Online grocer BigBasket plans to expand its private label offerings to non-food categories and offer more items under its existing private brands over the next three months, a move that is likely to help the company widen its lead over rivals.

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Online Grocery Players Want
More of Private Label Push
Online grocer BigBasket plans to expand its private label offerings to
non-food categories and offer more items under its existing private
brands over the next three months, a move that is likely to help the
company widen its lead over rivals.
Private labels are brands owned by retailers. They are typically more
profitable than dealing in other brands. In the case of groceries, the
margins could go as high as 30-40%, at least double those on other
brands.
#DigitalErra Thought Corner

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While India‘s retail industry continues to scale new heights each year,
the private-label area in the Fashion and FMCG arena has shown
incredible consistency and potential. With a projection like that, India‘s
private-label sector is better poised than its counterparts in other
emerging economies. It also highlights shifting attitudes and perceptions
with respect to brand loyalty.
Online Grocery Players Having Private Labels
The food etailers are taking their own brands to hotels, hospitals,
restaurants, and catering services to expand its reach. Grofers sells fruit,
vegetables and staples under its private label — Freshbury. BigBasket
owns Fresho (fruits, vegetables, idli/dosa batter, meat), BB Popular &
BB Royal (grocery staples) and Tasties (coffee, snacks).
These major food and grocery players are embarking upon backward
integration and are creating a range of private label food offerings in
dairy, organic fruits and vegetables, etc. They are working with farmers
to help them improve quality, transportation practices, hygiene, etc. The
margins of private label products are typically double that of nationally
branded products.
Opportunities Overseas
Most private labels in India are positioned on the basis of cost and most
of the packaging is on the basis of a “no frills” approach. In contrast,
private labels are more mature in developed markets and several large

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food and grocery players maintain several categories of private labels,
both mass and premium products. Overseas, some retailers who operate
in fashion and accessories, home goods, food and grocery, etc have
created private label-only formats which are successful, desirable and
are pursued by consumers.
Factors to be considered while Going for Private Labels
Based on a research report, Private labels won’t work by just keeping the
products cheap. Retailers must look at developing good quality and
value-added products. Also, they must make sure that they don’t over
exercise the private label option. If they fall into the trap of using too
many private labels, they will end up losing customers. It has been seen
that when retail chains rely heavily on private labels, customers feel they
lack choices. Many retailers have suffered due to this; Sainsbury is a
classic example. The UK-based retail chain was a mainline traditional
retail chain, but when it used too many private labels, customers did not
find regular brands at its stores, and as a result, sales dropped. By this it
can be understood that a retailer need to be careful.
Points to Note for Retailers To Succeed With Private Labeling:
 Build strategic collaborative marketing partnerships.
 Conduct in depth analyses of consumer purchase attitudes and
behaviours.
 Collaborate to optimise in-store inventory management programs
at the store level based on unique needs and wants of key target
consumer segments.

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What’s The Future Scene?
Private labels or store brands are on escalating journey for growth in last
few years in Indian market. The growth of private labels is quite
impressive in food and grocery segment, in spite of presence of leading
national manufacturers brands in most of the categories.
Today, private labels are a part of well defined retail mix strategy,
therefore developed in value innovators and premium categories
by most retailers for profit maximisation and customer loyalty.