Amazon trebles choice of offerings under private labels
Amazon says it has increased the number of private label products to 43,000 in 2018, compared with 15,000 in 2017
Bengaluru: Online retailer Amazon India has nearly tripled its selection of products of its private brands business, as part of a broader strategy to reduce its reliance on categories such as smartphones and large appliances, amid an expensive market share battle against arch-rival Flipkart. Amazon said it has increased the number of private label products to 43,000 in 2018, compared with 15,000 in 2017.
The company may launch new brands if there are opportunities in certain categories that are relatively under-penetrated, Amazon vice-president Manish Tiwary indicated in an interview.
“Our private label business is broadly divided into two chunks—one is where we own the brand ourselves and we do work end to end. We have six brands under that umbrella…. Besides these, we work with a number of high-quality brands and manufacturers. And we have 26 sub-brands over there,” said Tiwary.
Apart from the private brands that it owns, Amazon also works with a number of small manufacturers and retailers and showcases their products on its marketplace. Earlier this year, Amazon launched the Amazon Accelerator Program through which it partners with manufacturers and helps them launch their own brands on Amazon’s marketplace. So far this year, Amazon has launched 21 brands under this program.
Amazon also plans to launch around 30 product lines during the coming festive season sale in categories such as kitchen storage, home storage, bedsheets and curtains.
At Amazon India, top executive Amit Nanda has been spearheading the company’s expansion into the private label category over the past two years.
Amazon has so far launched eight private label brands—Symbol, Myx, House & Shields and Arthur Harvey in fashion and apparels, Solimo in hard-lines or categories such as small furniture and home appliances, Presto in homecare and Vedaka in groceries. Amazon, which globally has an in-house brand called AmazonBasics, launched the brand in India last year.
Amazon plans to focus on categories such as fashion and groceries in the near future, as far as private labels are concerned, Tiwary said.
“Going forward, we will focus very heavily on our fashion business, our consumables business and our home and kitchen business. These are areas where consumers are looking for familiar brands,” said Tiwary.
Private labels and brands are an important chunk of the e-commerce business, as they typically offer online retailers fatter margins. Over the years, top retailers such as Amazon and Flipkart have tried to build their private brands, with varying degrees of success. Flipkart-owned online fashion retailer Myntra is one of the few companies that has built a portfolio of private fashion brands that form a significant chunk of its overall sales.
So far, both Flipkart and Amazon have targeted categories such as fashion and home appliances. Both recently launched private label brands for the key smartphone business, which still generates well over 50% 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.
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