Will Flipkart’s gamble with new private label fashion succeed?

Flipkart is betting big on fashion with the launch of its private label ‘Divastri’ that includes 1,500 styles focused exclusively on women’s ethnic wear.

If electronics is the king of GMV, fashion is the king of margins in online commerce. Indian online market for fashion is estimated to be worth $12-14 billion by 2020 from the current $4 billion, according to a study by Boston Consulting Group (BCG) and Facebook.

Home-grown e-commerce unicorn Flipkart, aware of this estimate, has, in the past three years, focussed on this category to ensure that it remains the market leader. In 2014, it acquired Myntra, and in 2016, Jabong. The alliance now claims to have 70 percent of market share in online fashion, with Flipkart alone claiming to have 35 percent.

In its latest effort in this regard, Flipkart has launched its private label in fashion—women’s ethnic wear ‘Divastri’—which includes more than 1,500 styles of sarees, lehenga cholis, and dress materials. This is part of ‘Flipkart Smartbuy’, an umbrella brand that was launched in December 2016, to sell in about 50 categories, including consumer electronics and home category. But fashion is its big bet.

Rishi Vasudev, Head of Fashion at Flipkart, says that all Divastri products will be under ‘Flipkart Assured’ scheme – which means they have gone through six steps of quality check. Flipkart’s initial focus, he adds, is on establishing the private label’s positioning in terms of quality, design, and pricing, which in turn will lead to sales and revenue.

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