25 Sep 2019
Posted in Consumer
Change in consumer perception and product innovation fueling growth in private label space in APAC, says GlobalData
The consumer attitudes towards store brands have evolved radically to a point where they no longer suffer the stigma of perceived inferior quality products. The change in consumer mindset in Asia-Pacific (APAC) has been caused by the improvement of quality across private label offerings, says GlobalData, a leading data and analytics company.
To win over today’s savvy shoppers, private label manufacturers are making efforts to expand their product categories by offering exclusive ranges, aligning with consumers’ health, transparency, and sustainability values. They are becoming, in the process, more trusted as high-quality options and mainstays on consumers’ shopping lists, on an equal footing to branded alternatives.
For instance, Guangzhou Watson’s Personal Care Stores Co. Ltd. offers mineral water hydrating cleansing foam that claims to contain Canadian sea mud water, French hot spring water, and glacial water from the Alps, to ’beautify and hydrate’ skin.
According to GlobalData’s report, ‘TrendSights Analysis 2019: Private Label Evolution – Innovating private labels from ’me-too’ to go-to brands’, private label products in the food and non-alcoholic category are in the growth stage with retail-owned brands responding well to consumers’ needs and demands.
Alcoholic private label offerings are in the emerging stages driven by the demand for more inexpensive offerings in this category.
The household care and personal care sector is in the growth stage, with private label brands focusing on value-led, multipurpose products with ethical and sustainability credentials.
Shagun Sachdeva, Consumer Insights Analyst at GlobalData, says: “Consumer approval of private labels is high among shoppers across both developed and emerging markets. In Asia-Pacific, shoppers’ confidence in private label products appears to be growing, with consumers seeing private labels as good alternatives to famous name brands.
“With experience-driven shoppers and health-conscious consumers being open to trying out new products, retailers are adopting increasingly refined approaches to their own-brand offerings through proactive trend tracking and product innovation to create new product categories.”
The proliferation of brand-agnostic consumers shows that today’s consumers are less brand-conscious and equally seek quality and value. This leads to blurring of the lines between national and private label brands and has created opportunities for companies in private label space to implement co-innovation practices between a retailer and suppliers to create premium-quality and lower-priced offerings.
Sachdeva concludes: “Firms looking to enter the private label space need to understand how to remain relevant to consumers by using insightful innovation, capitalizing on current trends.
“Firms could try to lure consumers with high-quality ingredients and customization of products. Furthermore, they should innovate wisely to avoid over-expansion, be open to diverse channel reach and drive brand status by using unique marketing strategies.”