Flipkart is gearing up to launch its own DigiFlip branded tablets; why don’t you take a minute to digest that. DigiFip, the electronics brand launched in 2012, currently sells a range of computer and electronic accessories such as speakers, pen drives, headphones, etc.
DigiFlip branded tablets are expected to boost margins in the otherwise extremely competitive electronics retail space. “Cut throat competition” are staple words to describe this market space to be honest; the Rs. 5,000 – Rs. 15,000 range is populated by literally hundreds of products (tablets) from tens of brands like Micromax, Karbonn, Lenovo and others. Establishing a ground in such a populated camp, it sure is going to be difficult.
However, DigiFlip tablets aren’t dead on arrival. Quite the opposite, actually! Flipkart has the unique opportunity to take internal marketing and turn the tables. With millions of visitors, a simple front-page ad of its own-branded tablets will propagate the word about their new product(s) more than a Karbonn or Lava ad usually does.
In addition, Flipkart won’t even have to spend much on marketing if they use their existing assets, namely their online shopping portal, optimally.
Also, marketing aside, the company can really steal a slice of the cake by launching a few models offering a range of features. Instead of going the Samsung route and hitting retail shelves with various products like a bad case of termite infestation, half a dozen DigiFlip tablets ranging between Rs. 5,000 – Rs. 15,000 could do wonders for the yet-to-be-announced products.
People will surely ask – Why is Flipkart entering the electronics market with tablets?
The $1 billion enterprise wants to earn more profits, just like any other business. And margins of private label electronic products happen to be around 20% higher than that earned by branded products. In fact, the latter earns less than 10% margin on their products.
As the industry gets filled with more brands, profits of every firm decreases in the long run. Of course, we aren’t including the likes of Apple and Samsung who will continue to boast extremely high margins on their products.
There were rumors that Flipkart would launch DigiFlip-branded Smartphones sometime in the future. We haven’t heard anything concrete to support those rumors. For now, let’s see how the company handles tablets.
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