BPL Cuts Ties With Flipkart, Joins Amazon Instead

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popular consumer electronic brand BPL has ended its three-year partnership with ecommerce retailer Flipkart. The duration of the agreement was till 2018.

As per a Mint report, BPL has just launched its products on Amazon India to sell large appliances such as TVs, air-conditioners, washing machines and more. There is no concrete proof yet on from which side the termination was initiated.

BPL’s history in India dates back to the 90s when it was a household brand name for television. Then it went completely out of picture in the large appliances segment. It was May 2015, when BPL re-entered this segment after a gap of almost 10 years, via Flipkart.

As mentioned on the company’s LinkedIn profile, “We were determined to venture back into the consumer electronics market. A survey conducted by India Today acknowledged us as one of ‘Top Three Most Recalled Brands in India’. In a strident move in 2015, we launched a brand new range of products with the ever growing e-commerce giant, Flipkart.”

At the time, BPL’s Chairman and Managing Director, Ajit G Nambiar told BusinessLine, “In today’s environment, using the ecommerce platform is the best way to get back into business. We have had a soft launch of our TV sets sometime ago, and it is already among the top three brands on Flipkart’s platform. The company has invested upto $7.7 Mn (INR 50 Cr) to relaunch its consumer electronics operations and expects to end the fiscal with revenues of $15.5 Mn (INR100 Cr).”

However, the company was distressed due to lack of visibility on the ecommerce platform and “believed the ecommerce firm did little to promote BPL, resulting in lower-than-expected sales,” according to Mint sources.

In an interview with Mint, Nambiar indicated the firm’s intention to connect with Amazon India earlier today. He said, “Things like Alexa, Prime, etc.—these are things that a lot of Indians are discovering…We’re talking about expanding our range—from televisions to washing machines and refrigerators to microwaves, etc. (Amazon) offers so much, so it was a given that we work together and make this happen.”

When Inc42 reached out to Flipkart sources for a comment, they said, “BPL’s share in terms of sales was falling hugely on the Flipkart platform over the last six months. From 15%-20%, it came down to just 3% in the last quarter. This was on the back of brands such as Samsung and Panasonic launching more tech-advanced, online-only variants on Flipkart.”

“BPL was unable to match up in terms of technology and lacked the Smart TV range – a popular customer demand in the TV segment. Limited product portfolio also added to the de-growth. Flipkart’s top performing VU TV(a Flipkart exclusive) has more than 20 TV models as opposed to BPL that only had 5.” This statement was made by a person familiar with the matter who did not wish to be named.

Flipkart forayed into electronics category in 2012 which, after a year of operation, was discontinued. However, the company re-entered this segment in April 2014 and since then there has been no looking back. After mobiles and fashion, electronics is one of the strongest categories on Flipkart due to low, standard margins and deep discounts.

In December 2016, the company also launched its private label brand Flipkart SmartBuy, which ranged across 25-30 categories in electronics, electronic accessories and home plastics for starters. Earlier in 2014, Flipkart launched private label Citron that offered products under the home appliances and personal healthcare category. That was the third private label by Flipkart. Previously, it had launched Digiflip in consumer electronics.

While a case of sour lemons can be argued for the broken partnership, with each side defending their decision in the best manner possible, it is evident that fellow contender Amazon India is having the last laugh, having won this particular round of the ecommerce battle.

 

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