Flipkart has reportedly moved a significant portion of its manufacturing and sourcing units for private labels from China and Malaysia to India. The Walmart-controlled firm has taken almost a year for this step that will help it to cut down cost and comply with government’s make in India initiative.
About two years ago, Flipkart used to source 100% of electronics items from China while the entire range of furniture brand was coming from Malaysia. Now, the scenario has been changed as it has managed to reduce the dependency for the aforementioned categories by almost 50%.
Quoting Adarsh Menon, head of private label business at Flipkart, an ET report said that the electronics and consumer durables, textiles, most high-end Android TVs, air conditioners, washing machines and smaller appliances are now being sourced from India.
Flipkart’s private labels MarQ, Perfect Homes, Billion and SmartBuy contribute about 8% to the company’s overall sales and of 150 factories it works with, 100 are based out of India.
Apart from Flipkart, Walmart’s private labels also get sourced from India. Recently, it allowed Flipkart-owned fashion marketplace Myntra to sell its private labels in the US.
Flipkart’s arch-rival Amazon that sells its private label across multiple categories also has manufacturing capabilities in India.
Of late, new draft e-commerce policy came as a shock for e-commerce marketplaces over selling private labels. However, the matter is still under discussion and they may be allowed to do their business as usual.
Meanwhile, investment behemoths such as SoftBank, Tiger Global and Naspers had also asked govt to keep the interest of investors and stakeholders in mind before finalising policy for electronic commerce.