Private labels the new success mantra for apparel retailers

With consumers still conscious about spending, almost all leading apparel retailers have turned to launching their own private labels that are more affordable and give value for money. From Reliance Trends, to Shoppers Stop, Future Group, Tata’s Croma to

Aditya Birla Retail’s More, all are following the route to attract consumers by offering them almost 25 to 30 percent lower priced private labels.

Private labels woo buyers

With private labels, retailers can offer low priced products compared to their branded counterparts. With consumers seeking affordable, yet quality products, retailers find this route easy to keep their business running. Retailers are putting in efforts to provide new private brands across various price points to woo buyers. They have not only created new labels but have customised and localised the products to suit Indian tastes according to the geographies.

For example, More megastore has launched nine in-house apparel and footwear brands announcing its entry into the apparel and footwear segment. More will now cater to the fashion needs of men, women and kids. Even Future Retail’s supermarket chain Big Bazaar has several private labels in apparels.

Spreading the ambit

A recent study by Rabobank reveals, the market share of private label products in India will more than double in the next few years, driven primarily by the food category. Currently, it is at 4.5 percent. By 2020, the share will increase to over 10 percent.

What works for these private labels is, the low costs involved in manufacturing. The supply of private labels, help retailers in earning higher profits. A rise in brand awareness in metros as well as smaller towns, growing nuclear families, working women and exposure to social media are some of the factors helping the growth of private labels in India.

Looking at the response to their private labels, many retailers are now planning to launch them as solo brands by opening exclusive stores. For instance, Indus League Clothing is planning to unveil stores for its in-house brands Bare and Rig. Lifestyle too has launched exclusive outlets of its in-house ethnic wear brand Melange, after clocking in Rs 100 crores revenues in 2011. Even kids’ wear brand Gini & Jony has expressed its desire to unveil standalone stores for two brands – Palm Tree and GJ Jeans by December this year.