Now, retailers to sell private labels on e-commerce portals

Private labels have been traditionally high margin earners for retailers. But now, brick and mortar retailers are trying to peddle them in the online marketplaces such as Amazon and Flipkart to boost revenue.

Private labels brands or store brands are those which are retailers’ own brands. Retailers stock them as they add to the revenue. Typically, they have no marketing and advertising cost.

Future Group, for example, has now tied up with Amazon India, where it sells products from its private labels using the online retailer’s website. Future Group has about 45 brands in categories such as apparels, food, skincare and homecare. Its brands include Tasty Treat, Fresh & Pure, Ekta.

Other retail biggies such as Shoppers Stop and Aditya Birla are among the players who are either in talks or have already deployed their product on market places. This even as players like Myntra, Jabong and Amazon are strengthening their portfolio of own brands in fashion and lifestyle category.

Shoppers Stop MD Govind Shrikhande said that the company will be soon retailing its private label apparels from online market places.

“One of the big elements that we see clearly is the online sales and the kind of disruption that the online space is bringing to the entire retail field, one is a strategy in play to really take online head on, so three-pronged strategy that we are currently working on is in this quarter. We will also start selling some of our private label in the market, so this is the starting point for getting online in a bigger way,” Shrikhande said.

For retailers like Future Group, private labels reportedly contribute 40 per cent to KB’s Fairprice sales turnover.

Others like Tata’s electronics goods store Croma, which has an e-commerce venture of its own, also announced a tie-up with Snapdeal to sell some of its products.

Rachna Nath, ED, PwC, says, “Consumers are saying that you have to get the shop to me. Retailers are realising the reach of e-commerce player who are swollen with PE money. Apparel is the biggest category after electronics which is why most retailers are selling their private labels in that category.”

Aditya Birla Group is also mulling to sell its fashion brands through the online route. It has over 50 categories in its private label portfolio.

Saloni Nangia, President Technopak, notes, “Retailers know that on an average Indian consumer is not too picky about brands. And hence, there is a huge opportunity for private brands to be sold in the online platform and also grow the brand. We expect sales from private label being sold on the marketplaces to be about 20-25 per cent on an average”.

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