Roots grow into plants, eventually transforming into trees, until it’s time for the fruits to arrive. It took almost a decade and a half for Indian business landscape to grow, thereby evolving it into one of the severely thriving economies in the world today. In wide sense, the e-commerce boom that has been brought about by unicorns like Amazon, Flipkart, PayTm among many others does show a picture with far greater possibilities.

Talking of possibilities, the e-commerce sector of India is experiencing yet another record with the growing private label push in the country. The aggregation of in-house brands by the major online shopping platforms is taking the business ecosystem to newer heights, thus establishing specific brand values for them as well.

Some specifics gain better exposure with private label branding. Aspects like distribution, product design; marketing, sourcing, pricing and manufacturing among few others can be addressed with deeper insights. Comparative pricing is another crucial advantage that can be fetched out from in-house brand merchandizing. Prices lower by 15-20 percent compared to other national as well as global brands can be monitored right from the beginning of transactions.




From where it Began

AmazonBasics is Amazon’s first private label brand which was launched back in 2009. As of today, there are more than 4,600 products that belong to over 100 private label brands which are offered by Amazon alone. Data driven analysis which the organisation deciphers out of its marketplace further compliments its priority in growth over profits.
The gradual circulation of Amazon’s in-house brands has generated considerable business for the organisation. Growth being the priority, the unicorn has been able to spread its wings across numerous industry verticals which include healthcare, electronics, pet care, fashion & lifestyle and home décor among several others. Just like the in-house brands offered by other retailers present in the market, Amazon’s private labels also sell at comparatively cheaper prices in their respective categories. Having multiple revenue channels that include the sales generated through third party vendors give the needed relaxation to the private labels even if one or more are experiencing loss. This acts as a financial cover and further facilitates in the brand building.



The Uprising

Appreciating Flipkart here won’t be an overstatement. The disruption created by this organisation throughout the decade by its private label brands has opened promising potentials for the e-commerce industry. Flipkart’s focus on fashion got exposure through its fashion & lifestyle operation Myntra. Predatory pricing combined with ongoing trends made brands like Roadster, Dressberry, Mast & Harbour, Moda Rapido , HRX, Anouk , All about you and sztori not only accepted by new India but also started generating sales from assumedly every third middle, and lower middle class family, even from some of the remotest parts of the country.

This next focus of this organisation had its way through MarQ, its electronic appliances private label. MarQ was launched in the market 2 years back and it marked the beginning of another era of cost effective and easily accessible electronic appliances that have the capability to compete with the leading brands in the market.

Next in line that’s worth mentioning is Perfect Homes, a private label by Flipkart in the furniture segment that has not only gained popular public appreciation, but has also seen an annual growth of 550 percent as stated by Adarsh Menon, VP, PL & Electronics, Flipkart to Business Standard.

Just like the other private labels offered by the organisation, the range of products with the “Perfect Homes” tag are sold by sellers on Flipkart’s platform itself.Last year the unicorn predicted almost half of its revenue from the furniture segment which turned out to be more than just true by the year’s end.



It Just Gets Better...

Cirrus, Stratus, Altus, Cumulus and Nimbus are the names of the private labels monitored by Pepperfry, an online furniture shopping platform that extended its reaches from the city of Mumbai in 2012. The start-up now monitors ten private label brands with the recent inclusion of Clouddio to the list. These in-house brands accounted for 55 percent of the overall sales on the e-commerce platform last year. It has been able to create a $60 Bn market for mattresses based on its products. Pepperfry during its recent feat raised an investment of $38.5 Mn in last round of the Series E funding from State Street Global Advisors according to Crunchbase data.



With four private labels namely Digimate, HomeBerry, MEIA and Baton which were launched in 2017 e-commerce platform Shopclues have performed reasonably well in their respective categories. These in-house brands within a very small period of time have been accounted for ten percent of the total orders placed in the platform and 12 percent of its last financial year’s revenue as well. It raised an investment of $15.9 Mn from three investors namely Unilazer Ventures, Matrix Partners India and GIC.



The Competition that Follows

The growing acceptability and emergence of private label branding has penetrated new grounds over the last few years and as it stands, two unicorns are strategising their level best to come up with more innovative approaches in future course of time. Over the tenure of the coming five years, it plans to further increase the circulation of all of its in-house brands up to 22 percent from current 10 percent. On the other hand from a competitive standpoint, Amazon has prepared scale up its SKUs (Stock Keeping Unit) from 5,000 during the previous festival season to 100,000 solely on the ground of it new range of private label products.

The Legal Obligations

On an average, about 15 percent of the revenue generated by the e-commerce platforms is contributed by their private label brands. In order to avoid potential fluctuations in the economy owing to over circulation of in-house brands, the Department of Industrial Policy and Promotion (DIPP) has come up with a restriction with a press release that was released in 2018. “An entity having equity participation by e-commerce marketplace entity or its group companies, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity,” the DIPP’s press note cited.

On an intense note of discussion, some of the top investors of the industry which include Naspers, SoftBank, Sequioa, Tiger Global and few others along with the e-commerce platforms that belong to the Federation of Indian Chambers of Commerce & Industry and Confederation of Indian Industry are soon going to have a meeting with the government on reshaping the rules and policies regarding the sales of private labels in the country. Reportedly, an official from the senior management of DIPP has recently denied giving out any information any specific information about the final stand of the government regarding the same.

The press release by DIPP however has raised criticisms voicing from the sector of domestic traders who also sell their merchandise through e-commerce platforms. Having been sat with the commerce minister recently, The Confederation of All India Traders (CAIT) has been able to provide assurance that the e-commerce policies will be reviewed and possibly be in favour of the players operating from India.



What the future holds for the private labels is unpredictable. With the myriad of activities taking place in the business atmosphere across the globe, all that can be stated is that the change in the market trends are being constantly driven by the competitive prices and better accessibility provided by the platforms which are committed to add value in times to come.