According to KPMG, private labels would develop 1.3-1.6 times faster than e-commerce platforms in India between 2019 and 2022, and produce 1.8-2.0 times larger margins than external brands. India’s private label enterprises rose 31% in the third quarter of 2020. Private brands grew significantly compared to larger manufacturers in Q3 2020, whereas other manufacturers saw decreases of up to -20%.
Many e-commerce sites rely on private labels. Smart Buy was Flipkart’s first private label in 2016. These days it has Perfect Homes, Cara Mia, MarQ and Billion among others. It has around 300 private label brands. Amazon offers popular private label brands including Echo, AmazonBasics, and Myx. Other private label players include Myntra, BigBasket, and Blinkit (formerly Grofers).
“Any successful global retailer has a big and sustaining portfolio of private brands across categories. We sat down as a leadership team in the middle of 2016 and looked forward 3-5 years. “The lack of a private brand business came out as an opportunity,” said Adarsh K. Menon, vice-president and head of private brands, electronics and furniture at Flipkart.
Online retailers launching private labels is nothing new. While this is great for these players, many third-party brands are unhappy with the way private labels are growing. This is one of the reasons why D2C brands are booming in India and globally. It’s a two-pronged strategy for most One is to be omnichannel and accessible to consumers. The second benefit is brand discovery. Even while online marketplaces account for a large portion of sales, most D2C brands focus on promoting and driving traffic to their own websites. Here are some reasons why.
