Private label picks up popularity in India
Consumers in India now perceive store brands to offer quality on par with national brands, thereby shifting bargaining power from FMCG companies to retailers. A Datamonitor report, The Impact of Private Labels on FMCG Companies in India, says that retailers who began launching their private labels as a value alternative to national brands are now matching those brands with respect to product packaging and claims but offering products at a lower price. In addition, many retailers have introduced tiered pricing to cater to a wider audience.
Consumers in India now perceive store brands to offer quality on par with national brands, thereby shifting bargaining power from FMCG companies to retailers. A Datamonitor report, The Impact of Private Labels on FMCG Companies in India, says that retailers who began launching their private labels as a value alternative to national brands are now matching those brands with respect to product packaging and claims but offering products at a lower price. In addition, many retailers have introduced tiered pricing to cater to a wider audience.
The rapid adoption of private label brands is said to have begun in the household care segment. But, as Datamonitor explains, a customer satisfied with a private label brand in a low involvement category such as household care will have a greater propensity of trial in other categories including personal care.
Vaibhav Khera, director, India consumer markets research at Datamonitor believes that FMCG companies can avoid competition by investing in innovation and product differentiation. “FMCG companies should play on their strengths and monetise opportunities emerging due to changing consumer behaviour,” he says.