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E-commerce makes the most out of private-label

The available trends in the e-commerce market, firms such as Pepperfry, Myntra, ShopClues, Flipkart and Amazon are increasingly directing their focus towards private-label brands to garner higher margins and to fill gaps in customer needs, as revealed by search query algorithms on their platforms. Online shoppers are lapping up these private labels, as evident from its increasing contribution to total sales, ranging from 12 per cent to over 50 per cent, in score of cases. Pepperfry, which has over the last five years built a portfolio of 9 private-label brands that contribute to nearly 55 per cent of its overall sales, has forayed into the Rs.6,000-crore mattress market in India with the launch of Clouddio, its 10th private label – it has other sub-brands such as Stratus, Cumulus, Nimbus, Altus and Cirrus. As per Chief Category Officer, Pepperfry, Hussaine Kesury, the rising demand for mattresses prompted the company to introduce its own private label to cater to the diverse consumer requirements in terms of the material, price, comfort and convenience. Private-label brands are usually more profitable as it gives e-commerce firms total control over the product design and specifications, sourcing, manufacturing, pricing, marketing and distribution. This, in turn, allows them to be made at lower costs, and as a result, be made available to customers at prices that are 15-20 per cent lower than products of well-known national and global brands. Similarly, fashion and lifestyle e-tailer Myntra’s private-label portfolio of 13 brands, including Roadster, HRX, All About You, Mast & Harbour and Dressberry, deliver about 23 per cent of its business at present. Myntra CEO, Ananth Narayanan, in an earlier interaction, said its private-label portfolio is a key pillar of the company’s strategy to building differentiated offerings.

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