Amazon, Flipkart’s private labels to face challenges with new e-com guidelines

The private label businesses of Amazon and Walmart-owned Flipkart may come under regulatory lens, following fresh guidelines issued to e-commerce companies. The government's directive prohibits entities with equity participation in e-commerce marketplaces from selling products on its platform. The norms highlight how other sellers, who aren't offered similar terms of engagement, are crying foul over unfair and discriminatory practices.

For Flipkart and Amazon, private labels contribute around 10 per cent of the business and its growing as a category with a wider assortment and attractive price points as these marketplaces control the full spectrum - from contract manufacturing to logistics and pricing. With new norms, the in-house brands may face the heat.

Amazon's in-house brands include Symbol, Mix, Amazon Basics. Flipkart has SmartBuy, MarQ, Perfect Homes. Myntra has Roadster, one of its largest private brands. Over the past two years, these companies have been investing in private label business to reduce dependence on third-party brands, so they have a better negotiating power with other brands.