going to get even more aggressive once the festive season starts. The Bansals-led company is planning to launch a host of products that would be available at 15% lesser price than the average price of the same products of other sellers/retailers.
Flipkart has joined hands with Sharetronic to develop a range of electronic products, which would be launched under its Smart Buy private label. The Chinese firm has worked with several global brands like Lenovo, Huawei and Toshiba. The manufacturer believes that Flipkart’s wide reach and leadership position would help them to grow their business.
For quality checks, the home-grown marketplace has hired the services of Intertek. Instead of loading the products with all possible features, Flipkart is sticking to the basics.
Menon said,
“For any product, there are ‘must-have’ features and then nice-to-have’ ones. We are focusing on the must-have features first and bringing them at a cheaper price than average market rate. We have partners like Intertek that run multiple levels of strict quality control before we start selling them on Flipkart.”
Private labels equals to more profits for Flipkart
It is not rocket science to figure out why biggies like Flipkart are investing in private labels. After accumulating tons of consumer data and analysing their seller base’s sales patterns, etailers have the power to develop the right products for their buyers.
Own brands would give Flipkart a better control over its inventory and not to forget – high profit margins.
“We are studying customer data intensively; what feature the customer really values in a particular category. Take, for instance, a mixie. The customer values the motor. It doesn’t really matter if the colour is grey or silver. We have tried to double down on features that the customer values in these categories. We are working with quality partners,” shared Menon.
Big Billion might turn out to be one of the biggest sales events for Flipkart. But would it be the same for its vendors? The ecommerce biggie has been accused of undercutting sellers in the past. After hearing about 15% cheaper products, we don’t think many vendors have a favorable view of Flipkart’s private labels strategy.
