PLUGGING GAPS IN SUPPLY CHAIN. Retailers, e-commerce platforms turn to private label brands to plug gaps in supply chains

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

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.

Devendra Chawla, MD & CEO, Spencer’s Retail, said, “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.”

Take for instance, Walmart India, which runs Best Price cash & carry stores. It 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.

A spokesperson for Walmart India said: “In order to ensure that our members can seamlessly procure essential items across categories, we have ramped up new product development in our private brands segment and fast-tracked commercialisation of products such as sanitisers, liquid washes and bulk packs of staples. We believe this exercise will fill any gaps in supplies during this crisis and will help our members provide essential items to the community.”

Encouraging growth

Metro Cash & Carry India said its private label brands have witnessed “encouraging 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, “In the current situation, we are supporting our 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.”

“We work with multiple vendors across locations and these vendors are based in and around Tier-1 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, labour issues etc,” Mediratta added.

E-tailers are not far behind. Players such as Flipkart have introduced medical supplies range with the launch hand-sanitisers and masks under the Flipkart SmartBuy brand

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

Currently, private labels or “owned brands” constitute 40 per cent of Grofer’s business and it plans to increase this to 60 per cent in the next six months.