Private Label in China 2009: A Market Analysis

Published by: Access Asia

Published: Jun. 18, 2009 - 62 Pages

Table of Contents

INTRODUCTION

1 ECONOMIC BACKGROUND

1.1 Retail in Context

Table 1.1 RETAIL SALES AS A % OF GDP, 2002-2008

Table 1.2 TOTAL RETAIL CURRENT MARKET VALUE, 1999-2008

Table 1.3 TOTAL RETAIL CONSTANT MARKET VALUE, 1999-2008

Table 1.4 PER CAPITA CURRENT VALUE RETAIL MARKET, 1999-2008

1.2 Consuming China

Table 1.5 POPULATION AND PER CAPITA GDP OF “CONSUMING CHINA”, 2008

Table 1.6 TWO COMPARATIVE ESTIMATES OF THE TOTAL SIZE AND SHAPE OF “CONSUMING CHINA”, 2008

Table 1.7 COMPARATIVE BREAKDOWN OF AVERAGE HOUSEHOLD INCOME & SPENDING IN “CONSUMING CHINA” CITIES’ AGAINST TOTAL NATIONAL AVERAGE, 2008

Table 1.8 US$ PER CAPITA RETAIL SALES BY TOP-, MIDDLE- & BOTTOM-SCALES, 2002-2008

1.3 Developing Domestic Consumption

1.4 The Retail Industry

1.4.1 Retail Industry Above the Government Statistics Threshold

Table 1.9 TOTAL RETAIL INDUSTRY ABOVE THE GOVERNMENT STATISTICS THRESHOLD, 2002-2008

1.4.2 The Total Retail Industry

Table 1.10 THE TOTAL RETAIL INDUSTRY STRUCTURE, 2002-2008

1.4.3 Supermarket Industry Above the Official Benchmark

Table 1.11 SUPERMARKET TOTAL OUTLETS, FLOOR SPACE, STAFF, SALES & PROFITS FOR CHAIN STORES ABOVE THE GOVERNMENT STATISTICAL THRESHOLD, 2002-2008

1.5 The Relative Potential Markets in Urban Areas

1.5.1 The Retail Market Split

Table 1.12 RETAIL SALES VALUE BY HABITATION, 2002-2008

Table 1.13 RETAIL SALES % BREAKDOWN BY HABITATION, 2002-2008

1.5.2 The Leading Commercial Cities

Table 1.14 LEADING CITIES KEY ECONOMIC INDICATORS, 2007

1.6 Does Rural China Have a Potential?

1.6.1 Does Rural China Have a Potential?: Per-capita Sales by Province

Map 1.1 PER CAPITA RETAIL SALES BY PROVINCE, 2000, 2007, 2008

1.6.2 Does Rural China Have a Potential?: Rural Retailing Development Project

1.7 Operating Costs

Table 1.15 LIANHUA SUPERMARKET BREAKDOWN OF OPERATIONAL COSTS, 2005-2008

Table 1.16 THE LEADING 10 LISTED DOMESTIC RETAIL COMPANIES’ BREAKDOWN OF OPERATIONAL COSTS, 2005-2008

1.8 Outlook

1.8.1 Outlook: Consumer Thrift

1.8.2 Outlook: Company Competition

1.8.3 Outlook: Urbanisation

1.8.4 Outlook: Total Market Size

Table 1.17 FORECAST TOTAL CONSTANT VALUE RETAIL SALES, 2009-2013

1.8.5 Outlook: Food/Non-food & Urban/Rural Values

Table 1.18 FORECAST CONSTANT VALUE RETAIL MARKET BY FOOD/NON-FOOD & URBAN/RURAL SPLITS, 2009-2013

1.8.6 Outlook: Supermarket Sector Measures

Table 1.19 FORECAST TOTAL SUPERMARKET SALES, PROFITS, SIZE & STAFF (ABOVE THE GOVERNMENT STATISTICAL THRESHOLD), 2009-2013

