India may become launchpad for Amazon's fashion label

NEW DELHI: Amazon plans to create its own brands in the booming fashion and lifestyle segment in the country, making India perhaps the first country where the US e-commerce giant has its own private fashion labels, two people familiar with the company's plans said.

Amazon India is currently building a team for its private brands and has interviewed people from leading online fashion retailers Myntra and Jabong, one of them said.

The other person said the US firm has already hired a couple of people for its private brands team, but is yet to find a person to head the business.

An Amazon spokesperson, in an emailed reply to ET's queries, said, "As a policy, we don't comment on what we may or may not do in the future."

The US online retail giant has built a sizeable business in India, but in the booming fashion and lifestyle business it's playing catch up with the likes of Myntra and Jabong, which have already fairly big operations.

Private brands -- or labels created by retailers themselves in tie-up with product developers or, in the case of garments, fashion designers, and sourced directly from producers -- give higher margins to retailers because there is no brand equity outgo and they can price them lower than national brands as they spend less on promoting such brands.

Nitin Chhabra, CEO at e-commerce consultancy firm Ace Turtle, said private labels gives higher margins to retailers in the rage of 55%-65% compared to 35%-40% margins selling others' brands. "Private labels tend to be great differentiators for retailers and they can plug the gaps on what companies otherwise provides and what consumers are looking for."

In the US, Amazon sells private labels including Pinzon brand of towels and bed-sheets; and batteries, USB cords, laptop bags among others under Amazon Basics. Last month, Amazon pulled its diaper brands Elements weeks after its launch amid customers' complains.

About three months ago, Amazon's US headquarters had placed an advertisement in social media site LinkedIn for the job of a category head for private brands to be based in Bengaluru. "This position is responsible for leading and managing the private label brands to maximize customer experience, sales, margin and turns," the post had said. "The person who joins our team in this critical leadership position must share our passion and commitment to giving Indian customers high quality fashion products."

In a September interview, Amazon CEO Jeff Bezos told ET that he is "excited" about the fashion business. "I think that some of the things we're doing with small and medium businesses actually probably applies everywhere," he had said. "And so, I'm very excited about that. Amazon Web Services, Kindle, Fashion, there are a bunch. We've got a lot of exciting frontiers," Bezos had said.                                       

                                                                                                                                                                                 Source: The Times of India