Quick Commerce Players Like Zepto, Swiggy's Instamart To Sell Private Labels To Increase Their Margins

Quick delivery service players like Swiggy’s Instamart and Zepto are looking to launch private label products to improve their profit margins, Economic Times (ET) reports.

Private label products are the goods that retailers sell under their own brand names. Several e-commerce companies like Amazon gain a greater margin by selling private labels in comparison to third-party brands.

Aadit Palicha, co-founder of Zepto, has told ET that the company will begin selling its private labels by the second or the third quarter of 2022.

Zepto’s private labels will include cooking essentials, general merchandise and staples.

“When you’re doing private labels, you need to focus on categories that have a high degree of substitutability,” Palicha was quoted in a report by the aforementioned publication.

He added, “We have partners for our hubs that sell inventory and we will be supporting them down the road with logistics if they would like to do private label.”

According to Palicha, private labels help a company add 3 per cent to their operating earnings margin.

Swiggy will reportedly launch its private labels by March 2022. They will include only non-food products like dustbin bags, toilet cleaners and cleaning equipment amongst others in this segment.

Cut-throat competition in the quick commerce space by players like Zomato, Zepto, Swiggy and Dunzo has apparently led to this latest development.