A recent research study “Private Label & Indian Consumer Insight 2010” by TechSci Research has revealed the transformation of organized retail industry shelf space in India due to introduction of private label by organized retailers in recent years. These in house developed brands have helped the retailers to garner high margins as compare to branded products across multiple product offering. As per study, the margins from private labels range between 10%-15% in case of FMCG products and as high as 40%-60% in case of apparels sales.
According to Sr. Consultant (Retail Practice) at TechSci Research, “the inclusion of private label across multiple product offering enables the retailers to improve its margins without any huge investment on marketing and advertising activities. Beside this, private label also enables the retailers to generate consumer loyalty towards it in house brand there by resulting in long term consumer retention for their retail chain”.
The consumer acceptance towards private label has been found to be positive. As per the research study “Private Label & Indian Consumer Insight 2010” findings, close to 85% of the surveyed consumer have shown their willingness to repurchase the private label promoted by the respective retailer. The consumption of private label has helped Indian consumer to bring down their monthly consumption bill by 8%-10% depending upon the product categories.
Majority of the retailers in India have introduced their own private label driven by increasing consumer acceptance and associated economic benefits. Retailers like Spencer’s, Future Group, Reliance Retail and Bharti Wal-Mart have been working continuously to create a spectrum of private brands in order to restructure their product portfolio in coming years. This new development can be seen as new strategic move to have an operational edge over their competitor and to retain their increasing customer base.
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