What are Private labels?
Private labels, also known as private brands or store brands, are products that are manufactured and sold under the brand name of a retailer or distributor rather than the manufacturer or supplier.
Private label products are usually FMCG (Fast moving consumer goods) that can be easily sourced and are designed to compete with other branded products in terms of quality, features, and price. Retailers may partner with manufacturers to develop and produce customized products, or they may have their own in-house manufacturing capabilities.
Private label products offer several benefits to retailers, including a greater control over product quality and pricing, increased customer loyalty, and higher profit margins. They can also help retailers differentiate themselves from competitors and build a unique brand image.
A surge in the Private Label Sector in KSA
A study by NielsenIQ shows that there was a 10% hike in prices of FMCG goods from July-September 2022 in KSA because of inflation.
With a constant rise in inflation, private labels are becoming increasingly popular amongst consumers globally, because usually they offer lower prices and better deals than their branded counterparts.
According to another study conducted by NielsenIQ, in Africa and the Middle Eastern regions private labels make up for 6.1% of the total sales despite the small number of private label brands.
Some Analytical insights on Private Label popularity on the ClicFlyer App
*For the following analysis, All the Private label offers promoted in year 2022 by Top Retailers from KSA were considered.
• A 30% increase in promotions of private label products was observed in 2022 as compared to 2021
Category wise Promotion Share Distribution
*The percentage share displayed, is out of the total percentage of private label promotions only.
• Retailers in the private label industry have been placing their attention on Fast Moving Consumer Goods (FMCG) such as grocery items, frozen foods, bakery products, and beverages. The reason for this focus is due to the availability of raw materials in the market and the high level of consumption of these products
• A noteworthy increase by 72% in promotions of Private Label Laundry and Cleaning products was recorded, although the category share was only 6.9%
Top Private Label Sub-Categories with Highest Promotions
Following is the subcategory level breakdown for the Top 5 categories mentioned above:
• Sauces and Spreads, Cakes and Pastry, Disposables, Ready to eat frozen food products and household cleaners were the most popularly promoted sub-categories.
Popular Private Label Subcategories on ClicFlyer App
• As per ClicFlyer’s user engagement data, deals on disposables from Private labels received the highest user engagement as compared to other subcategories
A significant hike in user engagement during some special events like Ramadan, Saudi National Day, New Year was observed despite no noticeable change in promotional activity was seen for this category.
• Oil and Ghee made the list with only 4% user engagement
Commonly Promoted Product/ Pack Size
The following table shows commonly promoted product-pack size combinations within the popular sub-categories
• It was interesting to observe that Extra-Virgin olive oil (500 ml and 2 Litre) was the most highly promoted product in ghee and oil in the region
Encouraging customer loyalty is a vital aspect of retail, and one effective method of achieving this is through promoting private label products.
Consumers can also benefit greatly from private label products as they often come with substantial discounts compared to branded products. By keeping an eye out for private label items, shoppers can save money without compromising on quality. Additionally, the private label industry is projected to continue expanding, meaning that more retailers will be investing in creating their own product lines. This will result in an even greater variety of affordable, high-quality products available to consumers.
ClicFlyer is a leading analytics company that offers exceptional retail analytics services in the UAE and KSA regions. The ClicFlyer mobile app is a successful platform for discovering promotions and deals in 9 different countries including KSA, UAE, Kuwait, Bahrain, Qatar, Oman, Egypt, Jordan and RSA. Retailers can greatly benefit from our analytics dashboard, which provides a wealth of useful historical data. For further details, please contact us at email@example.com.