2 DEVELOPMENT OF PRIVATE LABEL IN CHINA

2.1 The First Private Label Products in China

2.2 The Private Label Sectors

2.2.1 The Private Label Sectors: Supermarkets & Hypermarkets

Table 2.1 SELECTED SUPERMARKET/HYPERMARKET RETAILERS AND THEIR PRIVATE LABEL ENTRY

Table 2.2 WUMART STORES: PRIVATE LABEL DEVELOPMENT

Table 2.3 CHINA’S TOP 50 FAST MOVING CONSUMER GOODS (FMCG) CHAIN-STORE RETAILERS TOTAL SALES TURNOVERS AND OUTLET NUMBERS, 2008

2.2.2 The Private Label Sectors: Department Stores

2.2.3 The Private Label Sectors: Home Improvement Chains

2.2.4 The Private Label Sectors: Drug Stores & Beauty Chains

Sephora

Table 2.4 SEPHORA: NUMBER OF STORES IN CHINA, MAY 2009

Sa Sa

Gialen

Nepstar

Table 2.5 CHINA NEPSTAR CHAIN DRUGSTORE: NUMBER OF PRIVATE LABEL PRODUCTS, 2006-2008*

Table 2.6 CHINA NEPSTAR CHAIN DRUGSTORE: PRIVATE LABEL AS A % OF REVENUE 2007-2008*

Table 2.7 CHINA NEPSTAR CHAIN DRUGSTORE: AS A % OF OVERALL REVENUE 2007-2008*

Table 2.8 CHINA NEPSTAR CHAIN DRUGSTORE: FINANCIAL RESULTS, 2003-2008*

Watson’s

2.2.5 The Private Label Sectors: Consumer Electronics Retailers

3 CONSUMERS & SUPPLIERS

3.1 Consumers: What do they think of Private Label?

3.1.1 Background Consumer Issues

Table 3.1 SHOPPERS PERCEPTIONS OF PRIVATE LABEL COMPARED TO BRANDS, 2006

Table 3.2 WHICH STATEMENT BEST DESCRIBES YOUR REGULAR SHOPPING BEHAVIOUR, 2008

Table 3.3 PERCENT OF RESPONDENTS CONCERNED ABOUT FOOD AND BEVERAGE SAFETY, 2008

Table 3.4 HOW MUCH EXTRA WILL CHINESE CONSUMERS PAY TO ADDRESS THEIR FOOD AND BEVERAGE QUALITY CONCERNS, 2008

Table 3.5 PERCENT OF RESPONDENTS WHO AGREE/STRONGLY AGREE, 2008

3.1.2 Consumer Acceptance of Private Label

Table 3.6 REASONS FOR CHOOSING PRIVATE LABEL PRODUCTS, 2004

Table 3.7 SHOPPERS WHO ARE EITHER AWARE OF OR BOUGHT PRIVATE LABEL IN THE LAST MONTH, 2005

3.1.3 How Retailers Promote Private Label To Consumers

Credit card/membership card

In-Store Advertising

Table 3.8 IMPACT OF ADVERTISING ON CHINESE CONSUMERS, 2008

Table 3.9 MUST-HAVE INFORMATION BEFORE PURCHASING A NEW PRODUCT, 2008*

3.2 The Relationship Between Product Suppliers and Retailers

3.2.1 Creating a New Dynamic

Table 3.10 PERCENTAGE OF BRAND OWNERS WHO AGREE/SLIGHTLY AGREE, 2006-2007

3.2.2 Facing Up To The Quality Issue

Table 3.11 SELECTED SUBSTANDARD PRIVATE LABEL PRODUCTS, 2005-2008

4 PRIVATE LABEL MARKET SIZE

4.1 Current Market Size

Table 4.1 CHINA TOP-100 RETAILER’S TOTAL SALES AND PRIVATE LABEL SALES COMPARED, 2005-2009*

4.2 Forecast Market Size

Table 4.2 CHINA TOP-100 RETAILER’S FORECAST SALES AND PRIVATE LABEL SALES COMPARED, 2010-2014

5 STORE CHECKS

Table 5.1 SELECTED PRICES OF PRIVATE LABEL ALCOHOLIC PRODUCTS, MAY 2009

Table 5.2 SELECTED PRICES OF PRIVATE LABEL NON-ALCOHOLIC PRODUCTS, MAY 2009

Table 5.3A SELECTED PRICES OF PRIVATE LABEL HOUSEHOLD AND KITCHEN PRODUCTS (PART I), MAY 2009

Table 5.3B SELECTED PRICES OF PRIVATE LABEL HOUSEHOLD AND KITCHEN PRODUCTS (PART II), MAY 2009

Table 5.4 SELECTED PRICES OF PRIVATE LABEL COSMETICS & TOILETRIES, MAY 2009

Table 5.5 SELECTED PRICES OF PRIVATE LABEL VEGETABLES, SEAFOOD & MEAT, MAY 2009

Table 5.6 SELECTED PRICES OF PRIVATE LABEL FOOD PRODUCTS, MAY 2009

