Recently, Flipkart nearly escaped its funds drought with the closure of a humongous $1.4 billion funding round at a down valuation of $11.6 billion. This capital infusion happened about a couple years post the previous funding round back in 2015. The homegrown e-tailer giant is now looking to utilize a chunk of this capital to build an in-house budget consumer goods brand called Billion.
Citing three sources aware of internal developments, LiveMint reports that Flipkart’s co-founder and executive chairman — Sachin Bansal has been working on the Billion brand ever since he was ousted from the chief executive position back in January 2016. This reshuffling saw co-founder Binny Bansal take upon the chief executive responsibilities but was replaced with Tiger Global executive Kalyan Krishnamurthy earlier this year.
Sachin Bansal-led Billion is being presented as a budget brand that will launch products across several verticals such as electronics, appliances, as well as accessories. If you’ve been thinking that you did notice some Billion-brand products on Flipkart, then you are not mistaken. The company has already debuted a handful of products– mixers, backpacks, and a few other products under the said brand. It is also planning to sell budget smartphones under the Billion brand in competition to Chinese and Indian phone makers.
This supplementary initiative will develop as a budget brand that will be squarely focused on building their user base by attracting new customers to the platform. And not just that, it is also one of Flipkart’s important bets to focus on increasing the sale of private label products, which will offer them higher margins. This will be because the same will offer them more revenue share than third-party sellers. Continuing to talk about the project, one of the sources added,
The brand is aimed at Middle India. You need a different set of products for customers in smaller cities and towns and that’s what Billion will do.
This further reiterates that the Bansal’s are attached with the ‘Billion’ moniker and try to accommodate in most of their mass-scale initiatives. Flipkart’s flagship sale event, which is well-known to the populace for offering hefty discounts, is also named ‘Big Billion Days’ as the company aims to reach a billion users with the same sometime in the lifetime of their operation.
Now, it is extending the same moniker to its consumer goods brand that’ll operate complementarity to the existing Flipkart brand. The said company will only build upon the company’s existing efforts, such as DigiFlip, which provide consumers with accessories, as well as budget smartphones and tablet devices. The company will most likely consolidate this brand and Billion will most likely represent the said category as well.
We’ll now have to wait and witness if this own-brand strategy pays off and helps the company support its growth in this moment of extreme competition being offered by American e-commerce giant Amazon. The latter is bulking up its complimentary services like Amazon Pay and Amazon Prime to attract the netizens while former is adopting a completely different strategy. Which do you think will pay off in the long term? Comment your thoughts down below.
