E-com companies scouting private labels to boost business, margins

Mirroring a move that offline retailers such as Shoppers Stop and Big Bazaar made in the past, the country’s e-commerce firms are looking at private labels to boost their business and earn higher profits. Myntra, the Flipkart-owned online fashion portal, owns brands such as Roadster, Mast & Harbour and HRX, which make up around 25 per cent of its sales. Today, Myntra believes that it will be among the first e-tailers in India to become profitable boosted by the higher margins it earns from private label brands.

While Myntra was certainly among the first online e-tailers to explore the private label route, it is now joined by other players such as Amazon, Lenskart and Flipkart all of whom started off as storefronts. As the sector gains maturity, more firms are looking at profitable growth, pushing them towards opening their own line of branded products.

Amazon, a late entrant into India, might have caught rival Flipkart in terms of monthly sales, but the Indian firm still maintains a massive lead over it in the fashion category. With fashion being the second largest category for online selling, Amazon launched its private fashion brand Symbol on Wednesday last, just ahead of the festive season.

Fashion isn't the only category where e-commerce firms are experimenting with private labels. Amazon has been working with its largest seller Cloudtail to launch its own line of mobile and PC accessories under the brand name Amazon Basics. Flipkart too had launched DigiFlip, its in-house electronics accessories brand in 2012, but shut the brand last year.