So called “private labels” are products, manufactured by a company and sold under the retailer’s name. Those private label products, which are sold only in specific stores of a chain are also called “store brands”, “own brands”, or “home brands”. Globally, the private label retail market is widely shattered. While Europe recorded shares of private labels in the retail market of as much as 30 percent, the APAC region had a share of only about four percent.
The Indian private label market
India’s retail market had a market value of 950 billion U.S. dollars in 2018 and is expected to grow up to more than 1700 billion dollars by 2026. Private labels within the Indian retail market had a rather small share of the market but rose to new significance through its recent growth. Private label companies accounted for a higher growth than other types of manufacturers. Large retailers such as the retail-wing of Reliance Industries Limited based their business significantly on the retail of private labels.
Private brands: brands without branding
The main competitors of private labels are branded products. While a brand tag gave consumers the feeling of trust into the product, private labels convince through lower prices. Retailers prefer private labels through easy customization and therewith easier response possibilities to newly emerging customer needs. High investments into brand building or brand marketing are irrelevant factors for the growth of private labels.
Private brands among product categories
The FMCG sector has traditionally been a sector with higher shares of private label products as taste is more variable among every-day products. Especially among grocery retailers the share of home brands contributes significantly to the product portfolio. The focus on brands is more dominant in case of the purchase of durables. Along with the growth of modern trade, e-grocers such as BigBasket became a well-known private label retailer. High repeat purchase shares promised a continuation of growth.
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