The Rise of Private Label Brands in E-Commerce Platforms

Industry & Competitive Context

The Indian e-commerce market crossed USD 60 billion in gross merchandise value in fiscal year 2023, growing 22 percent from the previous year, and is projected to reach USD 325 billion by 2030. Against this backdrop, the two dominant marketplace players — Amazon India and Flipkart — together held a combined market share of approximately 73 percent of India's online retail market as of 2022, with Flipkart leading at 38 percent and Amazon India at 35 percent, according to estimates from Redseer Strategy Consultants. India had over 270 million online shoppers by 2024, a consumer base that is rapidly expanding into Tier II and Tier III cities driven by smartphone penetration and affordable data.

In this hyper-competitive landscape, e-commerce platforms have faced structural profitability challenges. Marketplaces, by design, generate commission and advertising revenue from third-party sellers. However, as customer acquisition costs have risen and price-led competition has intensified, platforms have increasingly turned to private label brands — products manufactured by third parties but sold under the platform's own brand identity — as a mechanism to improve unit economics, deepen customer loyalty, and gain greater supply-chain control.

Private labelling is not a new retail phenomenon. Offline retailers such as Big Bazaar and HyperCity pioneered the model in India's modern trade. What changed in the e-commerce era was the strategic advantage platforms gained by combining proprietary consumer data, algorithm-controlled search visibility, and logistics infrastructure — all operating simultaneously on a single owned shelf. This intersection transformed private labels from a margin-improvement tactic into a competitive architecture in its own right.

The Strategic Logic: Why Platforms Build Private Labels

E-commerce platforms operate a dual role — they function simultaneously as neutral marketplaces and as sellers of their own in-house brands. This structural duality is at the core of both the commercial opportunity and the regulatory controversy surrounding private labels.

From a business model standpoint, private labels offer platforms two primary advantages. First, gross margins on private label products are structurally higher than those earned from third-party seller commissions. BigBasket's co-founder Vipul Parekh publicly stated that the company's goal was to grow private labels to 40 percent of total sales, explicitly citing better margins and better quality control as the rationale. Second, private labels enable platforms to address product gaps in categories where branded supply is either fragmented, low-quality, or excessively priced relative to consumer willingness to pay. This is particularly true in staples, daily-use household goods, basic apparel, and fresh produce — all categories where brand preference among consumers is relatively low and functional utility drives purchase decisions.

Crucially, platforms also possess an informational advantage unavailable to conventional retailers: real-time access to purchasing data across millions of transactions. This data reveals which product categories have strong demand but inadequate branded supply, which price points represent conversion sweet spots, and which quality attributes consumers actually prioritise. Private label launches backed by such demand intelligence carry significantly lower product-market fit risk than those of standalone consumer brands operating with limited market research.

Platform-Level Execution: Amazon, Flipkart/Myntra, and BigBasket

Amazon India

Amazon launched its first private label — AmazonBasics — in 2009 globally, entering India subsequently with brands including AmazonBasics, Solimo (household and personal care), Vedaka (groceries, spices, and staples), and Amazon Essentials (apparel). By 2019, Amazon had disclosed approximately 158,000 private-label products across 45 brands globally. Solimo's initial positioning was centred on kitchen and home goods, but it progressively expanded into overlap with AmazonBasics, entering categories like personal care products including shampoos, mouthwash, and razors — areas where national brands hold strong equity but where price sensitivity opens space for private alternatives.

Amazon's merchandising approach for private labels included placement in the most prominent search positions. Reports documented that searches for staple categories such as ground coffee, almonds, and melatonin resulted in Amazon's own brands appearing in the top-left position on search results — the most commercially valuable placement — ahead of third-party brands that had bid for the slot through paid advertising. An Amazon spokesperson characterised this as "merchandising placement" rather than reserved shelf space.

