Amazon's India unit is working to grow its private-label offering amid fierce competition with homegrown e-commerce leader Flipkart, Amazon India vice president Manish Tiwary told LiveMint in an interview.
He didn't say which categories would get the private brand treatment, LiveMint reports. Flipkart the past year has accelerated its own private-label business, including in large and small appliances, and two unnamed Amazon sources told LiveMint that the American e-commerce giant is mulling competing in that space.
But Tiwary told the business news site that he wasn't sure Amazon would need to add categories to its existing private label effort (which includes apparel, batteries, tech accessories, food and consumer products but not appliances beyond its Echo and Kindle devices).
India is the top developing country for retail investment, on the strength of a growing economy and middle class, and a favorable regulatory environment, according to A.T. Kearney's Global Retail Development Index last year. China came in second, a ranking mostly driven by size and the continued evolution of its retail environment, despite slowing economic growth overall, according to that report.
India presents retailers with growth opportunities, including some advantages that can't be found in China. A large proportion of the growing middle class there is English-speaking, relatively young and mobile-first. While in China there's a Chinese equivalent to Facebook, Twitter and other social media platforms, the most widely used ones in India are the very ones that are widely used in the U.S. India gives Facebook its second-largest membership base, after the U.S. That means brands have one less barrier to bust through when reaching Indian consumers.
In India a growing economy and growing interest among consumers in foreign brands, combined with a loosening of restrictions governing foreign ownership of India retail concerns, are creating huge opportunity.
The country is home to one of Amazon's longest standing international business units, and the company recently began making some headway against Flipkart, its main rival there. Last year Amazon also took a 5% stake in Indian retail company Shoppers Stop Ltd. Already, American brands constitute 35% of all foreign brands in India, followed by U.K. brands (12%), Italian and French brands (8% each), and Japanese, Swiss and German brands (5% each), according to a 2015 Indian retail report from London-based real estate consultancy Knight Frank.
There are some challenges there, too. While mobile is well established and e-commerce is growing, the physical infrastructure needed to get goods from point A to point B is in need of further development, according to experts. That means that retailers used to being able to offer two-day shipping to just about anywhere in the U.S. or Europe can only manage that in certain parts of India.