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Flipkart inks exclusive pacts for fashion biz

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Flipkart is entering into exclusive licensing agreements with brands like Provogue, Swiss Military, Carlton London and Chemistry, among others, as the online retailer looks to cement its leadership position in the fashion and lifestyle category.
The move is aimed at getting greater control on the product range and pricing of these brands, a company executive said. Flipkart, which also owns Myntra and Jabong, plans to manufacture some of the products for these brands which will be available only on its platform.
Rishi Vasudev, VP at Flipkart Fashion, said these partnerships would ensure that a broader range of products is listed under Flipkart-Assured, its newly launched programme that guarantees an overall better consumer experience and quality.
Flipkart has also inked an exclusive brand tie-up with Peter England for PE shoes and Flying Machine, Vasudev said. In the fashion and lifestyle segment, footwear is one of the biggest revenue generators for the e-tailer. “We are outsourcing the manufacturing of these products to different partners. Footwear has very high penetration online — close to 35% of the organised market. It has become the main channel for most brands to sell, so we have launched this exercise with footwear,” he said.
The latest move from the country’s largest e-commerce player comes at a time when it is approaching the festive season (a key period for major e-tailers in India), more so this time around as it fights Amazon.
Fashion is among the top two categories for the Bengaluru-based company. It recently acquired Jabong for $70 million, marking its clear dominance in the online fashion market. As a segment, fashion offers the highest margin for online retailers compared to categories such as mobiles and electronics, which are sold on wafer-thin margins.
“Flipkart Fashion dominates the online space in footwear with over 45% share. This category is three times of any other horizontal player and twice of any vertical player. Even in the unbranded segment, there are many sellers that derive around 50% of their total business from Flipkart alone. Sellers like Biosport, Advance Gear, Knight Ace have shown 4-8 times growth in the last six months. In fact, several sellers have seen such strong growth that they have become exclusive partners with Flipkart (like Biosport),” he added.
Fashion currently registers about $1.5 billion in GMV, or gross merchandise value, for the e-tailer. GMV is overall sales on an online marketplace, excluding discounts and returns. Flipkart has seen its sales stagnating over the past few months and is aiming to put its best put forward to increase them, especially when Amazon is threatening its leadership position in the domestic market. Flipkart aims to cross the $5-billion GMV mark by the end of this year.