Flipkart, the e-commerce giant, based out of Bengaluru has moved a substantial proportion of its manufacturing and sourcing for in-house brands from China and Malaysia to India. The move has helped the company to cut costs and comply with the government’s Make in India initiative. It also helped Flipkart reduce prices of private label products sold across 300 categories on its platform.
Flipkart’s private brands include MarQ, Perfect Homes, Billion and Smart-Buy, which contribute about 8% to the company’s overall sales, sources said.
Whereas, 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% accessories also get sourced from India. This comes as the Indian government has been able to convince global electronics manufacturers.
“About two years back, almost 100% of our electronics came from China,” Adarsh Menon, head of private label business at Flipkart, said.
“Today, that number would be less than 50%. When we launched our furniture brand, the entire range was sourced from Malaysia — now that’s down to less than 50%,” he added.
Flipkart, owned by Walmart, is based out of Bengaluru, founded by Sachin Bansal and Binny Bansal together in 2007. The company initially focused on book sales, before expanding into other product categories such as consumer electronics, fashion, and lifestyle products.
On the other side, Amazon has said that most of its manufacturing for private labels is based in India. The Seattle-headquartered company owns private brands across multiple categories including ACs, mobile phone accessories, daily essentials, home and kitchen products, food products and baby care among others.
Moreover, through higher import tariffs on smartphones and other high-value electronics, India has been able to get tech giants such as Apple to locally manufacture its iPhones here with partners such as Foxconn and Wistron.
According to Menon, out of 150 factories of Flipkart, about 100 are in India. Thus, the company has nothing to say at present, about the details of the split in terms of value of goods manufactured in India versus China and Malaysia.
Over the past two years, Flipkart and Amazon have faced opposition from smaller sellers over launching their private labels. The vendors say this has forced them to lower prices to stay competitive.―The Indian Wire