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Retailers’ private labels perceived more favourably

Consumers are perceiving retailers’ private labels or store branded products more favourably. This trend was  noted across Southeast Asia, according to a study done by Nielsen.

In fact, most consumers in the region are starting to view private label brands as a viable alternative to named brands.

The 2014 Nielsen Global Private Label Report, which highlights current consumer perceptions about private label quality, value, assortment and packaging, revealed that 70% of Malaysians have improved perceptions of such private label brands.

The number comes in highest at 84% in Vietnam and 83% of Thais (fourth highest globally).

However, private label sales have yet to be impacted by the positive sentiment, at this point, with private label share remaining low across the region.

“With an increasing proportion of modern trade retail store formats emerging across Southeast Asia, awareness of and sentiment toward private label brands is rising,” Pete Gale, head of retailer services for Nielsen in Asia Pacific said. However “improving perceptions are yet to convert to any kind of significant lift in sales at the check-out”, he added.

“However, and private label share in the region has increased only slightly over the last decade as named brand promotional activity increases,” said Gale. When it comes to private label pricing, perceptions around the value for money offered by private label are less positive in all Southeast Asia markets than the global average.

Just 46% of Indonesians believe private label brands offer good value for money, the lowest in the region and sixth lowest globally, followed by 55% in Vietnam, 57% in Singapore, 58% in Malaysia, 59% in Thailand and 66% in the Philippines, compared to 67% of consumers globally.

Conversely, as sentiment around private label quality lifts, an increasing number of consumers say they are prepared to pay extra for private label products they like.

“While the majority of Southeast Asian shoppers feel retailers’ private label offerings are fairly priced, they have some catching up to do compared to more mature private label markets such as the UK, the US and Australia,” said Gale.

“It is interesting to note, however, that a growing proportion are building a repertoire of private label products that they like and will buy again, even at a more expensive price than a branded alternative. This highlights a significant opportunity for retailers to tailor their private label ranging to cater to local tastes in order to drive trial and build loyalty over time.”

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