OVERVIEW 1
Catalyst 1
Summary 1
Table of Contents 2
Table OF FIGURES 3
Table OF TABLES 4
THE FUTURE DECODED 5
INTRODUCTION: After household care, private labels pose most threat in the food and beverages category 5
TREND: Private label evolution in India is emulating Western markets 7
Import of locally unavailable products and repackaging with retailer's logo 8
Private labels available as a value alternative 8
Different variants of private labels made available under the value and premium range 9
Private labels launched to address specific consumer segments 9
Private labels launched with higher order value proposition 9
Key takeouts and implications: The next stage of evolution for Indian retailers will be to focus on products targeted at specific consumer segments 9
TREND: Retailers are expanding their private label portfolio and targeting multiple consumer segments through tiered pricing and claims 10
Having established a significant presence in the household care segment, Indian retailers are now launching private labels in ready-to-eat foods, beverages and personal care segments 10
After beginning as an 'economical alternative', some private label offerings are now tiered across different price points 17
Retailers are building private label brands with product attributes that mirror national brands 21
Retailers are investing in individual brands comparable in quality and price with the national brands 22
Key takeouts and implications 23
INSIGHT: Indians are attaching significant importance to natural/organic ingredients in personal care products but not in the food and beverages category yet 25
Key takeouts and implications: FMCG companies looking to differentiate their offerings from competitors can focus on organic products 27
INSIGHT: Customer service, convenient store opening hours and in-store ambience are key influencers for purchase decisions 28
Key takeouts and implications: Indians are increasingly preferring modern retail formats for shopping which has made the role of retailers more significant 30
INSIGHT: Private label adoption among Indian consumers is not only based on price but also perceived quality 31
Key takeouts and implications: Success of private labels in the household category increases their propensity to trial in the food and beverages and personal care categories 32
ACTION: Differentiate product offerings with unique packaging and product design to avoid competition from private labels 33
Results-led innovation has been vital in continually engaging consumers and preventing basic commodity status of products 33
National brands need to invest in innovative packaging to clearly differentiate themselves from private labels 34
ACTION: Focus on new customer segments for generating higher growth 35
FMCG companies should consider launching several variants of their products to cater to localized needs or different consumer segments 35
FMCG companies should increase focus on product development and logistics to target the high growth rural market 37
Launch of low cost products for rural India can help FMCG companies boost earnings 39
ACTION: Determine whether you want to manufacture private label brands or not 40
APPENDIX 44
Definitions 44
Methodology 44
Further reading and references 45
List of Tables
Table 1: Private labels launched across categories by Reliance, More, Spencer's, and Big Bazaar 11
Table 2: Illustrative price comparison between More's private labels and leading national brands 21
Table 3: Sach tetra milk launched with product claims similar to leading national brand Nestle 23
Table 4: Indian consumers attach significant importance to natural/organic ingredients when purchasing personal care products 26
Table 5: Indian consumers consider private labels as good as national brands in quality in the food and household care categories 31
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