FMCG private label sales increase during lockdown as shoppers look to cut costs

By

Isabelle Crossley

Published
Apr 30, 2020

Fast moving consumer goods businesses are seeing sales of their private label brands rise as consumers favour low-cost essential goods during lockdown.

 
Large FMCG retailers including Grofers, BigBasket, Flipkart, and Amazon India have all seen private label brands’ sales rise during lockdown, ET Bureau reported. Among other product categories, personal care products by private label brands have increased as cost cutting becomes increasingly important for Indian consumers under lockdown.
 
This trend is expected to continue after the lockdown is lifted. “Certain categories like health, bakery, organic milk, ghee, chocolates, snacks will drive this growth,” BigBasket’s CEO Hari Menon told ET Bureau. BigBasket expects sales from its private label brands to increase from 35% to 45% over the next six months. 

Private label products tend to have higher profit margins for multi-brand retailers than products from other brands. As many FMCG retailers have seen profits drop resulting from the ban on selling non-essential goods which tend to have larger profit margins, a rise in private label sales could help to offset this. 
 
Some FMCG retailers have even launched new private label product categories during lockdown, especially in categories such as hand sanitisers and disinfectants. The coronavirus pandemic and lockdown could thus lead to increased consumer preference for private label FMCG products in the longer term.