Flipkart Ditches China: Private Label Manufacturing Moves To India; Is It Make In India Success??
In a major push for Make in India by none other than American retail behemoth Walmart, manufacturing of private labels sold by Flipkart has now shifted to India.
Earlier, the same manufacturing used to happen in countries like China and Malaysia.
What is the reason behind this? How does it affect the company’ bottom line?
Keep reading to find out more!
Flipkart’s Private Labels Will Be Now Make in India
Flipkart owns and sells several private labels such as MarQ, Perfect Homes, Billion and Smart-Buy among others. They constitute almost 8% of their overall sales.
Earlier, almost 100% of the manufacturing of consumer goods such as high-end Android TVs, air conditioners, washing machines and smaller appliances, along with textiles and fashion products used to happen in China and Malaysia.
But now, gradually, these are moving to India.
As of now, 50% of the manufacturing and raw materials sourced are from India, and this can be described as a major push for Make in India movement.
Besides, the company is also saving costs.
Adarsh Menon, head of private label business at Flipkart said, “About two years back, almost 100% of our electronics came from China. 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%.”
Make In India Movement Gaining Momentum In Ecommerce
If we talk about Flipkart, then out of 150 factories which they are dealing with right now, 100 are located in India.
More than 50-60% of the raw materials are now sourced within India, and the same can witnessed for Amazon India as well, their biggest competitor in India.
Amazon India too has several private labels of their own, which includes ACs, mobile phone accessories, daily essentials, home and kitchen products, food products and baby care.
Amazon India has said that the majority of the manufacturing is right now happening in India, but didn’t reveal the actual percentage of foreign manufacturing vs Indian manufacturing.
Interestingly, although Govt. has allowed ecommerce marketplaces such as Flipkart and Amazon to sell their private label products under the new ecommerce policy, local manufacturing isn’t exactly allowed.
This is something of a grey area, but if it pushes for Make in India movement, then Govt. may ignore the laws, for timebeing.
We will keep you updated, as more details come in.