Customer Perception of Private Labels Brands vs National Brands in Indian Retail Industry

Topics: Retailing, Private label, Shopping mall Pages: 10 (3267 words) Published: March 13, 2012



The Indian retail industry is the fifth largest in the world. Comprising of organized and unorganized sectors, India retail industry is one of the fastest growing industries in India, especially over the last few years. Though initially, the retail industry in India was mostly unorganized, however with the change of tastes and preferences of the consumers, the industry is getting more popular these days and getting organized as well. With growing market demand, the industry is expected to grow at a pace of 25-30% annually. The India retail industry is expected to grow from Rs. 35,000 crore in 2004-05 to Rs. 109,000 crore by the year 2010. According to the 8th Annual Global Retail Development Index (GRDI) of AT Kearney, Indian retail industry is the most promising emerging market for investment. In 2007, the retail trade in India had a share of 8-10% in the GDP (Gross Domestic Product) of the country. In 2009, it rose to 12%. It is also expected to reach 22% by 2010.According to a report by Northbride Capita; the India retail industry is expected to grow to US$ 700 billion by 2010. By the same time, the organized sector will be 20% of the total market share. A McKinsey report 'The rise of Indian Consumer Market', estimates that the Indian consumer market is likely to grow four times by 2025. Commercial real estate services company, CB Richard Ellis' findings state that India's retail market is currently valued at US$ 511 billion (Bang, 2009).According to the Investment commission of India, India is expected to be among the top 5 retail markets in the world in 10 years. India's overall retail sector is expected to rise to US$ 833 billion by 2013 and to US$ 1.3 trillion by 2018, at a compound annual growth rate (CAGR) of 10 per cent. As an emerging market with high growth rates, consumer spending has risen sharply as the youth population (more than 33 percent of the country is below the age of 15) has seen a significant increase in its disposable income. Consumer spending rose an impressive 75 per cent in the past four years alone. Also, organised retail, which accounts for almost 5 per cent of the market, is expected to grow at a CAGR of 40 per cent from US$ 20 billion in 2007 to US$ 107 billion by 2013. According to a new study by global management consulting firm AT Kearney says that in India, apparel, along with food and grocery, will lead organised retailing in India. India has one of the largest numbers of retail outlets in the world. A report by Images Retail estimates the number of operational malls to grow more than twofold, to cross 412, with 205 million square feet by 2010, and a further 715 malls to be added by 2015, with major retail developments even in tier-II and tier-III cities in India. Also, according to new market research report by RNCOS titled, "Booming Retail Sector in India", specifies that the number of shopping malls is expected to increase at a CAGR of more than 18.9 per cent from 2007 to 2015. It further specifies that rural market is projected to dominate the retail industry landscape in India by 2012 with total market share of above 50 per cent. Thus, according to industry experts, the next phase of growth is expected to come from rural markets, with rural India accounting for almost half of the domestic retail market, valued over US$ 300 billion. In order to be truly successful, retailers must advance from the generic or store brand mindset of the past to a new private label paradigm. Many retailers have begun to describe their private label brands as “own” brands because there is recognition that these proprietary, exclusive offerings are tools that represent momentous power and potential for the retail store. 1.2 THEORETICAL FRAMEWORK

Private brands are products developed by a...

References: 1. A C Nielson (2005) “ The Power of Private Labels in Europe” An Insight in to Consumer Attitude(accused on September 1,2009) A C Nielson 2003, 2006, 2008
3. Cunningham, I., Hardy, A., & Imperia, G. (1982), Generic brands versus national brands and store brands. Journal of Advertisin g Research, 22(5), 25-32
5. L. Berry (2000). Cultivating service brand equity. J. Acad. Mark. Sci. 28(1): 128--137.
6. Sanjay K. Dhar J.Hoch, Why Store Brand Penetration Varies by Retailer, journal Marketing Science, Volume (Year): 16 (1997)Issue (Month): 3 ()Pages: 208-227
12. Krist of De Wulf, Gaby Odekerken-Schroder, Frank Goedertier, Gino Van Ossel, (2005) "Consumer perceptions of store brands versus national brands", Journal of Consumer Marketing, Vol. 22 Iss: 4, pp.223 -232
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