CHAPTER-2

PRIVATE LABEL BRANDS IN ORGANISED RETAIL

2.1 EMERGENCE OF PRIVATE LABEL BRANDS

India has been identified as the third most attractive retail destination among thirty
emerging markets globally [7]. Retail industry in India is anticipated to grow up to US$
950 billion (INR 64700 billion) by 2018, with a compound annual growth rate (CAGR) of
8.9 per cent during year 2000 to 2018. (IBEF, 2015)[8] The online retail market is
expected to grow from US$ 3.1 billion to US$ 22 billion (from approximately 10 per cent
to more than 15 per cent of the organized retail market during FY2013 to FY2018 [8]. In
this scenario of private label brands have gained considerable significance. The
emergence of retailer‟s own brand i.e. private label brand is a most crucial milestone in
organized retail history.The dynamic changing retail industry has resulted in growth of
large number of hypermarket and supermarket chains in developed countries such Europe
and United States ,with the evolution of these organized retail chains private label
products came into existence [9]. According to report [10], Europe has the highest private
label brand share of approximately 45% from last ten years followed by US, Canada and
Australia having approximately 18% share of private label brand which shows a rapid
growth in Private Label brands around the globe in past few years. Private labels brands
are entirely owned products by the retailer .These products are produced, sold and
market by the retailers (generally known as store brand, self-label brands, store brands or
retailer‟s brands[11].In recent times, various product innovations have made these items
quite popular in the retail market. Private Labels are top sellers in many product
categories sold in the US supermarkets [12].

According to a study Private label is a consumer product manufactured by or on behalf of

retailers and sold under the retailers' own name or trademark under their own outlets.
[13]. Another definition given by researchers simply defined private label as a brands
owned and sold by the retailer and distributed by the retailer [14]. A Private Label is the
product owned and sold by the retailers under their own stores or outlets.

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Private Label Manufacturer‟s Association (PLMA),has defined private label brands as a
complete merchandise sold under the name of retailers which may be its own name or
exclusively owned by them. The term retailers brand is also referred as store brand, in
house brand, private label,own label etc.Private label has come longway since their
existence initially they were considered as a low cost alternatives to the branded products
but now they have positioned them as a better quality product with appropriate price
therefore private labels have become a well defined staregy adopted by retailers
worldwide. Private label are able to attract consumers as they are providing quality
comparable to leading brand also they have positioned themselves as a premium products
and competing with manufacturer brands. Nowaday private label brands are available in
almost every product categories such as in food and grocery segement we have tasty treat,
golden harvest in big bazaar, in case of clothing segments we have Network, Netplay in
Reliance trends and Stop in shopper stop etc.

Indian retail market seems to be less developed in the context with southeast Asia as India
is having 5 % modern penetration compared to 45% in major outheast Asian market
whereas incase of the private label brand India is very successful as penetration of
private label has grew to 27% from 2012 to September 2014 [10]. Many retailers are
providing large number of offerings in their different product categories, Big bazaar, Easy
day, Pantaloons, Shoppers Stop, Spencer‟s are among them. For instance, private label
share in Spencer‟s is 60% into 650 product categories, and the private label sales is
increasing almost at the rate of 40% yearly. In Lifestyle International contribution of
private labels is approximately 25% of its sales etc. [15].

Private Labels are growing rapidly across the world and which is also reflecting in Indian
markets. The current study is done to understand the future of Private label Brand in
Indian retail industry .The emergence of organized retail in India has made private labels
familiar among Indian consumers. In Shoppers' Stop outlet a brand called `STOP' which
is Shoppers' Stop's own brand. Similar is the case Westside store from the house of Tatas
the brand named Westside. `Food Baazar' in Pantaloons' food retail outlet. Private labels
are defined as a generic products that competes with manufacturer brand on price value
proposition.Since private label products are lower priced compared to similar branded
products so they carry inferior product image and are less preferred by consumers as they
do not trust and have less confidence on using private label.

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Since store offer varieties in product with private label to the consumers it helps retailer
in winning customer loyalty and a tool to increase profitability as cosumers can buy
private label products in respective retailers store only where as other brands are easily
available in market.

In developed countries private label products were launched during economic slowdown
so that consumer can get cheap products in food categories such as bread, butter and
sugar. Initially Generics was the first type of private label products appeared in the
market which was low in price and quality.

2.2 GROWTH POTENTIAL AND PERFORMANCE OF PRIVATE

LABELS

Industry experts suggests that private label brands are expected to gain 50% retail market
share in India as compared to current market share of 5% as the retail sectors grows up
and matures.Current private label sales of Bharti retail is 15 to 20 % and the company is
planning to increase sales of private label products to 30 % in coming years.Revenue
share of private label brands in shopper stop is approximately Rs 200 crores.All the major
Indian retailers including Future Group, Reliance Group and Aditya Birla Group are
dependent on the private labels to increase customer base and generate profit by
increasing the sales of private label products.

Developed countries demonstrate that Private labels are competent enough to have strong
brand loyalty even stronger than leading brands. For instance, Aldi in Germany is the
countries top brand. In a latest study, its brand name was ranked best in terms of
consumer trust. Again, Tesco is among the leading top ten brands in the UK. Likewise,
Carrefour, French retailer is one of the top most, trusted and established brand in France.
Forty per cent of Wal-Mart sales consists of Private labels (Rs 5,16,600 crore or $126
billion), Fifty per cent for Tesco (Rs 1,47,600 or $36 billion) and are capturing bigger
portion of the organised retail sale in developed countries. In Germany, for example, the
sales of private label has grown up from 12 per cent to 34 per cent this has given retailer
more strength against brand manufactures now retailers can negotiate effectively with
manufacturers. Copy cat strategy adopted by the retailers is the strongest tool to increase
the market share as now private label is not only competing on price factor with
competitors but they are offering good quality product and hence value proposition for

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the consumers. Since organized retail in India is growing so there is a huge potential for
private label products in Indian market. Big Business groups such as TATA, Birla Group,
Reliance, ITC etc are coming with huge investment in retail sector apart from thes players
big International retail giants such as Walmart, Carrefour,Tesco are entering in Indian
retail market due enormous market potential in Indian retail they all are having private
label product in Indian market.

For Insatnce, Featers Noodles in food and beverages category which is a private label
product of Aditya Birla is having forty percent market share in its category.Kitchen
promise another private label products are leading in food & grocery product as compared
to branded products.Sales of Feaster Instant drink powder has doubled than it was
anticipated.Twenty percent of sales is achieved by 110 percent private label product in
toilet cleaner, Air Freshners and Paradise are contributing 38 percent in their categories
respectively.In personal care product category AU79 Deodrant for Males has captured 6.5
percent market share in the first three months of its lauch. 15 percent share is of Fresh-O-
dent toothbrushes in its category.Aditya Birla Group private label brands are performing
extremely well in food and non food category as compared to FMCG food category.

