Private labels will contribute 10 per cent to Flipkart’s overall business by the end of the year. As of now the e-commerce giant has only one private label, Flipkart Smartbuy.

Flipkart Smartbuy accounts for 10 to 35 per cent of Flipkart’s business in these categories. Private labels typically earn a larger gross margin than products sold by other vendors, even when offered at a discount. At present, about a dozen sellers are making products with the Flipkart Smartbuy label. With more products and labels, this number will be doubled in the next couple of months. These sellers will be from manufacturing hubs in Tier II locations such as Jaipur and Ahmedabad.

When Flipkart Smartbuy was launched in December last year, the company had associated with only a few large sellers. This time round, it is associating with smaller sellers too to widen its product range. Flipkart plans to launch more private labels by the middle of this year to sell furniture, small appliances, home décor, furnishings and staples. The aim is to boost margins and compete better with rivals.