Flipkart has made plain its intention to kickstart innovation which can deliver the next phase of growth in the Indian ecommerce market, just as it once did by introducing cash-on-delivery in 2011.
Flipkart, one of the e-commerce giants has decided to be a part of the make-in-India project. Sachin Bansal, Executive Chairman, Flipkart said that he is going to build a team, which will encouraging the sale of home grown products and be a part of a big mission.
Bansal said that he sees a big potential business in this field and will also help it gain attention from the central government. Moreover it will make it stand out from the rival companies, especially Amazon, which is one of the fastest growing e-commerce market place in the world.
A source was heard saying, "the subsidies and tax benefits for make-in-India products and the favourable government attention make the opportunity exciting."
Kartik Hosanagar, a professor at the Wharton Business School in the United States, said, "The purpose of private label brands is two-fold: increase margins from sales by owning the full value chain and diversify revenue sources which better positions the company against competition."
He also said, "It'll help increase government ties for sure. But at the end of the day, the question is whether the private labels will stick with the customer."
In recent months, Flipkart has made plain its intention to kickstart innovation which can deliver the next phase of growth in the Indian ecommerce market, just as it once did by introducing cash-on-delivery in 2011.
On a report by ET says that one of the people said, "This Make-In-India initiative could be Flipkart's big play in the broader commerce business as products under the brand will be manufactured in India."
He said, "Make in India has caught up very well in India, looking at the way some Indian brands including Patanjali have done in the country."
However, Amazon India had also launched a dedicated "Make in India" store on its website in February this year. And India CEO Amit Agarwal has also used the initiative as an argument to allow foreign direct investment (FDI) in inventory-based online commerce.