Amazon top seller RattanIndia Enterprises to launch private labels

Its unit, Neobrands, will be scaled up as a house of brands

Marking a significant change to the way selling is done on Amazon.in, RattanIndia Enterprises will launch a raft of private labels that will retail on the e-commerce platform as direct-to-consumer offerings. Cocoblu Retail, RattanIndia’s fully-owned subsidiary, has emerged this year as one of the largest sellers on Amazon India, having taken a large chunk of the business that used to be with Cloudtail.

Private labels are brands owned by a retailer that does not make the goods, but gets them made through a manufacturer under its label.

Cloudtail, Amazon’s joint venture with N R Narayana Murthy’s Catamaran Advisors, was a large seller on Amazon.in till last year. But it did not have any private labels. Nor does Appario, a joint venture between Amazon and the Patni group, which is a large seller on Amazon.in but will soon be delisted from the platform. Amazon India, an online marketplace, does have its own private labels such as Solimo and AmazonBasics.

The launch of private labels by RattanIndia, to be announced in a matter of days, also marks the next big step in its morphing from a primarily power and infrastructure group into a consumer-focused one.

“As a vital next step in transforming RattanIndia into one that has a significant play in consumer-facing areas, we are creating a house of brands under Neobrands. To begin with, we will launch a number of brands in fashion and apparel that will retail on Amazon through dedicated online stores,” Anjali Rattan, business chairperson, RattanIndia Enterprises, who is spearheading the creation of brands, told Business Standard.

Reports said that India’s direct-to-consumer market, which was growing rapidly, could reach $100 billion by 2025. Of this, fashion brands, several of them owned by start-ups, have the dominant share.

Neobrands, under which RattanIndia’s private labels will be housed, is another of its fully-owned subsidiaries. The initial brand launches will be in the areas of apparel — fashion, casualwear and fitness. There will also be merchandise related to Revolt, the electric motorcycle company owned by the group.

The group plans to scale up Neobrands as a house of brands, a strategy whose efficacy was demonstrated by the United States-based Thrasio, which acquired and scaled up brands that did wonders on Amazon. In India, Mensa Brands, led by Ananth Narayanan, the former chief executive officer of Myntra, adopted the house-of-brands approach to rise to the status of a unicorn, the term for a privately-held company, or a start-up, valued at more than $1 billion.

In the first phase, Neobrands’ labels will be digital natives sold directly to consumers through e-commerce platforms. Later, a digital-led channel will help the company scale up the retail footprint of its brands across the country.