Indian Private Labels: Modifying Retailing Perspective

Retail is the largest private industry in the world which accounts for 8 % GDP. In countries like US, UK, Germany, France major market share is in larger formats of business in terms of retail activities, categories, range, brands, and volumes etc. Indian retail industry is slowly inching its way towards becoming the next boom industry, as retail sector has been getting major attention from the government, promoters and the large retail chains. Major Indian retail chains beginning to establish themselves by reaching critical masses, the next step of the retail story begins with the introduction of private labels in full swing. As on one side, store labels give the retailer higher margins on a portion of the inventory and maintain sustainability private labels carry a margin of 25-30% as compared to the national brands which offer only 12-17%. Private labels were earlier considered as “cheap”, “no-name substitutes” for the real thing – cheap in both quality and in price. Retailers are therefore curious and in fix which strategy will be implemented in Indian retail. This empirical paper is a modest attempt to study the retail potential of private brands in Indian context. It will lead to implications for big retailers as well as provides a direction for further research in the similar area.