India’s e-commerce major Flipkart moved a substantial proportion of its manufacturing and sourcing for its in-house brands from China and Malaysia to India over the past year, thereby cutting costs and complying with the government’s Make in India initiative.
The move is helping the brand reduce prices of private label products sold across 300 categories on its platform.
“About two years back, almost 100 per cent of our electronics came from China. Today, that number would be less than 50 per cent. When we launched our furniture brand, the entire range was sourced from Malaysia — now that’s down to less than 50 per cent,” said Adarsh Menon, head of private label business at Flipkart.
According to a source, the private brands under Flipkart include MarQ, Perfect Homes, Billion and Smart-Buy, which contribute about 8 per cent to the company’s overall sales.
Menon confirmed that much of the electronics and consumer durables, textiles, most high-end Android TVs, air conditioners, washing machines and smaller appliances are now being sourced from India. As much as 50-60 per cent accessories also get sourced from India. He also said that of the 150 factories it works with, about 100 are based in India.
The move comes as the Indian government has been convincing global electronic manufacturers to set up shops in the country.
Both Flipkart and Amazon have faced opposition over the past two years from smaller sellers over launching private labels. The vendors argue that this has forced them to lower prices in order to stay competitive.
However, the two online firms had said that they launch private labels when they see a gap in the market for products either on the price or quality fronts.
“A common factor in every product we sell is that it is addressing a gap in the platform today and hence growing the overall platform. At the end of the day, it’s the customer who chooses, Menon asserted.