The specialized Salon «Private Label» is held within the brand-show «Interbytchim-2010» since it's a great opportunity for the producers of household goods, personal care products and cosmetics to provide increase in production capacity thus achieving their goals in cooperation with Russian retail chains interested in private label production.

Private label is becoming an obvious trend in the Russian retail. According to the latest research of ACNielsen private label products of retail chains are getting more and more popular. More than half the inhabitants of Moscow and Saint-Petersburg are aware of private label. Retail chains representatives promise to increase sales of private label goods. Private label production does not develop in Russia as fast as in western countries. For instance in England more than 70% of turnover falls on this product category. However according to the latest retail research of ACNielsen the process is going on in Russia.

The research data say that today 55% of Moscow and Saint-Petersburg consumers know about private label production and 30% of people have bought private label goods for the last month.

Private Label — What is it?
Private label products are goods produced by retail chains under their own brands. For example, Kopeika juice or Paterson water.

What opportunities does it give to the producer?

• Decrease in expenses on advertisement. Your goods are already on sale in the shop under the famous name.
• A more profitable price niche (marks-up on private label goods are 30-40% lower).
• Output at full capacity and marginal costs minimization.
• Extra profit through pushing up sales.

What opportunities does it give to the seller?

• Strengthening of the market position by singling out the product-line among competitors.
• Lower prices in the product category.
• Permanent clients.
• Increase in profit.
• Opportunity of rooting in the sphere of industry.

«Introduction of the Private label system is one of the most important strategic tasks in the near future» — says Sergey Lomakin, CEO of the retail chain «Kopeika». Now 15% of the turnover falls on private label production. For the next two years it is expected to rise up to 50%.

Last year the private label turnover in the «Pyaterochka» retail chain was 9% and it goes on growing. Sergey Lomakin considers that the high share of private label goods in the sales structure of «Pyaterochka» has contributed to drawing investments during IPO.

Pavel Musyal, operation director of «Perekrestok», remarks that the share of private label in retail chains in Russia will grow notwithstanding the type of the shop.

References: «Business» newspaper