Categorized | Europe

Private Labels in China, a new update

Posted on 10 January 2013


Right / RT-Mart, the leading hypermarket operating company in China, has spread its private labels in many categories and still expanding.


Private labels’ current state comes from Chinese consumers’ acceptance and retailers’ relentless efforts. In the past years, retailers in China have been promoting private labels on their great value while adding new products and improving quality. A great number of Chinese consumers have become loyal to private labels after trial and repeated purchases. Another important reason for private labels’ fast growth lies in retailers’ seek for new profit source amid the general slowdown of the Chinese economy and intensifying competition in the retail market.

However, the future is no plain sailing for private labels in China. Compared with mature markets in Europe and North America, PLs still has a long way to go with many challenges and difficulties. Although many have accepted PLs, to most Chinese consumers, private labels are still new or with concerns. Retailers still need to promote PLs continuously. At present and in the foreseeable future, low price is the only advantage private labels have against competitions from brands and small suppliers. But quality can not be guaranteed at low prices.

In addition, international retailers are still studying local shoppers’ habits while domestic retailers and suppliers are learning how to efficiently operate private labels. As a result, there will be problems exposed every now and then. Last but not least, shortage of talents will fundamentally limit the growth of private labels in China.

Looking into the future, private labels will see an accelerated growth, thanks to retailers’ relentless promotion, enlarged categories and improved quality. International retailers will continue to lead while leading domestic retailers will see a boost. But there will be barely any improvements from small retailers. As for regional developments, private labels will be more popular in big cities while consumers still prefer brands in small cities.

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