Amazon India looks to expand private label business
Bengaluru: Amazon India is looking to rapidly scale up and expand its private label business by launching brands in new categories this year, even as the online retailer looks to close the gap with arch-rival and e-commerce market leader Flipkart, which has also made an aggressive push into private labels over the past year.
In an interview, Amazon India vice president Manish Tiwary said the company would look to aggressively expand its private label this year, with potential new category launches. He, however, declined to specify the categories in which Amazon India plans to launch new private brands.
“We have selection gaps in every category...our large vendors on the private labels side, we’ll keep on filling the gaps using them,” said Tiwary, a former Hindustan Unilever Ltd executive.
According to two other Amazon executives, both of whom requested anonymity, Amazon India may follow Flipkart’s playbook and launch a separate private label brand for certain large appliances as well as smaller appliances.
Tiwari declined to comment on Amazon’s private label plans for large appliances, adding that Amazon India was not sure if it “needed new private brands”.
In response to a query sent on Tuesday, Amazon India declined to comment on its future initiatives, but added that it would continue to identify selection gaps in various categories.
“We do not comment on speculation around what we may or may not do in the future. However, we are a customer-centric company and our goal is to provide the widest selection to the maximum number of customers. We will therefore continue to evaluate any need gaps in selection that may be served by launching specific products in that category to help achieve this goal of widest selection,” an Amazon India spokeswoman said.
At Amazon India, top executive Amit Nanda has been spearheading the company’s expansion into the private label category over the past year and a half.
So far, both Flipkart and Amazon have targeted categories such as fashion. Both recently launched private label brands for the key smartphone business, which still generates well over 60% of overall e-commerce sales in India. While Flipkart launched a smartphone under its ‘Billion’ brand created by founder and chairman Sachin Bansal, Amazon soon followed with a brand called Tenor.
Amazon has so far launched at least five private label brands—Symbol and Myx in fashion and apparels, Solimo in hard-lines or categories such as small furniture and home appliances, and Tenor in smartphones. Amazon, which globally has an in-house brand called AmazonBasics, launched the brand in India last year.
“As far as the private label part is concerned, it’s largely driven globally. The fact is they have such a huge assortment. If I can’t find the selection here, I do go to them,” said Tiwary.
Tiwary added that Amazon would also look to expand categories and launch new products under existing in-house brands such as Solimo and Myx.
“I have more than enough to do with Symbol, Myx, Solimo and Tenor...let’s take Solimo as an example—we have 400 ASNs (Amazon’s in-house lingo for stock keeping units) and we’ll add at least more than double the number of ASNs across categories,” said Tiwary.
According to experts tracking Indian e-commerce, Amazon India’s track record in the private label space has so far been mixed at best. While it has successfully launched several private label brands—some of which have done well—in key categories such as fashion and smartphones, it continues to lag competitors.
That is largely due to the difference in approach by online retailers towards private labels.
While Myntra has largely focused on creating fashion brands with its private labels and targeting so-called fashion seekers, retailers such as Flipkart and Amazon India have largely followed an approach that caters to the masses.