Private Labels Beat MNC Brands – Way to Go

Retail Private Label - Tasty TreatIndian Retailers who jumped into the bandwagon of introducing their own private labels to beat the MNC brand competition has paid off well. Latest data from various retailers suggest that Private Labels of Retailers have either beaten the market’s leading brand or giving them a tough fight in organized retail stores.

More Retail Chain from the AV Birla Group has Feaster Private Label which sells more than the iconic brand Maggie from Nestle in the instant noodles segment. Thomas Varghese CEO of Aditya Birla Retail said,

We also sell more than the benchmark leader in the non-aerated fruit drink and squash category across our stores on a national level.

Future Group has already tasted the success with its Tasty Treat brand which is just behind Frito Lay in the potato chips segment. However, in the namkeen segment, the market is entirely dominated by Haldirams and Tasty Treat. In the baby diapers segment Care Mate commands a whopping 41% of in-store sales leaving Huggies behind. Future group’s highly successful brand John Miller has been spun off into a sperate entity to compete Peter England from Madura and John Players from the ITC Group.

Similari s the experience at RPG Spencers Retail. Samar Sheikhawat VP of Marketing said,

We have seen our Smart Choice cookies, diapers and agarbattis sell more than market leaders across the store chain. Besides, the lower pricing with quality being on a par, the downtrading customer has prompted these higher sales.

The secret behind this success is private labels are generally priced 15% less than their branded counterparts without dilution of margin. Since this is the beginning of the new era in retailing, most private labels which have acceptance is at the bottom of the pyramid of retail products. However, as these retailers mature and gain experience they want to move up the pyramid where realizations will be higher.

Related Reading:
Future Brands- Private Label to compete MNC Brands