Four small retailers yesterday joined forces to improve their bargaining power when buying private-label products.
QKL, Meet All, San Jiang and Huiyou Mart announced the creation of their consortium at the ongoing 2015 Shanghai Private Label Fair.
Private-label goods are items made by a manufacturer for sale under another brand. They can be a lucrative addition to a retailer's offering.
While such goods are ubiquitous overseas — in Europe they account for about 35 percent of all goods sold — they are far less common in China, where even among sector leaders like Lianhua they represent less than 5 percent of sales.
"One of the biggest challenges to the growth of private-label goods in China is that many retailers don't have the scale to bargain with manufacturers," said Yao Zheng, from the Shanghai Licensing Association.
"By forming partnerships they can grow the sector much faster," he said.