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Saturday, October 31, 2020

Vivek Prasad, VP – Own Brands, Grofers talks about his experience in the world of private label

How did you come into the World of Private Label?
I chose the FMCG industry to pursue my career since I was always passionate about – Gaining a deeper understanding of consumers & creating successful products. I quickly learnt the challenges faced in converting the consumer at the point of purchase in the trade and then picked up product development profile to fuel my passion. The growth of MT in India presented the right platform to study shopper’s behaviour and in-store buying influences. This got me excited and I decided to explore the Retail Industry. Working in the PL provided me with an opportunity to better understand the need gaps, customer decisions tree, in-store purchase influences like – merchandising, pricing, promotions, etc. and accordingly present a well-designed product.


Where do you see the Private Label Industry in 2020?
India is an extremely value-conscious market. PL is the means to fulfilling aspirations of upgrading to a higher quality without having to stretch beyond affordability range. With the recent economic slowdown, the growth of PL is going to be fast-paced. During GOBD (Great Orange Bag Days) Sale we saw 18% new users buying groceries online for the 1st time. That’s a very encouraging indicator. We at Grofers, provide access to SAVINGS to a much larger population stretching beyond Metro & Tier I cities. With our increasing penetration, access to savings to such vast value-seeking markets becomes easier as we offer a wide range of quality products at a great price through own brand portfolio.


What do you like most about the Industry?
The middle class is a significantly large segment of the total available market and it is aware that unlocking more value from their means is the best way to maximize the lives of their families. Private Labels help them forever make smarter choices of quality over reputation, utility over uniqueness and benefits over a brand. What excites me, is the ability to empower consumers by making quality accessible to them at a much better price point. We bring smiles to these consumers and their families by enhancing the quality of their lives through delivering higher value for their hard-earned money and taking their stress away from having to pay a premium for good quality products.


What one great thing does the Industry have going for it?
Indian PL industry has made its share of mistakes and learnt from them. The evolution of the PL industry in India has had a steep learning curve and is growing at a rapid pace. While foreign retailers in the market brought greater emphasis upon the high standards of quality in products, home-grown companies presented a deep understanding of consumer behaviour. Today, there is a much higher quality and price sensitivity in the system and the standards are improving fast. Stricter norms are being followed for product development and there is a greater emphasis on cost-effectiveness for price-sensitive Indian consumers. As a result, consumer confidence is improving in Private Label products.

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What is the biggest obstacle facing the Industry?
While the PL industry in India is evolving fast, it is away from delivering quality products consistently. Higher emphasis is still on stringent measures around process control and there is little focus on better control of quality ingredients and its consistency. We have manufacturers who are better trained and more sensitive to the required quality standards in the PL industry, but this consortium is still small. Growth of such manufacturers will help in overcoming the challenges to fast-paced growth. Recent consolidation in the Retail industry is facilitating this process. The investment in product design & development is also minimal. For us @ Grofers, Innovation is key and we are consciously investing in product differentiation.


Tell us more about your Private Label or Own-brand portfolio?
In the last 2 years, we have launched around 1200 Own Brand products and plan to increase this number to 1500 by the end of 2020. Our overall portfolio today comprises over 1400+ SKUs. The success of our PLs can be measured from the fact that we took less than 2 years to beat industry records by generating close to 40% of revenue from our Own Brands. We are focused on creating success stories in more challenging product segments where the industry has struggled. Our recent launches in the Personal Care portfolio have shown promising results. Moreover, the initial customer response for sensitive product categories like Kids & Fem care has also been very encouraging. We have exciting plans further in Personal care and Kids nutrition range.


Your take on how can a Private Label compete with a Brand?
Not only should the PL products be of good quality, but their launch should also be backed by a deep study of consumer behaviour & preferences. Consistently investing in research, keeping a tab of changing consumer preferences and accordingly designing the marketing mix is the key for a successful PL. In true sense, a Private Label can be called a success, only when a Consumer evaluates a Private Label against a brand on all the components of Marketing Mix – Product quality (promise, benefits, features, etc.), Packaging aesthetics (design & finish), Pricing, Merchandising and Promotion and still chooses to pick a Private Label over a Brand, and then, comes back to buy it again.


Any new segments you plan to launch in 2020?
We have grown at a phenomenal pace in the last 2 years. This is going to be a year of consolidation for us, in fact, it has already begun. Our focus this year will be on strengthening our position in the existing categories by introducing more products and innovations to gain a foothold in the existing portfolio. Some segments like Beverages, Personal Care, Kids Cereal & nutrition, will witness more aggressive portfolio growth than the others like Fabric Care & Home Care where we are investing heavily in significant product improvements and performance ability.


Your management mantra
Collaborate to Win together – I have always been a big believer in a participative style of working. Collaborating is the fastest and most effective way of bringing in a common belief and purpose to make teams work swiftly towards achieving it. It is as true to internal teams as it is to external partners.
Change is constant – We are living in a world where innovations & technology are changing the rules of the game at a swifter pace. We need to constantly learn and evolve. Consumers will keep telling us what to do, all we need to do is stay alert and passionate enough to sense it early and design our offering accordingly.
Building a sense of belongingness and environment of Trust in the team.

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