Private labels of Indian retailers lag in visibility

Mumbai, Nov 20 | Updated: Nov 21 2005, 05:47am hrs
Private labels or in-house brands have a long way to go before they could possibly threaten the supremacy of large, national brands, says an AC Nielsen online consumer opinion survey polled over 21,100 respondents in 38 markets in Europe, Asia Pacific, North America, Latin America and South Africa.

"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.

Poll Findings

Indians are more demanding than most retailers imagine and brand equity has a stronger bearing than minimum quality standards
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 Indians also consider private labels to be good value for money and offering quality similar to big brands. However, 80% of Indian consumers feel that there are still some quality products not suitable for private labels, contrary to the global average of 40%.

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.