However, Amazon's private label strategy underwent a significant contraction from 2022 onwards. As reported by The Wall Street Journal and confirmed by CNBC, Amazon cut 27 of its 30 apparel brands, retaining only Amazon Essentials, Amazon Collection, and Amazon Aware. Furniture brands Rivet and Stone & Beam were also discontinued. By August 2023, Amazon had reduced its overall private label portfolio to fewer than 20 brands from a peak of 45. Matt Taddy, Vice President of Amazon Private Brands, publicly stated that the company had "looked to eliminate some in-house products after determining they didn't resonate with customers." Separately, Amazon acknowledged to regulators that private label brands represented approximately 1 percent of its total retail sales globally — indicating that despite media attention, the absolute scale of the private label contribution remained modest relative to the overall GMV of the marketplace.

The retreat was driven by two concurrent forces: slowing consumer demand for several non-branded categories, and intensifying antitrust scrutiny. The US Federal Trade Commission filed a lawsuit against Amazon alleging the use of anticompetitive strategies to maintain monopoly power. In India, the Indian government had placed restrictions on the sale of Solimo and AmazonBasics as early as February 2019 amid antitrust concerns.

Flipkart and Myntra

Flipkart launched its first private label, Smart Buy, in 2016 — an umbrella brand spanning over 30 categories including electronics and household goods. The portfolio subsequently expanded to cover more than 150 verticals. However, Flipkart's most commercially significant private label strategy was executed through its subsidiary, Myntra, in the fashion and apparel category.

Myntra's private label portfolio — which includes Roadster, Anouk, HRX, Dressberry, Mast & Harbour, and Moda Rapido — has been among the most successful examples of platform-native brand building in Indian e-commerce. HRX, co-created with Bollywood actor Hrithik Roshan, reported revenues growing from approximately Rs 8.16 crore in FY23 to Rs 8.54 crore in FY24 as publicly reported. Myntra's private labels as a group accounted for approximately 26 percent of its sales during the festive season of October 2020, and by 2023, industry estimates placed the overall private label contribution at approximately 30 percent of Myntra's total sales.

The strategic architecture behind Myntra's private label success differs meaningfully from Amazon's approach. Rather than positioning private labels as generic value alternatives, Myntra invested in brand-building: distinct visual identities, category-specific positioning, celebrity associations, and curated product ranges. Roadster was built around casual lifestyle and outdoor wear; Anouk was positioned in women's ethnic fashion; HRX in fitness and active lifestyle. The branding was legible enough to travel beyond the Myntra platform — Myntra has reportedly explored selling some of its private label brands through other channels.

Myntra also embedded its private label brands into new product initiatives: the launch of FWD, a Gen Z-focused in-app experience introduced in 2023, explicitly featured private label brands like Roadster and Sangria as anchor offerings alongside external fashion brands.

BigBasket

The deepest and most structurally embedded private label strategy in Indian e-commerce belongs to BigBasket, now owned by Tata Digital. The company has built a private label business estimated at approximately Rs 4,000 crore in FY24, according to its Chief Buying and Merchandising Officer Seshu Kumar Tirumala, who disclosed to Inc42 that close to 40 percent of BigBasket's Rs 10,062 crore in FY24 sales came from in-house and private label brands. In FY25, despite an overall revenue decline and the company's transition to the quick commerce model, private labels continued to contribute close to 30 percent of total sales.

BigBasket's private label portfolio is structured around category-specific brand identities: Fresho covers fresh fruits, vegetables, and dairy; BB Royal anchors agri-commodities and staples; BB Royal Organic caters to the premium health-conscious segment, accounting for 45 percent of overall agri-commodity sales on the platform; Tasties serves packaged snacks; and BB GoodDiet targets the healthy snacking category. The company has also developed Indie Secrets for traditional and regional food items.

What distinguishes BigBasket's approach is its stated philosophy of treating private labels as independent brands rather than as low-cost alternatives. The company employs dedicated product managers for each brand responsible for sourcing, quality, and commercial growth — a structure that mirrors FMCG brand management practice rather than conventional private label operations. The company also instituted a rating-based quality control system where products falling below a rating of 3 on the platform are discontinued and relaunched, enforcing a market-feedback loop that external FMCG brands rarely have access to on a comparable scale.

