Retail biggies bet on high-end in-store labels

KOLKATA: Call it the second act of the Indian retailer���s private label story. After consolidating their presence with private labels which were competing with mainline brands on value and cost parameters, some leading chains are now planning to create a second line of premium private labels.

RPG Retail, Future Group, Shopper���s Stop and ITC���s Wills Lifestyle, among others, have or intend to create a high-end line of in-store brands which, in turn, will enhance their store image as well. Yet others like Reliance Retail and the Aditya Birla Group too, want to enter the game at a later stage, claim industry sources.

All this comes at a time when retailers��� private labels in categories like apparel, accessories, personal care, FMCG and food products have found steady acceptance from India consumers. Private labels account for around 15-20% of the topline for some big Indian retailers, nearly half that of their global counterparts such as Wal-Mart and Tesco.

���There has been a significant amount of lifestyle changes, coupled with an evolving in people���s tastes and preferences. The market is moving from price-linked to value-linked, where customers are placing more value on design, creativity and differentiation. Retailers now see a lot of opportunity in the upscale market, more so as the customer has a higher purchasing power,��� ITC���s lifestyle retail business division VP (sales and marketing) Atul Chand said.

Wills Lifestyle forayed last year into the ���special occasionwear��� segment, featuring topline Indian designers. ���That already contributes 15-20% towards our revenues,��� said Mr Chand. Future Group too has recently rolled out a portfolio of premium in-store brands such as Lombard and Urbana.

RPG Retail is contemplating a premium positioning for an assortment of products such as ready-to-eat Indian and international items. ���Indian consumers are looking at products which they can indulge in. Such premium labels may not necessarily have a premium pricing but can feature product innovations,��� said RPG Retail CEO Sumantra Banerjee.

Future Group CEO Kishore Biyani believes a premium private label needs to have a superior product quality to gain the attention of the Indian consumer. ���The store also needs to play up the brand with in-store promotions so that it can compete with other mainstream brands in that category,��� Mr Biyani adds.

However, a section of the industry believes it is too early to launch top-end private labels. ���It will take at least another five years for the market to mature enough to accept retailers��� in-store premium brands. Reliance Retail too has plans but only after we have a strong national presence to provide the necessary scale,��� Reliance Retail president & chief executive (lifestyle) Bijou Kurien said.

Westside claims that it is not keen to create higher price points just to improve its imagery. Neeti Chopra, head, marketing adds that they are offering more value-added products at the top end under existing labels. ���We have launched a premium menswear line called Ascot, as a shop-in-shop concept, keeping in mind that men are more brand conscious. But this was done to create a differentiation from the existing offerings.���