Private labels taking off with Chinese retailers: report

Chinese retailers are increasingly developing private — or home-brand — labels and should draw up clear strategies to increase the market share of what is a relatively new concept in the country, according to a study released on Tuesday.

Domestic retailers are rapidly catching on to the global trend of private labels, especially for food, the Private Label Special Committee of the Shanghai Licensing Association said in a report co-authored with Netherlands-based retailing consultancy Caracter Company.

Companies have developed a strong emphasis on differentiation and variation based on consumer trends and lifted awareness of private labels — labels which carry the name of the retailer themselves — through developing sustainable products, the report said.

Caracter chief executive officer Suzzette Moerman said retailers need to develop a clear strategy for design, packaging, and pricing for private label products.

Retailers should ensure uniformity of name and design for private labels across various product categories, she said.

The report was released as winners of the first China Private Brand Challenge Awards were announced at the opening of the 2017 Shanghai Private Label Fair on Tuesday.

Fourteen Chinese and multinational retailers, including Walmart and Aeon, won awards.

Carin van Leeuwen, unit manager at Jumbo Supermarkets and a member of the judging panel, said local retailers can catch up with the global development of private labels if retailers follow a clear strategy based on their company's mission statement.

The committee's data shows private labels have nearly 5 percent of the market in China, compared with almost 30 percent globally.