Flipkart planning to launch
exclusive sales for over 30 global brands next year
NEW DELHI: Flipkart
plans to launch exclusive sales for over 30 global brands on its portal next
year, as more marketers seek to benefit from the rising reach of online retail
in India.
The Bengaluru-based
company, which sold millions of units for Chinese phone maker Xiaomi and
Motorola, is looking to replicate the success across categories. "The
criterion to select the brands is based upon needs of Indian consumers and
whether they are getting that product at the price they want," said
Michael Adnani, vice-president for retail at Flipkart, adding that nearly 70
brands had approached his company for exclusive tie-ups. This year, apart from
mobile phones Flipkart has been the sole marketplace for several fashion and
apparel brands like Diesel, Debenhams and Kenneth Cole Reaction.
Marketers are of the
view that online channels where overhead costs are not built into the price
paid by a consumer will become more attractive. "We plan to launch newer
models exclusively on Flipkart in 2015, which includes Mi4 smartphone,"
said Hugo Barra, vice-president of Xiaomi. Delhi-based Snapdeal is also looking
to partner with over 450 brands next year, though not all of them will be
exclusive tie-ups. "We will jointly work on new product launches,
co-marketing initiatives and will help them increase their market share through
data analytics," said Sandeep Komaravelly, a senior vice-president for
marketing at Snapdeal. Snapdeal has tied up exclusively with brands such as auto
maker Mahindra, Tata Housing and Finnish smartphone Jolla for product sales
online this year.
For brands the
attraction of online retail is the enormous reach it offers backed by
attractive discounts to consumers. "There is a direct connect with the
brand on a website," said Manu Jain, head of Xiaomi India. "In a
traditional retail channel, the overhead costs get passed on to the
consumer."
Typically an electronics product that retails at .Rs 15,000 in a store can be
sold at about.Rs 12,000 on an online portal according to Flipkart's Adnani.
"There is a net savings of 20% by going online in some categories. We plan
to pass all these to our consumers," he said.
Both Flipkart and
Snapdeal expect to strengthen their technology platform to deal with steep
increase in traffic that comes with exclusive product launches. Snapdeal's
Komaravelly said his company will "invest about $250 million to scale up
its technology platform". New technology development centres will be set
up with the first one expected to come up in Bengaluru soon. Flipkart also
plans to scale up its IT infrastructure. "We have been 'less-than-perfect'
in our ability to predict data and traffic,' said Adnani. "We can
easily scale when the traffic becomes 2x or 3x. But when it becomes 20- fold,
it's a whole new thing. We are investing in technology to scale at that
velocity," he said.
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