"Indian consumers are far more demanding than most retailers imagine and that brand equity has a stronger bearing than minimum quality standards," says AC Nielson India director (retailer services) Raghavan Ranganathan.
The survey suggests that the visual cues and positioning provided by packaging are clearly deficient in private labels. 70% of Indians cited poor packaging as inhibiting private label purchase.
A majority of shoppers in India consider private labels to be 'budget brands' although 70% of respondents claim that not knowing enough about these brands is most likely to be preventing them from considering adding these brands to their shopping baskets.
Thus, private labels get a preferred mention in promotions run by Food Bazaar. On an average, Food Bazaar earns 10% higher gross margins on private labels than their national branded counterparts.
Indians are more demanding than most retailers imagine and brand equity has a stronger bearing than minimum quality standards
AC Nielson's survey clearly showed that the longer consumers have been exposed to private labels - in terms of product life cycle and penetration in retail stores' total category volume sales - the better they think of them.
The private label of Shoppers Stop contributed 20% to their annual sales in 2004-05 as compared to 17% in the previous year but the overall sales of traditional brands has gone up by 38%.
Thus, there is no dent happening on branded segment. Madura Garments brand head Vineesh Chadha concurs," We only display a part of our merchandise range in the departmental stores and shopping malls so there is no real threat from their in-house brands.
Our exclusive outlet stores an exhaustive range of merchandise for real buyers, thus making malls only a sampling ground of our products.