Flipkart is taking another stab at selling its own brand of products, with a few tweaks to its earlier private-label business model that had suffered a few setbacks.
India’s largest online marketplace is preparing to launch in-house brands in jewellery, mobile and fashion accessories and other categories shortly, according to two people aware of Flipkart’s plans.
The Bengaluru-based company will license its private-label brands to sellers whom it deems capable of fulfilling its quality manufacturing benchmarks and product specifications, these people said, declining to be identified. The products will be priced affordably.
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“Flipkart will create brands and those brands can be licensed to various sellers, based on specifications directed by the company,” one of them said. “The ownership of the brand will rest with Flipkart.” But unlike earlier, Flipkart will not own any of its private-label inventory. Flipkart declined to comment on the new launch of its private-label business, which one source said was likely after August.
Mausam Bhatt, who was senior director mobile commerce and online marketing at Flipkart, has been elevated to vice president in charge of the private-label initiative.
Flipkart’s second attempt at the high-margin private-label business comes three years after it first launched its brands Digiflip in consumer electronics, Citron in home appliances and Flippd in apparels.
These brands have had limited or no success; Flipkart has stopped selling its Digiflip tablet computers.
Traditional and online retailers launch in-house brands typically to plug gaps in product categories or to improve profit margins. Margins of private-label electronic products can be 20% higher than that of similar branded products, according to industry estimates.
Amazon, the world’s largest online retailer, sells its own brand of computers, mobile accessories and other products through its private label line called AmazonBasics.
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In May, The Wall Street Journal reported that Amazon.com was launching new private-label lines to sell groceries and household items in the US. Flipkart’s new licensing arrangement amounts to being in the private-label business without having to take on the risk of handling inventory or supply chain, said Harminder Sahni, MD of consultancy firm Wazir Advisors. Daniel Sprong Authentic JerseyShare This