Aditya Birla's private label is covering seven brands across 290 products categories and
variants, Similarly Spencer's private label has double digit market share (10-20 percent)
in food category and in beverages share of private label is 8-10 percent, 10 percent share
in home care and personal care private label products.Smart choice private label brand of
spencers is the largest selling product and expected to have twenty percent market share
in its products category in coming three years.Pantaloons private label brands Tasty
Treat, Fresh n Pure, Cleanmate, Caremate, Sachn are having 15 to 40 per cent market
share in the respective product categories.It is anticipated that these private label brands
will have 25 to 30 per cent in coming years as said by company officials., KPMG,
identiied that few major food and grocery retailers are having average private label brand
market penetration from 20 to 30 percent, with a maximum penetration reaching 50 per
cent. Homecare products and processed food private labels are in high demand because
consumers are more open to brand switches in these categories, while personal care is a
facing difficult incase of private label products.

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2.3 CLASSIFICATION AND TYPES OF PRIVATE LABEL

According to [14] and [16] there are four major classifications of private label.

2.3.1. GENERIC BRANDS -Private labels first came into picture several years before in
developed countries such as Europe and US, and nowadays in Australia, as low cost and
inferior quality products. They were launched as generics, they were not having the name
of the retailer, but were having the name of the product, such as butter or milk, in simple
and white or plane background. Mostly basic food products such as sugar, paper goods
and canned goods were offered at low prices, competitive with the lesser priced product
in that category , the product range was attracting consumers who were price sensitive.
They were seen as cheaper and low quality products. Retailersdoes not give price
promotions because the product is already low priced and there is usually single product
to choose from.

2.3.2 COPYCAT-Copycat store generally contains the name of the retailers and set the
price and packaging nearly same to the products that are in competition. The retailers
target the branded products which is preferred by consumers and have huge market
therefore produce a copycat products which were similar in quality, price and packaging
with the branded products. Copycat retailers therefore encash the success of existing
branded product without incurring any additional cost in doing any research and
development of the products. Marketing costs associated with the products is also low
since it is easily recognized by the consumers, with copycat brands failure cost is
negligible as it is already done on the successful product categories.

The retailer produced a similar product and offer it at a relatively cheaper price than the
branded product such that the message presented to the consumer is that it is equally good
as branded product but available at lower price . The advantages of having copycat brands
is not only to have revenue but also creating competition amongst the available
manufacturer branded products thereby increasing the retailer‟s bargaining power with
the manufacturers, as retailer has the alternative to produce and promote its own brand in
competition with the manufacture brands.

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2.3.3. PREMIUM STORE BRAND

As retailer strategies have emerged, the approaches have developed by retailers to

incorporate premium store brands. Retailers look it as an opportunity to differentiate their
products and thereby targeting altogether a new segment of the market. The recent trend
is to create high quality products with distinct packaging, presenting as a complete new
product line by the retailer, targeting and competing with the top brands in the range.

Two types of premium brands is defined by Kumar and Steenkamp first is the premium
private label which is higher in price, exclusive and superior in quality than competing
brands; and the premium-lite store brand which are promoted as being similar or better in
quality to the competing brands, while being cheaper.

Store brands, where all private labels carry the name of the store are very successful at
driving high levels of private label penetration in supermarkets. They carry the retailer‟s
name, such as Westside, Food World, Big Bazaar, Safeway and Sainsbury Albertson‟s.
Store brands gives choice of product variety to the consumer, for the retailer private label
products are tool for increasing market share and winning customer loyalty.

2.3.4. VALUE INNOVATORS

Value innovators is the another category of private label products .The retailers producing
this category of private label product focuses on cost reduction by simplifying production
process and marketing activities on focussed product categoris so that better quality
products an be offered at reasonably low price.IKEA, the Swedish company has changed
production process of furniture products to provide consumer better price products. By
now Aldi is a most successful retailer across Europe which is having more than 200
stores.The approach of value innovators is completely differed as compared to the
approaches of generic, copycat and premium label categories. There are a various key
objectives that must be adhered to for this approach to be successful.

 Limited number of products

 Good quality products at low prices

 Low costs of production and marketing

Across the globe retailers are becoming more sophisticated and competitive; the role of
private labels roles have changed they are no longer a price warrior but are an innovative

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and value added marketing differentiator. This is revealed by the fact that the volume of
private-label brands are starting to diversify their offering beyond the anticipation and
making them to compete more effectively in existing product categories and foray into
different and innovative product categories that were usually been dominated by branded
manufacturers.Following are few reasons for the development of private label by
retailers.

 Need to create unique merchandise.

 Need to earn increased margins.
 Need to create loyal customers.
 Changing consumer habits.
 Identification of need gap.

Since needs and habits of consumer is changing rapidly there is a need to fill a gap in the
product offering which is a key reason for retailers to adopt a private label strategy. The
existing gap may be because of the non-availability of particular product / category. The
retailer may also wants to have a competitive advantage in the segment by the aim to
offer a product which is unique and can increase the customer loyalty.

Offering a product or a range within a product category, which gives the customer new
reasons to visit the store frequently i.e. every month or week, is something that every
retailer would desire. Private labels also allow the retailer to build a brand of their product
that is associated with store.

The most significant advantage that a private label gives to retailer is that of earning the
profit margin which may be higher than what is offered on other brands that he chooses in
its store. A private label basically involves the retailer in process of designing,
merchandising, sourcing and distribution. Therefore, cost is under the control of retailers
and spread across a limited range of activities. Promotions are done mainly in store and
thus, retailers cost of goods sold is much lower compared to manufacture brand.

Finally, the retailer may also vary the private label brands offering across different
geographical boundaries on the basis of the differences in consumer preferences or to
gain a competitive advantage in a new geographical region.

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 TABLE 2.1: Generations of private label brands

Generation 1st generation 2nd generation 3rd 4th

generation generation

Type of Generic Quasi-brand Own brand Extended own

brand brand,

No name, Free Own label i.e. segmented

from Brand own Brands
,Unbranded

Strategy Generic Lower price Me-too Value-added

products products

Objective Increase Increase margins Enhance Increase and

margins category retain the
margins customer base

Gives pricing Reduce Increase Enhance

choice manufacturers product category
power by puting assortment ie margins.
the entry price. customer Improve
Provide good choice. image by
value for product Develop Differentiated
(quality/price) retailers products
image among
consumers

Technology Production Technology still Amost Innovative

process made lag- ging behind similar to technology
simple and market Leaders brand Leader
basic
technology
lagging behind
market leader

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Quality/image Lower quality Medium quality Comparable Same or better
and poor but still perceived to the brand than brand
image as lower than leaders leader
compared to leading Innovative
the manufacturers‟ and different
manufacturers‟ brands. products from
brands brand leaders
Secondary brand
next to the
leading
manufacturer‟s
brand

