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How Walmart India is banking on private labels? , Oct 10, 2018

The India story of modern retail market may be little behind as compared to mature markets. But, the growth story of private label holds much significance and is on blooming path. Contrary to old school though that private label share should not contribute more than 10% of product portfolio, retailers these days are constantly innovating, reinventing this category with bigger share. For example, Walmart India is all set to leverage from this segment.

Walmart which primarily operates as wholesaler in India has two private labels in its portfolio including Right Buy, Member's Mark sees humongous opportunity under lying in this segment. Speaking on private label strategy, Krish Iyer, Chief Executive, Walmart India said,” Private brands have an important role to play in certain niches where gaps exist. Moreover, when it comes to regional, where opportunity exist to meet the requirements of some consumers at regional level, that’s where we see our opportunity to introduce regional brands whether its food or non food category.”

Iyer was speaking at the sidelines of FICCI Massmerize 2018.

Speaking further on private label growth Iyer said, “In mature markets private labels has a bigger role to play as market saturation starts to take place then to improve the profitability there is a need or compulsion to introduce more private brands.”

Iyer also stressed that counties like India which FMCG runway is much longer it is important to keep in mind that the role of private label and role of national brands as well as regional brand, and each of them should play a distinct role in retailers’ portfolio. There is a room to grow all of them significantly.

“Even today the share of private label in entire portfolio of retailer is not that high but the growth rate is high for sure,” informed Iyer.

As per leading media report, Walmart India earns 6-7% revenues from its two private labels that have been introduced in Indian market. Internationally, its private labels are a USD 60 billion business for them under the name of Sams Club, while its total volume is over USD 500 billion. Walmart India also plans to retail its private label portfolio on leading market places in India.

Speaking at Massmerize event Iyer also informed that India is many ways still an emerging economy when it comes to consumption. Looking at the rural market , semi urban market and some of the consumers in urban market, brand loyalty still matters. Aspirations are there as far as brand is concerned.



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