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Economic Crisis – Boom for Private Brand Labels in India ?

November 24, 2008


Is the Global Economic crisis presenting an opportunity for Indian Retailers to develop products suitable for the conservative Indian consumer who is now looking at value for money ? Across the board, retailers expressed optimism in selling their Private Brand Labels.

Vishal Megamart has witnessed a surge in sales of private labels from 5-6% of total turnover to 17-18% in the last 3-4 months and the company is expecting it to go up to 50% in the next 24 months. Spencers Retail has also witnessed similar trend and the company hopes to achieve 45% of topline from private label brands of its own within the next 24 months.

Last week, we already covered about Future Group’s plans for Private Brand Labels in India. Future Group is targeting Rs 10,000 crore [$2 bn] revenue from the same. Mr. Kishore Biyani, India’s Retail Pioneer said,

Having achieved stupendous success in some our private label consumer brands – Tasty Treat, Fresh & Pure, Koreo, DJ&C we felt that it is the right time to extend it to broader categories such as health & beauty, dairy, accessories, etc. hence we have drawn an ambitious plan of achieving Rs 10,000 cr sales within the next 4 years from this segment.

Future Group’s total sales across all retail formats for FY10 is expected to be Rs 10,900 crore. So an ambitious target of Rs 10,000 cr in 2013/14 from Private Labels is really appreciable. In our view, Future Group has understood the Indian consumer very well its target is achievable. Additionally, not every retailer will taste the same level of success in private label business.

So MNC brands and retailers, you’ve gotta wake up as you see a big competition here from Indians.

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