Private labels in Indian e-tailoring on the rise

RedSeer Management Consulting said that private labels accounted for less than 10% of the GMV for Indian e-tailers, but are expected to become a much bigger contributor by 2017.

Anil Kumar, Founder and CEO, RedSeer Consulting said, “Private Labels offer significantly high margins to the e-tailers, and are helpful in converting entry level customers, who are less likely to make costly purchases on e-commerce platforms early in their adoption journey. The market share for these products is likely to go up to ~18% by the end of 2017, which has forced even the biggest horizontal e-tailers to increase their investment in this segment.”

While in 2016 the market share for such products had a limited impact, they are expected to grow into a much more formidable force by 2017, the report added.

The market share contributed by private labels for horizontal players currently is less than 5%, it goes up to less than 20% for Grocery and 25-30% for Fashion e-tailers; whereas for 

Furniture e-tailers, private labels stack up more than 50% of their GMV, the report said.

“While Fashion has lots of products from private labels brands, it is still expected to rise in the coming year; whereas Electronic Peripherals – one category which is largely untouched by the private labels’ effect is also expected to experience a much more growth in this segment,” the report said.