Approximate 20 per cent or 10-20 per cent 5-10 percent Equal or

Pricing more below below below higher than
the brand known brand
leader

Consumers’ Price is the Price is still Both quality Better and

motivation to main criterion important and price, i.e. unique
buy for buying value for products
money

Supplier National, not National, partly National, International,

specialized specialising to mostly manufacturing
own label specialising mostly own
manufacturing for own brand brands
manufacturing

Private label brand consists of four generation. First and second generation PLBs are
non branded products which are termed as generic or Quasi Brand they are cheaper
products with relatively lower quality and they lack technology and are simple
products consumer buy these products due to price factor. Basic and function products
come under first and second generation PLBs .Third generation PLB is the own brand

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of retailer, These is adopted by the retailer by using copy cat strategy in which retailer
produce product which are similar to the manufacturer brands. Copy Cat products are
used to provide product variety to the consumers they are having price lower than
established brand with better quality which is value for money, hence consumers are
attracted towards these PLB products. Fourth generation PLBs are currently into
developed countries such as US and UK in this category retailers produce PLBs with
innovation and differentiation due to which brand value of PLBs increases and they
are comparable to Leading established brands in terms of Price and Quality.

2.3.5 OPERATIONAL DEFINITION OF PRIVATE LABEL BRANDS

Private label brands are big retailers manufacturing and selling goods under their
own umbrella brand to increase profitability, customer base, wider product category
at better quality and price.

2.4 PRIVATE LABEL BRANDS: INTERNATIONAL SCENARIO

Globally, market penetration of private label is highest in Europe, particularly in the

matured and developed Western Markets. According to PLMA [17], Switzerland
leads in private label brands with a share value of 45.4% in 2011. Across the globe,
Switzerland is the only country where more than half of the products sold belong to
private label brands .Whereas, the UK follows very close to Switzerland by value,
Second position is retained by Spain. The leading market in terms of private label
brands outside Western Europe is Canada, where every four dollar is currently spent
on retailers‟ own brands.

Findings of Neilson Global Survey [10], revealed that more than 27000 respondents in
53 diffeernt countries showed that concept of private label is going to stay in retail
market for a longer period. Another global online survey conducted by Nielson 2010
global online survey identified that 60% of consumers among 55 countries from
Europe, America, Asia Pacific and Africa along with countries from Saudi Arabia,
United Arab Emirates, Pakistan, Egypt and South Africa were of the belief that they
are keeping huge stock of store brands due to economic slowdown. Across the
regions, Latin America is having maximum 66% and the Africa and Pakistan regions
are trailing at 51%. The above study also revealed that the highest levels purchase
intent of private label brands during the economic slowdown was reported by

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consumers in Colombia with 80%, Spain with 79%, Portugal with 74% and Greece
with 70% respectively, reflecting realities of economic recession, sluggish export
activities and strong deficits. Whereas, the lowest drift towards private labels was
reported which came from consumers in Sweden with 70%, Thailand with 62%, Hong
Kong with 60% and Denmark with 59% consumers in these countries indicated that
they do not buy excessive store brands during the recession period.

American consumers found that store brands quality had improved approximately
44% of consumers believe that store brand products are of better quality nowadays as
offered five years before and 39% consumers will recommend to use private label
products. Global market share of private label product which is currently 20% is
anticipated to attain upto 65% , according to research done by [7]. Planet Retail
report found that, global sales of private will increase by $500 billion in next few
years with some of the biggest retail markets in the world would strike 50% private
label penetration.

According to retailers, important concern for private labels, is trust by the consumers
that retailers oofers a quality products to them. People buy products from a selected
stores, generally from whom they buy daily grocery products such as rice, cooking oil
loose biscuits, and other staples because of they have confidence of right price and
quality this is the root cause for the success of private label products. The private label
product maintains its price offerings as they tend to be 5 to 20 per cent cheaper than
leading brands in thee category. Since retailers are able to eliminate intermediaries,
they give the cost benefit to their store consumers.

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 Figure 2.1: Market Share of Private Label Brands Worldwide

Source : Global private label market: share of leading brands by selected country (Neilson 2014)

This above statistic shows the market share of private label brands in year 2013 across
various countries in the world. In the year 2013, Switzerland topped the list with a
share of about 45 percent of total retail sales of private label brands followed by UK ,
Australia, Canada, US etc

2.4.1 EUROPE- Switzerland has the highest share of private label with 45%,
followed closely by the U.K. and Spain at 41% each. Private label share in less
developed countries of eastern and central Europe varies significantly, Poland has
highest share of 24%, Whereas Ukraine has lowest share of 5%. Private labels had
become an important staple product in consumer‟s shopping bucket and perceptions
of these private label brands are overwhelmingly positive in these region. 70% of
European respondents consider store brands are a good alternative compared to
branded products whereas 69% consumers believe they offer good value for money.
Only one-third (33%) of the respondents believe that private label is not suitable for
quality concern[10].

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2.4.2 NORTH AMERICA- share of private-label is 17.5% in the U.S. followed by
18.4% in Canada, whereas the global average share of private label is 16.5%. The
social dilemma that store brands are inferior has virtually disappeared in the region, as
the majority of consumers are happy with private label products, calling them a good
alternative to established brands (75% of Americans, 73% of Canadians), a good
value product (74% of Americans, 66% of Canadians) and at par with manufacture
brands on quality parameter (67% of Americans, 61% of Canadians). From the end of
recession, share of private-label dollar share in the U.S. has increased only 1.3
percentage points between 2009 to 2013 as branded products had increased both
promotional activity and innovative marketing efforts to maintain market share and to
drive growth[10]. As explained by Todd Hale, consultant and former senior vice
president, consumer and shopper insights, Nielsen U.S. To drive the increased growth
of private-label, focus and commitment of retailer is crucial. Best retailers win the
competition by ensuring that they offer right product at right price with right margin
across the store in their given categories. At last, retailers must understand consumers
demand for both private and branded products and categories.

2.4.3 THE PACIFIC- Value share of private-label brands is 21% in Australia, with
6.6 % growth of store-brand outpacing 2.4% of total retail growth for the May 2014
year ending. In New Zealand, value share of private label is 13%[10]. Australians are
gradually more aware about prices, which is no longer a differentiator, but a consumer
expectation. Retailers have conventionally focused on 'me-too' offerings rather than
creating a differentiated products compared with established brands. Nowadays many
retailers have taken on the role of brand creator, providing assurance, qualities and
innovative and uniqueness in the products they offer. The premium level is
predominantly valuable as it allows retailers to offer products that don't exist
anywhere else. This increases the brand's differentiation of private label products and
drives store loyalty.