BigBasket has also taken its private labels offline through the launch of Fresho physical stores, with a vision of opening 200 outlets across India by 2023 and 800 by 2026 — extending private label brand equity beyond the digital shelf.

Positioning & Consumer Insight

The consumer insight underpinning private label growth in e-commerce can be framed through the lens of Mental Availability and Category Entry Points from the Ehrenberg-Bass perspective. In low-involvement categories — staples, household consumables, basic apparel — brand mental structures are weak among a large proportion of consumers. Purchase decisions are governed more by price, convenience, and trust in the platform than by loyalty to a particular manufacturer's brand. E-commerce platforms, by virtue of their scale and daily touchpoints, possess a level of ambient consumer trust that few product brands can match at equivalent cost.

This creates a structural opportunity: consumers searching for "rice" or "batteries" on a platform they trust exhibit relatively low resistance to choosing a platform-branded option when it is priced competitively and displayed prominently. The platform's trust equity effectively transfers to the private label at the moment of discovery — bypassing the years of advertising investment a conventional brand would require to establish comparable awareness and purchase intent.

In fashion, however, the dynamic is more complex. Clothing carries higher expressive and functional risk, and brand meaning matters more. Myntra's success with labels like Roadster and Anouk is partly attributable to the platform's ability to signal aspirational quality and trend-relevance — attributes built deliberately through product design, influencer integration, and campaign investment — rather than relying solely on platform trust transfer.

The Regulatory & Competitive Friction

The rise of private labels on e-commerce platforms has generated significant regulatory scrutiny globally and in India. The Competition Commission of India ordered investigations into both Amazon and Flipkart in January 2020 following a complaint filed by the Delhi Vyapar Mahasangh, a traders' association. The allegations included preferential listing of platform-affiliated sellers, deep discounting practices, and the use of private labels through preferential distribution channels — conduct alleged to violate sections of the Competition Act, 2002. In August 2024, CCI investigation reports — running to 1,027 pages on Amazon and 1,696 pages on Flipkart — were reported by Reuters to have found the companies in breach of antitrust laws. Both companies had attempted to block the investigation through legal challenges, which were ultimately dismissed by the Supreme Court of India in August 2021.

In the United States, the FTC filed an antitrust lawsuit against Amazon. In Europe, Amazon faced separate antitrust investigations. Amazon founder Jeff Bezos, when asked before the US Congress whether the company's policy against using seller-specific data to develop private labels had been violated, acknowledged he could not guarantee the policy had never been breached.

Third-party sellers have responded to the growing private label presence by diversifying distribution, investing in D2C channels, and building platform-independent brand equity. The broader implication for the market is a structural tension: platforms profit by hosting and growing third-party seller ecosystems, but they also profit by converting unbranded demand into owned-brand revenue. Resolving this tension — or at least governing it transparently — remains one of the defining regulatory challenges of the Indian and global e-commerce era.

Business & Brand Outcomes

The documented commercial outcomes across platforms confirm that private labels, when executed with strategic discipline, deliver material business results. BigBasket's private label revenue of approximately Rs 4,000 crore in FY24 represents the largest private label business in Indian e-commerce. Myntra's private label portfolio contributed approximately 26–30 percent of sales across reported periods. Amazon's global private label reach of 158,000 products across 45 brands in 2019 represented a significant portfolio investment, though the subsequent contraction to fewer than 20 brands by 2023 illustrates the limits of breadth-driven strategies in the face of execution challenges and regulatory pressure.

A KPMG report cited by industry sources estimated that online private label sales in apparel could reach 40 percent of category sales by 2022 from 25 percent in 2019, and grocery private labels could reach 45 percent from 40 percent. The same report estimated online private labels growing 1.3 to 1.6 times faster than the overall e-commerce market during the 2019–2022 period.

