VietNamNet Bridge – In the economies with developed retail
industry, the total revenue from private brands could make up 40 percent of the
total revenue. Meanwhile, the figure remains modest at 10 percent. However, it
is expected to reach 15-20 percent soon.
A lot of private brands of
retailers have been launched into the market over the last few years. Metro
Cash & Carry, for example, has six private brands, namely Aro, Fine Food,
Fine Dreaming, HoReCa, H-Line, SIGMA, while Big C chain has five - Wow, Bakery
by Big C, Casino, Big C, Huong vi (flavor) Big C, and LOTTEMart has three -
LOTTEMart, LOTTEMart Save and WithOne for some 650 products. Domestic retailers
have also had their own private brands. Co-op Mart now has 15 its private
brands.
Retailers’ private brands have
been present in a wide range of products, from fresh food, dried food,
cosmetics, and stationery to household goods. However, supermarkets have been
mostly focusing on two groups of products – household products and packed food.
Duong Thi Quynh Trang, Public
Relation Director of Big C, while affirming that Big C private brands would
cover all kinds of products, said the distribution chain would focus on
developing the brands for essential goods in the immediate time, including food
and foodstuff, cosmetics and household goods.
Trang, though declining to reveal
the exact figures about the sales of the products bearing Big C brands,
affirmed that the revenue has been increasing steadily with Wow – the brand for
dish washing products – leading the sales.
LOTTEMart has also reported the
satisfactory sales from the products with LOTTEMart’s brands. Kim Tae Ho,
Strategic Director of the distribution chain, said on Dau tu that since June
2012, the sales of the products has increased by 55 percent over the same
period of the last year.
Manufacturers may fail to be the
masters of their fates
In the competition among the
supermarkets’ private brands, those, who can control manufacturers and material
suppliers, would win the case. Therefore, the war of the private brands has a
close relation with the fates of manufacturers.
The manufacturers, who provide
goods to Wal-Mart, a distribution giant, have learned that they should not
provide more than 30 percent of their output to Wal-Mart, or they would lose
the control over their destiny, or suffer heavily, if Wal-Mart chooses other
suppliers or develops its private brands.
In fact, a lot of suppliers have
to stop their business, or have to sell huge amounts of goods though they could
not make any profits from the sales. However, they still want to manufacture
for the Wal-Mart, because the cooperation can help popularize their brands.
In Vietnam, according to Vu Vinh
Phu, Chair of the Hanoi Supermarket Association, two main scenarios can be
foreseen.
First, manufacturers accept to
make products for supermarkets which bear supermarkets’ brands and live off the
supermarkets.
Second, the products with
supermarket private brands would crushed the products of the manufacturers,
while the real manufacturers would see their market shares narrowed or have to
leave the market.
Phu said that in the current
economic difficulties, the high inventories have forced manufacturers to jump
into the race of supermarkets to develop their private brands.
Since early 2012, Ba Huan Company
began providing safe poultry eggs to some supermarkets such as Big C, Co-op
Mart and Metro in HCM City which then bear the supermarkets’ brands, accounting
for five percent of the total sales of the company.
Pham Thanh Hung, Deputy Director
of Ba Huan, said manufacturers have to provide products to supermarkets to be
sold under the supermarkets’ brands. The key is that 30 percent of the total
sales of the company are from the distribution channel, which means that the
supermarkets would choose other suppliers instead of Ba Huan, if Ba Huan does
not “accept cooperation.”
Compiled by C. V
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