Walmart backed E-Commerce platform Flipkart has recently relocated a major amount or portion of manufacturing and sourcing for its in-house private labels brands to India. The homegrown e-commerce giant was sourcing and importing products for its brands from China and Malaysia. This strategic move has helped Flipkart significantly to minimize costs and comply with the government’s Make in India rules and regulations.
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Flipkart’s private brands include MarQ, Perfect Homes, Billion and Smart-Buy. These private labels brands account for 8 per cent of the company’s total sales. The company is sourcing majority of high-end Android TVs, air conditioners, washing machines, consumer durables, textile and smaller appliances from India, a report by The Economic Times said. Also, 50-60 per cent of accessories are also sourced from India.
Previously during the first phase the electronics and furniture for Flipkart’s private brand were being imported from China, but it has been brought to less than 50 per cent, Adarsh Menon, head of private label business at Flipkart, told the newspaper daily.
Menon told that out of 150 factories Flipkart works with, 100 are in India. He, however, did not disclose any more details like the value of goods that are being manufactured in the factories in India and those in China and Malaysia.
Make in India policy is envisaged with twin objective of employment generation and usage of home made products. Flipkart is taking all positive steps towards it. With 50% products in electronic segment sourced within India means helping the ailing manufacturing sector. Can it be a positive impetus in garnering for market share with good discounts as cost of products will come down by local sourcing
Last year in December, 2018 the government of India had restricted online marketplaces from floating their private brands under the new foreign direct investment (FDI) norms for the e-commerce players. A later clarification had lifted this ban on private labels.
Amazon, one of the biggest competitor and business rival for Walmart-Flipkart in India, also has most of the manufacturing for its private labels in India, the report said. The Seattle-based e-commerce major has its own brands in categories ranging from air conditioners to baby care. The company, however, did not disclose more details of its manufacturing operations in India, the daily further reported.
India in last couple of years imposed high import tariffs on smartphones, high-value electronics and their components. This has pressurized companies like Apple, Samsung and Xiaomi to set up manufacturing facilities in India with partners like Foxconn and Wistron.
Modern Retail is all about having the right mix of merchandise, trends, shopping experience coupled with a great sales staff.
The central government has been tweaking its policies to boost the growth of the domestic players in every sector.