Private Label Brands Need To Market Better

Asia Pacific – According to the latest Nielsen report, private label brands contribute less than eight percent of sales, as they remain relatively undeveloped in most parts of the region.

Nielsen's annual Retail and Shopper Trends Report which identifies key trends and market shifts in the grocery sector in Asia Pacific, recorded a 13% increase in annual packaged grocery sales.

Peter Gale, Nielsen's managing director of retailer services in APMEA and Greater China, noted private label growth in Asia is hindered by low levels of consumer trust in categories where there is strong brand loyalty, and that retailers need to invest in
improving product quality and packaging, as well as marketing.

However, Taiwan, Korea and Indonesia emerged as key growth markets for private label brands, with sales recording a growth of over 20% over the past year.

"Sales of private label products are beginning to gain traction in basic grocery categories such as paper products, plastic wraps, water and staples like rice and cooking products where low price is more important to shoppers," Gale said.

Yet, online sales of grocery products are lagging behind other categories, despite a strong internet penetration and usage in the region. Less than 10% of shoppers are visiting grocery retailers' websites regularly, except in South Korea.

And those that visit the website hardly make online purchases, the study noted adding that they visit these websites to obtain information, view promotional leaflets or check store locations.

Nevertheless, Gale said retailers' online presence will be a significant driver of product sales and shopper engagement in the future.

"Markets where online retailing has gained traction, such as South Korea, provide valuable insight into the likely direction other Asia Pacific nations will take in the coming years as retailers invest in online infrastructure and develop models for profitable delivery of products," he said.

Additionally, the report also found that Asia Pacific consumers continue to be cautious when it comes to spending.