Can private brands help Amazon win online fashion battle against Flipkart?

Last week, IOS reported how Amazon is assembling a technical A-team for its fashion business to compete with Flipkart-Myntra-Jabong trio. But the efforts of American ecommerce giant to increase Amazon Fashion’s market share don’t end here.

The etailer is planning to expand its private label network by launching new brands in fashion, groceries and electronic accessories product categories.

The company has hired legal experts to understand & work around the revamped FDI guidelines and its implications on developing own labels. Amazon has also roped in Gautam Kotamraju as Creative Head – Private Brands in July this year.

Kotamraju was Myntra’s Chief Creative Officer and had helped the fashion etailer to launch private labels like Roadster, Mast & Harbour, Kook n Keech, Dressberry, Anouk, and HRX successfully. He has been entrusted with the responsibility to the same for Amazon.

Tool to edge out competitor Flipkart

Currently, Flipkart is the online fashion market leader. While niche etailers don’t seem to be worried, Amazon wants to dilute Flipkart’s dominance.

“Amazon wants to take on Flipkart in fashion and they’ve identified private brands as a potential big driver of growth. Private brands give you exclusivity and the margins are higher; so, it’s potentially a very attractive business,” said a person familiar with the matter.

The US-based marketplace already has electronic accessories brand AmazonBasics, which is sold by Cloudtail.

Developing private brands is an excellent product differentiation strategy and has helped many firms in the past to boost sales. Since marketplace model offers very little space to innovate and differentiate product offerings from rivals, creating own brands is a go-to market strategy for such players.

But will it help Amazon as it’s 3 against 1? Not to forget, FDI’s 25% sales cap from one seller on marketplaces.  Will Amazon use the new vendors to sell its private brands? Please share your views.