2.4.4 ASIA- Private label is available from last quarter century, but its growth is slow.
Singapore with 8.1% has the highest value share followed by Hong Kong having
value share of 5.1%, India is having 4.5 % private label value share ,Taiwan is having
3.1% value share and lowest value share of private label product is in China with
(1.3%), Thailand (0.8%) and Indonesia (0.6%). Nearly 60% of respondents

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in Indonesia, 58% in Philippines and 56% in Thailand believe they have a risk
spending money when they try new brands [10]. Instead, shoppers prefer to buy the
trusted brand those are advertised on TV regularly, particularly now that it is
increasingly offered at a discounted price. Asian shoppers are brand loyal, and retailer
are not investing enough in marketing programs of private label brands to persuade
shoppers to trust its quality. Many Asian retailers have almost copied and pasted the
European model without doing the groundwork realities necessary to build loyalty.
Just introducing new private-label products in the market is not going to drive
significant growth unless retailers acknowledge the fundamental issue of consumers
demand properly.

2.4.5 LATIN AMERICA-Share of private label grew gradually between 2010 and
2014, It increased in almost all of the countries measured. The highest growth
occurred in Chile and Colombia, which increased 2.9% in the last four-year time
period to value shares of 15% and 10.3% respectively. Private-label is least developed
in Argentina (8.7%), Mexico (7.6%), Brazil (5%) and Venezuela (3%). 71%
respondents of Latin America said that they would buy more store brands if huge
number variety of products were available compared to 59% respondents globally,
and 78% prefer it when a retailer's private-label offerings include lowest-priced/value
items, national brand equivalents and premium products compared to 69%
globally[10]. Diversification of product portfolio and expansion beyond the value tier
will create additional opportunities in Latin America. Private label creates price
competition and encourages manufacturer brands to innovate and maintain share.
Manufacturer brands of doubtful quality in the lower price range will have larger
impact.

2.4.6 THE MIDDLE EAST- Private label development is still in infant stage,
representing only 1% or less annual dollar sales. On the contrary, private label
represents 18% of dollar sales in South Africa. Established/Manufacturer brands are
familiar and provide a quality assurance as a result, they generate significant loyalty
by consumers. In fact, 57% of Africa/Middle East respondents say they are loyal to
branded products as compared to 50% respondents globally[10]. Inferior quality
perceptions and strong brand loyalty can create significant barriers to private label
growth. Brands will continue to dominate in Africa/Middle East for the near future,

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Private label growth is largely dependent on the spread of contemporary trade, which
has relatively low penetration across the region and is majorly available in urban areas
only. Future development will be mainly dependent on how retailers scrutinize the
performance of new launches and use that information to develop the right products at
the appropriate price.

Retailers are having advantage by producing private labels as they are not only
making the profit margins by selling private labels as compared to profit margins they
get from branded products but also these private labels help retailers to differentiate
themselves from their competitors. And in the long run, retailer can use the private
labels to attract more customers. Private labels started with retailers wanting to offer
relatively cheaper alternative mainly for two reasons. First, having a private label
means that retailers could negotiate a better margin from the manufacturer and the
second reason, when they carry private labels it created a differentiating factor. While
every shop sells Coca-Cola and Pepsi, stores having private label products meant that
they had something which other stores did not. It is also found that few retailers
inclined to create higher quality products. They no longer ask to buy them because
they are cheaper, instead they are saying today that buy them because they are the
best. By offering superior quality products, many private labels have started charging
more than established manufacturers. Nowadays, retailers have realized that by having
good quality private labels they can differentiate themselves from other stores and
could be a destination store. For example, Tesco in Europe has a range called the
Tesco Finest line. They does not contain a Tesco Value line as they are cheaper, but
they sell Finest line premium products at premium prices. For example, finest
chocolate of Tesco is sold at 50 per cent more than Cadbury‟s. Similarly, its yogurts
are sold at more than 50 per cent premium over Danone and other yogurts. Retailers
are currently doing everything it takes to create premium brands. They are doing
television advertisement, taking up brand-building exercises, and majorly they are
focusing on producing a better product than the existing manufacturer‟s brands. The
same is also likely to happen in India as Indian organized retailing is growing over a
period of time. And this growth is anticipated to occur faster as compared to other
developing countries. The major advantage for a private label brands is the
differentiation factor which a retailer can have, But in order to create this
differentiation the retailer must be successful in private label positioning against the

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manufacturer brand in such a way that a private label must be considered as
equivalent or better than the manufacturer brand. So having the benefit of such
differentiation is a long term strategy for a retailer, as producing a private label
equivalent or better than the manufacture brand is a long term strategy and involves a
huge commitment in terms of time, money and efforts from the retailer.

2.5 PRIVATE LABELS BRANDS: INDIAN SCENARIO

Retailing in India is still very primitive mostly dominated by traditional unorganized

sector. But post libralisation period has witnessed fast growth in organized segment of
retail with entering of many Indian corporates along with a large number of foreign
players. Majority of tretailers from organized retail sector has started offering Private
label brand (also called as store brand or retailer‟s brand) which is defined as a brand
name or label name attached to or used in the marketing of a product other than by the
product manufacture; usually by a retailer as an alternative to national and
international brands. In particular the private labels are retail chain‟s own brands
manufactured by themselves or third party and their prices are 20-30% lower than
leading branded products since they spend little on innovation, marketing and
distribution which is restricted to display and promotions wiyhin the store. At the
moment, private labels share in total organised retail business in per cent terms is
estimated between 5 to 12% by different agencies. Though private labels are late
entrants, they are catching up fast. In the last couple of years, private labels have seen
unprecedented growth with the entry of retailers such as Future Group, Bharti-
Walmart, Reliance, Tata Group, Spencers, Shopper's Stop and Vishal Megamart. By
doing so, retailers are shifting from a position of being exclusively a distribution
channel member to become competitors with the manufacturers. In other words, the
retailers are transforming themselves from pure customers of manufacturers brands to
become their competitors (Dhar and Hoch, 1997)[17]. Since business of private labels
is giving huge profit margins to retailers, therefore interest in these products is
growing rapidly. The margins on private label product ranges from 15 to 20 per cent
in the FMCG sector, approximately 20 per cent in electronic goods and 30 to 70 per
cent in apparels as compared to manufacturer brands. This is because there is no
intermediary costs associated retailers and pass on the benefit to the consumer. Private
labels increase the bargaining power of the retailer while negotiating with brand

26
manufacturers. In a longer run, the retailer can use the Private Labels to attract
customers to their outlet and in-turn increase store loyalty. Thus, majorty of retailers
are considering to significantly increase their private label offerings. Future Group,
Reliance, Aditya Birla Retail etc. are adopting private label strategy aggressively.
Aditya Birla Retail, which operates in both supermarket and hypermarket formats,
under is also focussing to increase sales of private label by 10-15 percent in the
coming 2-3 years. For Future Group, private brands accounts for 20-25 per cent of its
sale. Private labels would occupy approximately 50 per cent of Indian retail within the
next 10 or 15 years if the government opens up retail sector for international players.
Fashion@bigbazaar is planning to increase private label assortment from 60 to 90
percent in the following three years. According to company sources private labels
provide four key advantages first it gives the opportunities to stand out from the crow,
secondly it helps in maintaining consistency in stocks thirdly outside brands may or
may not be available in the future which may lead to potential loss of customers.
Finally it enables retailers to control margins by improving their bargaining power
facilitating movement into a planned environment. Since private labeling requires
long term planning, it enables the retailers to understand all its product variations.

