The co-founder duo of Flipkart – Sachin Bansal and Binny Bansal recently spoke about their ecommerce company’s future strategies. In two separate instances, the Bansals revealed that the focus is going to be on developing private labels, expanding online grocery arm and strengthening its furniture vertical.
Company insiders revealed that co-founder Sachin Bansal is setting up a special team to develop private labels for the company, which is aligned with the Indian government’s Make in India initiative. The etailer aims to earn dual benefit of expanding their product portfolio and get tax benefits & develop a strong relationship with the government.
While speaking on this matter, two sources said, “It’s a big potential business” and “the subsidies and tax benefits for make-in-India products and the favourable government attention make the opportunity exciting.”
If executed well, private labels would help Flipkart to open up another source of revenue besides logistics and advertising, and also earn high margins.
Earlier this year, Flipkart had shut its grocery app ‘Nearby’. But now the etailer plans to focus on this ecommerce category with renewed interest for the next 3 years starting from 2017.
“There’s definitely room to build a profitable grocery business, but it’s hard. That doesn’t mean it’s not possible, but it’s hard,” said Flipkart’s CEO Binny Bansal.
This development could be the result of Flipkart’s logistics arm Ekart’s flourishing business. As we know, logistics is one of the biggest pain points for online grocery business. And now that Ekart handles hyper-local deliveries for third-party companies, it probably is the right time for the ecommerce leader to develop its own grocery business.
Another product category that Flipkart is going to focus on is big-ticket item furniture. The ecommerce leader is currently busy adding more products to their catalogue and shaping up furniture assembly services.
Bansal disclosed, “You will see more furniture in three-four months. We’re ramping up our selection and experience as well. We’re basically building capabilities for furniture.”
Amazon India too has stepped into the online grocery business and private labels. It’ll be exciting to see how the two ecommerce leaders execute their respective plans
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