Table 5.7 SELECTED PRICES OF PRIVATE LABEL TOWELS, BLANKETS, SOCKS & UNDERGARMENTS, MAY 2009

Table 5.8 SELECTED PRICES OF PRIVATE LABEL BICYCLE & AUDIO-VISUAL ACCESSORIES, MAY 2009

6 CONTACTS

6.1 Trade Organisations

6.1.1 China Chain Store & Franchise Association (CCFA)

6.2 Government Departments

6.2.1 Ministry of Commerce (MOFCOM)

6.2.2 Ministry of Finance

APPENDIX: MARKET BACKGROUND

A.1 Fast Facts

A.2 Regions of China

Map A.1 CHINA: PROVINCES AND MUNICIPALITIES

A.3 Exchange Rates

Table A.1 AVERAGE ANNUAL RENMINBI EXCHANGE RATES AGAINST A VARIETY OF CURRENCIES, 2001-2008

Abstract

This report covers the existence and development of private label (otherwise known as own brand and store brand) goods within the retailing industry in the People’s Republic of China, and includes coverage of both food and non-food products offered as private label by leading retail chains in China.

This recently updated report includes:

• An overview of China’s total retail market with sales statistics up to 2008;
• Analysis of the growth and potential of consumer China;
• An overview of China’s total retail industry with sales statistics up to 2008;
• Forecast retail industry growth in China up to 2013;
• An historical analysis of the development of private label in China to date;
• Case studies and examples of private label lines among key retail companies within the key retail sectors;
• Analysis of consumer and supplier responses to the development of private label;
• Analysis of the total private label market with historical market value up to 2008, estimates for full-year 2009 and a forecast of growth up to 2014;
• Store checks giving examples of private label goods in key sectors, including product description, brand name, retail company, pack size and price;
• Overview of China’s demographics and macroeconomics.

Chinese consumers are also turning on to private label. The old mantra that Chinese consumes only love brands now rings hollow. Perceived value-for-money, coupled with increasingly good quality has brought much more consumer interest and acceptance. Also, for consumers the knowledge that if there are any product problems they can raise the issue direct with the retailer means better face-to-face recourse, rather than frustrating, long-distance, impersonal correspondence with a remote manufacturer.

Farmers’ cooperatives are getting larger, and are now often significant enough to deal direct as major suppliers to the leading modern grocery chains, providing quality-assured product to the supermarkets and hypermarkets that can be sold under various own brands iterations.

Commodity products, such as sugar, make their manufacturers more reliable money sold in bulk to the big retail groups to sell in their own packaging.

And there are even premium private label brands now emerging in China. Having nearly quadrupled in value in the past five years, the next five are likely to see the market value at least triple, with the significance of private label becoming much larger, especially among the modern grocery chains.

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