2.5.1 ACCEPTANCE OF PRIVATE LABELS IN INDIA

Indian retailing has seen a lot of varaiations over the last few years. With the
increasing growth of the organised retail sector, private labels or store brands are also
gradually more accepted by the Indian organised retail market. The recession has
significantly given a push to private labels, thus positively affecting the sales private
labels amongst all major retailers like Reliance Group, Future group, Aditya Birla
Retail, Bharti Group, Hypercity, Infiniti Retail, Tata Trent, Shoppers Stop etc.,
offering merchandise mix in their private labels.

However, private label growth was observed among different categories, growth in
grocery was significantly observed in supermarkets at 15% and hypermarkets
accounting 30% of total value sales. Introduction of private labels in different
categories such as apparels, footwear, electronics toys and other appliances allowed
retailers to increase their offerings. Private label has enterd even in pharmaceutical
sector Apollo Pharmacy and Guardian Pharmacy are producing private labels in
health, beauty and personal care products.

27
The market of private label in India is currently estimated at Rs 13 billion, which
accounts for 10 to 12% of total organised retail in India. Retailers such as Pantaloon,
Trent, Shoppers Stop and Spencer‟s have increased focus on private label retailing.
Private labels constitute 90% of Trent‟s, 80% of Reliance‟s and 75% of Pantaloon‟s
overall sales. Aditya Birla Retail is planning to increase the share of private label
brands from the present 3% to 10% in the next three years.

According to industry experts, private label margins for electronics goods is up to

20% higher compared with leading brands. When it comes to clothing it is 30-50%.
Department stores are putting their products price at par with standard-priced
products of some established brands in India, while electronics and appliance
specialist retailers, as well as health and beauty specialist retailers, generally price
their products lower than the corresponding leading brands in order to generate
volume sales[18].

2.5.2 MOVING CONSUMERS TOWARD PRIVATE LABELS

It has been reported that middle and high income consumers in the developing
countries are generally the first one to introduce and accept private label as low-
income consumers are more careful in their buying behaviour and need higher levels
of confidence in the product. However the lower income consumers purchase more
private label products in both edible and non-edible categories as compared to two
other income group consumers, it is also true that brabded products still constitute the
bulk of their market baskets [19].

Consumers prefer to purchase private label products because of their low pricing and
prefer to buy such products from big chain retailers,that provides a large variety of
private label products with better quality [18]. Consumers in India prefer private
labels over mnufacturer brands due to easy availability and price benefits in that
category.

According to Report [20], food and grocery sector of retail is a key driver for Private
label that accounts for 20 to 25 percent and sometimes it reaches to 40 percent, of
vrious categories in Private Labels. Margins o private labels in staples products like
sugar, groceries can range between 15 to 25 percent.

28
2.5.3 FUTURE IMPACT OF PRIVATE LABELS

Many retailers have gained huge profits by producing private label products because
there is a scope of big profit margins to be achieved from private label products,
which are approximately having 30-40% higher margins than branded products.
Retailers are not any offering inferior quality products for a low price anymore, but
they are creating new way of product differentiation by better pricing and a good
quality product with new merchandising and promotional strategies.

One key advantage to the retailers in India, and which is working in favour of private
labels, comes from the fact that Indian consumers have less awareness of brand and
more awareness about quality and freshness. Majority of key retailers have introduced
private labels not only in food and grocery products, but also in apparels and
accessories, toys, healthcare consumer durables and home furnishings. The Future
group is planing to increase its private label portfolio by producing more than 60 new
products to its private label range.

2.6 MAJOR PLB RETAILERS IN INDIA

Indian retail industry has come up with a big range of various items of daily needs
under one umbrella. Shoppers can now purchase quality consumer goods such as
clothes, footwear, fashion accessories, watches, books, stationery items, health care
and beauty products, home appliances, home furnishings, consumer durables, food
items, beverages, jewellery and many more at the right price in a elegant ambiance.
All the retail brands do not in house every item however this industry has actually
changed the mindset and lifestyle of the consumers [21].

29
 Figure2.2: Revenue share in organised retail in FY2014

From the above figure, it can be identified that Food& grocery is having maximum
revenue share of 69% in organized retail followed by 8% revenue share in apparel
sector, 6% revenue share in both jewellery and consumer durables & IT sector and
2% Pharmacy and furniture and furnishing sector. Hence it become important to
explore PLB retailers in Food and Grocery and Clothing and apparel sector[22].

There are a various number of outlets of different famous international as well as

national retail brands. Gradually, the increasingly organized lifestyle of Indian people
is leading to the establishing up more retail outlets across the country. However,
Indian retail market still less organized so much force on selling brands is required
from retailers. With participation of some of the prominent business tycoons like
Raheja,Tata, Goenka and Piramal, several supermarkets, s office equipments stores,
stores of self-service and many such stores have been established in the country. In a
very short span of time, the Indian retail industry has witnessed the foundation of
various retail outlets. In this current competitive market, all the retail brands are trying
hard to compete with each other in terms of core competencies and branding
strategies.

30
Characterized by consistency, popularity and value addition, various retail brands
available in India aim at establishing a long-lasting relationship with customers, thus
doing individual marketing. The top retail companies in India are as follows

Table2.2: Market Share of Major Retailers in India

Indian Retail Market Reach in 2011 Market reach in

Group 2016

Pantaloon Retail 65 stores and 21 factory outlets in 35 104 stores

cities, 2 million square feet space

Shoppers Stop 51 stores in 23 cities, 3.2 million square 81 stores in 38

feet space cities

Spencers Retail 200 stores in 45 cities, 1 million square 120 stores,

feet space including 37 Hyper
stores in over 35
cities in India

Reliance Retail 708 mart and supermarkets, 20 wholesale 100 stores

stores in 15 cities, 508 fashion and
lifestyle

Bharti Retail 74 Easyday stores, plans to add 10 512 stores across

million square feet by 2017 india

Birla More 575 stores nationwide 1735 stores

natiowide

Tata Trent 59 Westside mall stores, 13 hypermarkets 86 stores

Future Group 193 stores in 3 cities, one of three largest 512 Big Bazaar
supermarkets retailer in India by sales Stores

31
2.6.1 PANTALOON RETAIL Pantaloons Fashion & Retail, is one of the leading
clothing brands in the world and is India's fastest emerging premium lifestyle
company.The company provides latest trends in clothing and fashion styles to apparel
industry with it innovative concepts, products and designs.Pantloon is currently
owned by Aditya Birla Nuvo Limited with turnover of US $4 billion and India largest
manufacturer of Linen fabric.

