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Tuesday, October 20, 2020

Retailers, e-commerce platforms turn to private label brands to fill in gaps in supply chains

As FMCG companies face supply disruptions due to the ongoing lockdown, retailers and e-commerce platforms have either fast-tracked the introduction of new private label branded products or ramped up distribution of existing private label portfolios.

The companies believe this will help plug in gaps that arise due to the supply chain disruptions as well as improve access to products in categories such as staples, hygiene products and packaged food.

The lockdown period will be a major milestone in the evolution of private brands, where private brand products of retailers had a chance to fight on an even footing with national brands and could capture customers’ mind and wallet share on the strength of great availability and great quality, said Devendra Chawla, MD & CEO, Spencer’s Retail.

Walmart India for instance, which runs Best Price cash & carry stores, relied on its MSME suppliers to launch its private label brand called Great Value Hand Rub Aqua swiftly to meet the growing demand for hygiene products.

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In order to ensure that the members can seamlessly procure essential items across categories, Walmart has ramped up new product development in their private brands segment and fast-tracked commercialisation of products such as sanitisers, liquid washes and bulk packs of staples. They believe this exercise will fill any gaps in supplies during this crisis and will help their members provide essential items to the community, said a spokesperson of the company.

Metro Cash & Carry India’s private label brands have witnessed growth in the past few weeks and enabled the company to cater to its consumer needs through its own brands portfolio. 

Arvind Mediratta, MD & CEO, Metro Cash & Carry India, said that in the current situation, they are supporting their vendor partners (for own brands) in getting permissions to move goods, open up their facilities to manufacture and move goods to the stores across 11 states. In cases where vendors are unable to organise transportation, Metro supported them with moving stocks from their warehouses.

Mediratta added that they work with multiple vendors across locations and these vendors are based in and around tier-I cities or metros which has been advantageous, unlike most big FMCG companies who have manufacturing units in locations like Baddi, Goa, Guwahati which have had huge concerns due to transportation restrictions and labour issues.

E-tailers like Flipkart have introduced hand-sanitisers and masks under the Flipkart SmartBuy brand.

The company is taking every step to ensure the availability of products to their customers in this time of need. With this in mind, while they are ramping up capabilities and hiring more warehouses and delivery staff, they are also ensuring a seamless supply of essentials through their private labels, said Saurabh Kumar, Founder, Grofers.

Grofers business currently consists of 40% owned brands and they plan to increase this to 60% in the coming six months.

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