Online retailers are following what most of the offline retailers have been doing for the past several years - developing private labels wherever they are able to. The advantage that the private labels offer is in the margin. According to a Mint report, BigBasket is now planning to launch its private labels in meat products and in cosmetics. Meat is already sold on its platform, but the category will now be expanded and separately labeled and sold.
In the beauty products category as well, BigBasket will see the launch of several products under its own label, while selling the popular brands simultaneously.
Fresho is the private brand that the online grocer uses for all its grocery and food items being already sold on its site. In addition, products like idli and dosa batter are also under this brand. For staples, BigBasket has Royal and Popular brands as well.
Another stream of buyers that BigBasket has started catering to is the institutional ones like hotels, restaurants and caterers and meeting their demands could mean setting up of a larger module of the supply chain already in existence. BigBasket is working on it. The private labels being developed will be used there also.
So, private labels sales within the overall basket, is expected to shoot up to 45% from the current level of around 34%.
In other BigBasket related developments, as already reported on these columns, the company plans to start a subscription service (similar to Amazon Prime), that will help in creating a large and permanent customer base. In the offline traditional brick and mortar business many retailers small and big have created their own customer loyalty programmes where every time you buy something you get awarded a few points which can be encashed later.
BigBasket is going to use the Milk vendors’ coat tails to achieve this objective of creating this customer base or subscription accounts. BigBasket is also trying to woo a few startups which are engaged in delivering milk to customers who subscribe to this service online. BigBasket could either take them over completely or join hands with them. The company is seeing this purely as a tool to ramp up its subscription model rather than entering the milk delivery business per se. BigBasket is also trying to build a complete story around the milk supply by adding other Fresho products like bread, eggs and so on.