Pantallons offers varieties of clothing brands in all categories of men, women and
kids.The company provide complete shopping experience to their consumers with
collection of more than 200 premium brands with its store acoss 50 cities with stylish
and fashionable variety of merchandise. The clothing collection includes western
rwear and ethnic wear for men, women and kids, supplemented by complete range of
accessories.

2.6.2 K RAHEJA GROUP has introduced the organised retail concept in India with
the country‟s first large scale, multi-brand lifestyle store – Shoppers Stop.This merely
marked the birth of a giant in the magnanimous retailing arena. Expanding its retail
chains across the country, K Raheja Corp is the front runner and has set new
benchmarks staying in tune with the culture, customs, traditions, and spending power
of its customers.

Crossword and HyperCity have been burgeoning innovation and novel techniques in
retailing ever since their inception. With brands that have evolved with customer
feedback and keen observance of people‟s preferences, K Rajeha group has played
major role in the retail evolution.

K Raheja group is a mix of fashion, food, life style and entertainment destination for
their customers and has ventured successfully with orbit malls leading to major retail
development.

2.6.3 TATA GROUP- As a part of Tata group and established in year 1998, Trent
operates Westside as one of India‟s leading and fastest growing retail chains. Star
Bazaar is a chain of hyper market and a milestone in family entertainment store. A
chain of multi-brand electronics, Infiniti Retail operates stores across India and an e-
commerce website under the brand name Croma which is a wholly-owned subsidiary
of the Tata group under Tata sons.

32
2.6.4 RPG GROUP- Spencer's Retail under RPG Group is a retail chain having stores
across the country with base in Kolkata, West Bengal. Spencer's carries 'Food First'
Format which primarily provides fresh and packed food products. Various outlets in
multiple formats of food retailing, apparel, fashion, books, music, lifestyle and
electronics products are owned by RPG Group with a leading business house in India.

2.6.5 RELIANCE GROUP- Reliance has came into retail business in year 2006
since its inception it has catered needs of millions of customers, farmers and different
vendors.Relian retail is serving approximately 2.5 million consumer per week through
its loyalty programme it also has 6.75 millions of customer patronage. Its network is
expanded in entire country and serving worl class shopping experience to their
customers with recent technology and best supply chain practices.

Reliance retails are available in multiple formats across the countries. It is present in
the form of Hypermarket, Super market, Convenienec store , cash and carry stores
with products and services in all the major segment to meet the needs of Indian
consumers.

2.6.6 A V BIRLA GROUP- Aditya Birla Retail Limited (ABRL) is the retail wing of
Aditya Birla Group, with a company of $41 billion turnover. The company has
entered into food and grocery retail sectors in with the acquisition of Trinethra Super
Retail in the year 2007 and has consequently expanded its horizon across the country
under the brand „MORE‟ with two different retail formats of Supermarkets and
Hypermarkets[23].

33
2.7 PLB IN FOOD & GROCERY SEGMENT

Food is one of the largest and most preffered retail spending by the consumers across
the globe.The global food retail market worth is expected US$ 6.5 trilion and is
growing with the compound growth of approximately 5% from past few years.Driven
by increase in the population and growing food demand in retail market it is expected
to grow at 6% per annum.In Asia pacific the food & grocery sector is valued
approximately 2.2 trillion US$.With growing urbanization, nuclear families ,
increased education level and earning of consumers demand of food is growing
rapidly in the developing countries. North America is a leading food retail market
followed by Euorpe. Health and nutritional awarenesss is the major reason for the
growth of food retail market in these two countries. The demand of Food retail is also
growing in India and China which is estimated to be fastest grwong food retail
countries in Asia pacific region over the next few years.Brazil and Russia the othe
other two countries of BRIC Nations are also anticipating high growth and moving
towards leading markets of food retail.China has already left behind US market in
food retail and the market is predicting that all BRIC countries will lead food and
grocery market in coming years [24].

2.7.1 KEY FOOD RETAIL FORMATS

The food retail industry globally covers a variety of store formats to sell products to
consumers. On a broad level, food retail can be characterized into the formats as
exhibited in above table. Supermarkets and hypermarkets globally account for the
maximum distribution share with over 50% of the food being sold globally through
these formats. However, future demands the growth of smaller stores near to the
consumers and with new formats like discounters & warehouse clubs. Big global
retailers are seen moving that way. Besides these traditional channels currently online
retailers are also growing fast. Also there are mix formats emerging based on new
evolving needs of customers.

34
 Table 2.3: Global Food Retail Formats

SKUs Format Description/Value

Formats Store Size(sqft) Offered Proposition

One-stop shop, offering a wide

selection of products and
100,000 to 80,000 to services, generally located on the
Hyper Market 250,000 150,000 city periphery

Selling products in store at

WareHouse 100,000 to 5,000 to wholesale rates for their
Club 250,000 15,000 members

20,000 to In city , store selling primarily

Super Market 20,000 to 50,000 50,000 food & household products

Store Selling at 10-30% cheaper

prices with 'no frills' ambience.
1,000 to High on demand for Private
Discount Store 5,000 to 20,000 3,000 Label

Offers limited variety but high

2,000 to depth in products with focus on
Speciality Store 1,000 to 10,000 4,000 quality

A Neighbourhood store which

Convenience 2,000 to stocks less quantities for daily
Store 1,000 to 10,000 5,000 use items

Source: Wazir Analysis

Above table show the global retail format in which hypermarket cover maximum area
from 100,000 to 250,000 sq ft, followed by warehouse club covering 100,000 to
250,000 sq ft, supermarket covers 20,000 to 50,000 sq ft, discount store covers 5,000
to 20,000 sq ft , speciality store and convenience store cover 1,000 to 10,000 sq ft.

35
 Figure2.3: Share of Global Retail Formats

Source: Eurometer International

Above fig shows the share of global retail market, Super market has maximum share
of 32%, followed by hypermarket having 19% retail format share, speciality store is
having 17% retail format share, convenience store is having 9% retail format share,
discount store is having 8% retail format share and other categories are having 15%
share of retail format[24].

2.7.2 SNAPSHOT OF THE INDIAN FOOD & GROCERY RETAIL MARKET

Food & grocery is having maximum market share of retail industry with 57% of the
total retail market and therefore is a backbone of retail sector in India. It is estimating
a market size of 320US$ billion (Rs 20,000 Billion). The retail industry is expecting
8-9 million food and grocery stores including local kirana shops and hawkers.Food
reatil sector also support millions of small and medium enterprises which is catering
the market demands.