No verified public information is available on category-specific operating margins for private label portfolios of Amazon India, Flipkart, or Myntra on a standalone basis. No verified public information is available on customer acquisition or retention metrics disaggregated specifically for private label purchasers across any of the mentioned platforms.

Strategic Implications

Several strategic lessons emerge from analyzing private label development across e-commerce platforms, and these have implications not only for platforms themselves but for consumer goods brands and regulators.

The first implication concerns the nature of platform power. A marketplace that controls both the demand aggregation infrastructure (search, recommendation, advertising) and the supply of competing in-house products occupies a structural position that is without precedent in conventional retail. The digital shelf is not merely a distribution channel — it is an algorithmically curated space where visibility is commercially controllable. This fundamentally changes the competitive dynamics for any brand that depends on marketplace distribution.

The second implication concerns brand-building strategy. BigBasket and Myntra demonstrate that private labels can aspire to genuine brand equity rather than being positioned purely as commodity alternatives. The critical success factor is category selection: in categories where functional attributes dominate and brand meaning is weak (staples, household consumables), price-advantage positioning works. In categories with higher expressive or experiential content (fashion, lifestyle), private labels must invest in brand architecture comparable to conventional FMCG or fashion brands.

The third implication relates to the limits of portfolio breadth. Amazon's contraction from 45 to fewer than 20 private label brands underscores that scale without focused execution dilutes both brand equity and operational efficiency. Managing private labels at FMCG brand-management standards is resource-intensive, and platforms whose core competency lies in technology and logistics may not be structurally equipped to build and sustain large numbers of consumer-facing brands simultaneously.

The fourth implication is regulatory. The dual role of platforms as marketplace neutral parties and as competing sellers will continue to attract antitrust attention in India, the US, and Europe. Platforms that develop transparent governance frameworks for algorithmic search rankings and private label placement are likely to face lower regulatory risk than those that rely on algorithmic advantage as the primary lever for private label growth.

Finally, for third-party brands and D2C challengers, the rise of platform private labels creates a strategic imperative: building brand mental availability and distinct emotional associations independent of any single distribution channel is no longer optional. Brands that are discoverable only through marketplace search are structurally vulnerable to private label displacement in exactly the categories — commoditised, price-sensitive, low-involvement — that marketplace algorithms are best designed to capture.

Discussion Questions for MBA Classroom Use

1. Amazon strategically retreated from 45 to fewer than 20 private label brands between 2019 and 2023, citing both customer resonance and antitrust pressure. Using the frameworks of portfolio strategy and competitive positioning, evaluate whether this contraction represents a strategic correction or a structural failure of Amazon's private label model.

2. BigBasket and Myntra have each built private label businesses contributing 30–40 percent of revenue, yet through markedly different brand strategies. Compare their approaches using the STP (Segmentation, Targeting, Positioning) framework and assess which model is more defensible against competitive disruption from quick commerce entrants like Zepto.

3. The CCI investigation into Amazon and Flipkart raised fundamental questions about the "dual role" of e-commerce platforms — simultaneously acting as neutral marketplace operators and as in-house brand sellers. From a competition policy perspective, what structural remedies or governance mechanisms would best balance innovation incentives for platforms with fair market access for third-party sellers?

4. Consumer trust in a platform brand (Amazon, Myntra) can transfer to private label products at the point of discovery. However, this trust transfer is not uniform across categories. Using the concept of Brand Relevance and category involvement theory, identify three categories where platform trust transfer would be highly effective for private label growth and three where it would be insufficient — and explain the underlying consumer psychology.

5. As quick commerce platforms like Blinkit and Zepto begin developing their own private labels (Zepto's Relish and Daily Good), how should established FMCG brands reconsider their distribution strategy and channel economics? Design a strategic framework that a mid-size Indian FMCG brand could use to assess its vulnerability to private label displacement across its key categories and distribution channels.