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Private Label Brands Likely To Reshape The Walmart Amazon Fight In India


05/30/2018


Private Label Brands Likely To Reshape The Walmart Amazon Fight In India
Private label brands are getting popular among tens of millions of aspirational Indian shoppers who ae seeking affordable alternatives for everything from clothes to smartphones. This group of shoppers are those who desire to look hip and cool but are not able to afford big global brand names.
 
And now the war for the Indian e-commerce market is most likely to rotate around the private label brand – more so as the fight for supremacy ion the fastest growing online market in the world now is imminent between Amazon and Walmart with the later acquiring top Indian online retailer Flipkart for $16 billion.
 
Flash sales of discounted electronics has primarily been the strategy for online retailers for rivalry in the Indian market. however, such strategies often are loss making and potentially unsustainable.
 
Such discounts have already resulted in cash being burnt by both Flipkart and Amazon and therefore a movement of more towards private labels can help the companies to generate profits because they would be able to control the pricing, marketing and supply chain of the private labels, according to analysts.  
 
Retail analysts say that private labels have the potential to attract price-sensitive Indian consumers and create brand loyalty and higher margins even though about 500 million Indians now use internet but with many just dipping their toes into online shopping.
 
For example, a private label brand that everything from T-shirts to air conditioners – Billion, was launched last year by Flipkart. The retailer is also the owner of furniture label Perfect Homes and electronics brand MarQ. There are 13 private labels in Myntra portfolio and it is profitable.
 
In India, the push towards private labels is being slowly made by Amazon too. A low-cost smartphone brand 10.or, women’s ethnic-wear brand Myx, Solimo for dry fruits and bed sheets, and the global AmazonBasics brand that sells everything from headphones to stationery is also included in the private label portfolio of Amazon.
 
“The role of private brands for us is to fill in specific need gaps that are not being serviced,” Amazon India head Amit Agarwal told Reuters in an interview last month. “We’ll keep looking for these opportunities.”
 
Private brands will help it embark on “a overall long-term profitability journey”, said Arun Sirdeshmukh, the head of Amazon’s fashion business in India, even though Amazon believe that it will years before it is able to make money in India.
 
There are retailers who see an opprotu7nity for the Indian private label brand being taken over seas by Flipkart and Amazon,
 
A number of the private brands that has bene rcxeat6ed by Flipkart become very popular among the Indian diaspora in the forieng countries where Walmart is operational, said Flipkart’s co-founder Binny Bansal after the deal with Walmart. “That’s something we’ll be looking at,” he said.
 
“The U.S. private label for Walmart has always been an entry price, it tends to be at the lower end of the pricing spectrum, I think that’s how it will probably work in India as well,” said Neil Saunders, managing director of consultancy GlobalData Retail.
 
(Source:www.reuters.com)


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