Retailers use private label to set apart

Rretailers are increasingly using private label products in higher-end categories to differentiate from each other and compete with rising online shopping, industry experts said yesterday at a fair.

"Private label is no longer only for better price, but for better quality as well," said Chavy Dumpe, manager of sales and marketing at the Private Label Manufacturing Association.

"Premium stores are increasingly resorting to a private label strategy to present their uniqueness," he said at the three-day 2014 Shanghai Private Label Fair, which opened yesterday at the Shanghai Convention and Exhibition Center of International Sourcing.

Private label products are those branded with the name of retailers, especially supermarkets and hypermarkets. Private label was previously often used by manufacturers to save marketing and distribution costs. Suppliers also use it to skip the tedious procedures in order to sell their products at big retailers.

"With retailers competing with online shopping, they are now turning to private label to create their competitive edge," said Yao Zheng, secretary-general of Shanghai's Private Label Specialty Committee.

A survey by the Shanghai Commission of Commerce found that 54 percent of 107 retailers it interviewed in the country have developed private label products.

"Sales of our private label products doubled this year, and we believe there is still room for further expansion," said Larry Kung, chief operating officer of Leyou (China) Chain Store Co, a baby products retailer with over 400 outlets in the country.

Liu Yuwu, CEO of C&S Paper Co, said even makers of branded products are willing to enter the private label market.