As new categories is emerging and consumers are spending on aspirational needs food
& grocery‟s share of the consumer wallet is going down in percentage terms, though
actual spend continues to increase. The food & grocery category will continue to grow
at about 13-14% per annum over the next decade, though the decadal drop in terms of
the share of consumer wallet and hence the retail market share would be about 2-
2.5%. Thus, for foreseeable future, food & grocery retail is expected to dominate the

36
market with more than 50% share of the overall retail market. By 2025, the food &
grocery retail market is expected to grow over 3.5 folds and be worth US$ 1,150 Bn.
(Rs. 71,000 Bn.) A large part of this growth will be driven by inflationary price
increase, and the balance by demand growth led by increasing population, increasing
incomes and thereby higher spend on foods and lastly urbanization, which is changing
food habits. Concurrently, factors like increasing awareness and health consciousness,
changing lifestyles and time poverty, increasing drift towards convenience and
improving availability of convenience foods are increasing the share of processed and
packaged foods (including ready to eat / ready to cook traditional and westerns food
options, snacking etc.) in the consumer‟s food basket.The current market penetration
is only 2-3 % which is lowest and expected to change dramatically with the deeper
penetration of the organized retail.By 2025, Food sector of organized retail is
anticipated to grow at rate of 8 to 9% with market worth of 90-100 US$ billion
growing at compound rate of 25 to 30% annually. With the emergence of online
grocery stores ther is a big scope of e-tailing as aaproximately sixty grocer stores are
coming up in a week.Thus with the rapid growth of both online and offline grocery
stores the signifiacnt growth is expected in food and grocery retailing. However
traditional retail hawkers such as local kiranas and street market will still dominate
food & grocery market with more than 90% of the market share even in year 2025
[24].

37
 Table 2.4: Private Labels in Food/Grocery

Examples of Private Labels in Food/Grocery

Retailers Private Products

Brands

Big Tasty Treat Noodles, Kitchen King Spice, CornFlakes, Jam,

Bazaar(Food Tomato Ketchup, Channa Masala
Bazaar)
Fresh & Pure Ghee, Tea & Honey

Ekta Basmati Rice

Premium Sooji
Harvest

Tastymate Dairy Product Beverages

Sach Toothpaste

Easy Day Great Value flour, staples, cereals, spices, tea, cold beverages,
sodas, jams, ketchups, dry fruits, corn flakes,
Indian snacks, dish-wash bars, detergents, toilet
cleaners, and floor & glass cleaners

Easy Choice catering to kitchen & bathroom accessories, bed

linen, cushion covers, towels, plastics, lighting
solutions, and stationary

Mainstays cosmetics, deodorants, bar & liquid soaps, oral &

dental care range, nail-cutters, and baby care
products

Home Trends home furnishings & decor,kitchen tools, crockery,

cookware, table ware and glassware

38
MORE Feasters,Kitch Food products: ketchups, jams, honey, carbonated
en drinks, chips, cookies
Promise,Best
of India

Enriche Home & Personal care

Detergents/Dishwasher.Shampoos/ soaps

Maha Saver, Groceries

Freya

Spencers Smart Choice Foods, Beverages, Home & Multipurpose Needs

Maroon Non Stick Cookware

College Stationary
Studio

Great Electronic & Electrical

360 degree Luggage

Vishal Mega V-Fresh Atta

Marts
V-Needs‟ Noodles

2.7.3 BIG BAZAAR PLBs : Big Bazaar offers private label brands named Tasty
Treat in food categories such as Noodles, Kitchen King Spice, Corn Flakes, Jam,
Tomato Ketchup, Channa Masala, another private label named Fresh & Pure in
category of Ghee, Tea & Honey, Ekta is private label for Basmati Rice, Premium
Harvest is Private label for Sooji product, private label Tasty mate is for dairy
products and Sach is for toothpaste.

2.7.4 EASY DAY PLBs: Easy day has come up with the Great Value products in
food categories such as rice, pulses,flour,spices ,dry fruits,tea and cereal etc. Easy
Choice is another private label product offered by easy day which caters to kitchen &

39
bathroom accessories, bed linen, towels, plastics, cushion covers, lighting solutions,
and stationary, Mainstays private label brand is in category of plastic containers,
kitchen accessories and Home Trends private label brand for home furnishing .

2.7.5 ADITHYA BIRLA GROUP (MORE) PLBs: MORE retail store outlets from
Adithya Birla Group provides variety of private label products such as Feasters,
Kitchen Promise, Best of India in food categories such as Noodles, Biscuit, Squash,
syrup, Friut Mix powder etc. Enriche is another private label brand for Home &
Personal care Detergents/Dishwasher, Shampoos/ soaps Maha Saver, Freya brands in
groceries.

2.7.6 SPENCERS PLBs- spencers offer private label brand named Smart Choice in
category of Foods, Beverages, Home & Multipurpose Needs, Maroon brand for Non
Stick Cookware, College Studio brand for stationary, Great brand for Electronic &
Electrical and 360 degree brand for luggage

2.7.7 VISHAL MEGAMART PLBs : Vishal Megamart's provides different varitiey

of product categories under brand V needs and Vfresh such as Atta, salt and
toothbrush . Atta under brand named Vfresh.

2.8 PLB IN CLOTHING AND APPAREL RETAIL SEGMENT

2.8.1 GLOBAL APPAREL MARKET

The modern global apparel market consumption is projected US$ 1.7 trillion which
forms around 2% of the world GDP of US$ 73.5 trillion. Consumption of apparels in
top 8 economies (considering EU-28 as one entity) constitutes approximately 70% of
the global consumption [25].

40
 Table 2.5: Global Apparel Market Size

Global Apparel Market Size 2015 (in US$ bn.)

Region Apparel Market Size

Europe 350

USA 315

China 237

Japan 93

India 59

Brazil 56

Russia 40

Canada 25

Rest of World 510

TOTAL 1,685

All four BRIC nations are appearing among the top markets having a cumulative
share of approximately 23%, with China leading the group. Rest all bigger markets
are developed countries.

The apparel industry is ancipated to growt at the compound rate of 10 percent

annually with current estimation of US $122 billion in year 2025 currently the apparel
market is of worth US $45 billion in India[ 25].

41
India has the history of craftmenship in textile and apparel sector as the demand of
cotton, silk and denim is from around the world and are very popular in taetile and
apparel industry. Indian Apparels has also becomes successful around the globe with
their fashionable and trendy products.

India is the second-largest producer of textiles and apparels in the world,It contributes
4 percent to the GDP of the country and 15 percent of the total export earnings from
the counry also it contributes 14 percent to industrial production.This sector employs
51 million people directly and 68 million indirectly in year 2015-16, and thus is a
second largest employment provider in the country.

