Flipkart has a bold new plan – and it’s one that’ll keep the government happy

Photo credit: bswei / 123RF.

Ecommerce company Flipkart is going to launch a new private label under founder Sachin Bansal’s stewardship, three people directly aware of the company’s plans told Tech in Asia.

India’s Flipkart launched its first self-branded products, dubbed Flipkart Smart Buy, in December, focusing on phone chargers and data cables.

The aim is to gain higher margins for the Amazon arch-rival, which in turn could help with profitability.

Internally codenamed Project Ice, Sachin is planning to make self-branded items in more than 40 categories, including electronics and home furnishings. A rollout is expected by April.

Flipkart did not respond to an email seeking comments.

With the new label launch, Sachin and team are going after a higher-end market, with presumably only one end in mind for now – to source raw materials and manufacture in India, avoiding the usual made-in-China products.

It aligns Flipkart with the Indian government’s pet “Make in India” project, where the Prime Minister has been encouraging companies to tap the country as a manufacturing hub. A vast array of global tech players, including Apple, Foxconn, and Xiaomi have already bought into the idea.

Tax incentives

The launch of the Make in India campaign. Photo Credit: Wikimedia.

There are tax benefits and subsidies that sweeten the deal. As per the Make in India site, “in order to boost manufacturing of electronics, the government of India provides a capital subsidy of up to 25 percent for 10 years.”

“As of now, the new label does not have a mandate to make profits, it just has a mandate to set up a Make in India base,” two people aware of the developments told Tech in Asia.

“This has been in the works for months now,” another source said. “It sort of got put on hold when Kalyan came in, but it’s back now.” Kalyan Krishnamurthy is Flipkart’s new CEO, who took charge earlier this month.

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