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Flipkart moves away from China to give boost to Make in India

ET Bureau|
Reducing prices of private labels
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Reducing prices of private labels

Walmart-owned Flipkart has moved a substantial part of its manufacturing and sourcing for inhouse brands from China and Malaysia to India over the past year, helping to cut costs and comply with the government's Make in India initiative. That has helped Flipkart reduce prices of private label products sold across 300 categories on its platform. "About two years back, almost 100% of our electronics came from China," said Adarsh Menon, head of private label business at Flipkart. "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%." (Pic: Flipkart/Facebook)

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All India sourced
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All India sourced

Flipkart's private brands include MarQ, Perfect Homes, Billion and Smart-Buy contribute about 8% to the company's overall sales. According to Menon, 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 to set up shop in the country.

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When Apple came to India
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When Apple came to India

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. Amazon 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. (Pic: Apple/Facebook)

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Small sellers grudge
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Small sellers grudge

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. While changes the government introduced in the foreign direct investment (FDI) guidelines for ecommerce marketplaces in December last year disallowed these players from building private labels, a clarification a few weeks later said that this would be allowed. (Pic: Flipkart/Facebook)

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Empowering the MSME
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Empowering the MSME

Many of Walmart's private labels also get sourced from India, which helps manufacturing partners, Flipkart said. "With our private brands business, we are leveraging our scale and global knowhow thorough partnership with Walmart, to empower domestic manufacturers and producers, particularly MSMEs (micro, small and medium enterprises) with new opportunities for growth and innovation," said Rajneesh Kumar, senior vice president and head of policy at Flipkart. (Pic: Flipkart/Facebook) (Text: Aditi Shrivastava, Alnoor Peermohamed)

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