The anticipated growth of fashion retail in India it is a great opportunity with some
challenges and issues. The biggest challenge in the retail industry is rapidly changing
demands of the consumers, infrastructure limitation, a typical tax policy, market
heterogeneity and limitation of suplly side and skilled manpower.

Figure 2.4: Market Size of Indian Apparel

Source-IBEF,2017

The classification of textile and apparel industry can be primarily divided into two
segments, First, is yarn and fibre segement and second is fabrics and apparel segment.

India contributes 14 percent to production of textile and yarns across the world where
jute is the largest producer, followed by silk and cotton and third largest is cellulosic

42
fibre. India is having biggest loom capacity which includes handlooms and shares 63
percent of global market.

The Indian textile and apparel industry is anticipated to grow and reah to US$ 141
billion by the end of year 2021 as compared to US$ 67 billion in 2014.Favouable
demographic factors and increasing income level with the increased penetration of
organised retail the demand of textile will increase further in India .Currently India is
the second largest exporter of clothing and textile across the world.

The export of textile and apparel in India is anticipated to grow upto US$ 82 billion
by year 2021. Ready made garment will remain the eading contributor in export of
textile and apparel segment, it is contributing 40 percent to total export of this
segment. Cotton and man made textile is having export share of 31 percent and 16
percent respectively [26].

Favourable governement policies and major govermnet initatives are leading to

increase growth of textile sector. The Ministry of textile is focussing to upgrade
technology under the sheme Up-gradation Fund Scheme (TUFS) for the promotion of
apparel export. Apparel parks are developed by the government and it is providing a
financial support of US$ 4.25 billion to textiles.Free trade between Asian countries
and future export agreement with European country will boost the Indian export of
textiles and apparel sector. The government has changed duty drawback facilities and
are coming with promotional plans to carryout road shows to promote Indian textile in
countries such as America, Russia and West Asia with the usage of formal dress code
after the second war has redefine the clothing industry across the world.A dress code
is a rule having certain clothing combinations.Hence needs of cotton and silk
increased worldwide and India has a better scope to produce and export textile
products with advent of organised clothing retail industry in all developed and
developing countries.

43
 Table 2.6: Private Labels in Clothing & Apparels

Examples of Private Labels in Clothing &Apparels

Retailers Private Brands Products

Westside Nuon Mens Wear (T-shirts & Jeans) &

Women‟s Wear (T-shirt, Jeans &Tunic)
- Targeted to Collegians

Ascot Mens Wear (Shirts & Trousers) –Premium

branded formals

Richmond Mens Wear (Shirts & Trousers) -Office

Wear & Party Wear Formals

Westside Mens Wear (Kurtas), Womens

Wear,(Kurtas, Dress, Leggings), Kidswear

Westsport Mens Wear & Womens Wear (T-shirt–

Ethnic Wear & Formal Wear

Pantaloons Bare Denim, UMM Mens Wear (Jeans) – Casual Wear

Lombard, Bare Mens Wear (Trouser) – Formal Wear

Leisure,Urbana

Turtle,John Mens Wear (Shirts) – Formal Wear

Annabelle Womens Wear (Shirts & Tunics) –

Premium branded formals

Chalk, Bare 7214, Kids Wear

Akkriti,Kids, Kids
Studio

Shopper Stop Kashish, Stop, Life, Mens‟s Ethnic Wear, WesternWear Men
Mario Zegnoti & Women, Mens

Acropolis, Push and Men‟s Formal Wear, Men‟s,Formal Wear,

Shove, Vettorio Eye Wear,Premium Men‟s Wear
Fratini

Globus Globus Mens & Womens Wear – Casual Wear

Fashion 21 Mens & Womens Wear – Casual Wear

44
2.8.2 WEST SIDE PLBs-Westside has private label brand in the categories of Mens
Wear (T-shirts & Jeans) & Women‟s Wear (T-shirt, Jeans &Tunic) named Nuon
targeting College students. Another premium branded formals PLB in Mens Wear
(Shirts & Trousers) is Ascot. For party wear Richmond, in ethnics Westside and
Westsport in tshirts and sports wear for men and women.

2.8.3 PANTALOONS PLBs- Pantaloons offers Bare Denim ,UMM brands and under
category Mens Wear (Jeans) – Casual Wear. Private label Brand named Lombard,
Bare Urbana ,Leisure under category of Mens Wear (Trouser) – Formal Wear, Private
label brand Turtle,John under the category Mens Wear (Shirts) – Formal Wear,.
Private label brand name Chalk, Bare 7214, Akkriti,Kids, Kids Studio under kids
section

2.8.4SHOPPERS STOP PLBs- Shoppers stop offer private label brand named
Kashish, Stop, Life, Mario Zegnoti under category Mens‟s Ethnic Wear,
WesternWear Men & Women, Mens. Another private label brands of shopper stop are
Acropolis, Push and Shove ,Vettorio Fratini under cateogy Men‟s Formal Wear,
Men‟s,Formal Wear, Eye Wear,Premium Men‟s Wear

2.8.5 GLOBUS PLBs- Globus store offers private label brand under the name of
Globus and Fashion 21 Mens for product category of Womens casual wear.

2.9 COMPARATIVE OVERVIEW OF PLBs IN INDIAN AND

INTERNATIONAL CONTEXT

Unlike in European and US countries where the market shares of PLB is 45% and
18%, India has only 7% private label brand penetration in organized retail [10]. Being
a developing economy and with the emergence of favourable FDI policy in India
global players find a huge market potential in India. Organized retail is anticipated to
grow at faster rate hence the significance of PLBs become increasingly important. In
the U.S. and Europe, private-label products are galore and thereby consumers in a
developed market are quite used to PLBs in a competitive market. In developing
markets, where the number of private-label brands is significantly less, the retailers
can get into a market which is demanding and less mature. Thus the scope of PLBs in
developing market is immense. Besides in developed countries private label brands

45
are into fourth generation in which innovative and differented PLB products are
launched by the retailers in U.S., Europe and Australia, which includes products such
as milk, bread and eggs. In India it is third generation where retailers use copycat
strategy ie they launch products similar to leading brands in consumable products that
are distinctly local, such as ghee, rice, and atta flour etc. to attract price sensitive
consumers.

2.10 CONCLUSION

This chapter summarizes the evolution of PLBs with specific focus to Indian
organized retail. It also discussed the emergence of PLB in organized retail along with
classification and types of PLBs. Besides it provide operation definition of PLBs and
highlights scenario of PLBs in International and Indian context followed by the major
Indian PLB retailers in food and grocery as well as clothing and apparel segment.
Finally it discusses the basis of choosing these two sectors for studying the consumer
perspective of the retailers in Indian context. The final section of the chapter
highlights the comparative overview of the Indian and the international perspective.
The context of the PLB retailers as well as the consumers is explained in both the
context which provides an interesting insight for the expansion of PLBs in Indian
market.

46