Introduction: In the past year, traditional retail has endured immense pressure, with the industry undergoing a brutal supply-side clearance and model iteration. Against this backdrop, 'private brands' have become a must for many retail enterprises seeking growth and building a differentiated moat. However, is it really that easy to build a private brand? From March 16-18, 2026, the CFC 11th China FMCG Conference grandly opened in Chengdu! On the afternoon of March 17, at the concurrent 'Challenges and Opportunities of Private Brands' seminar, Mr. Xue Wenfa, Deputy General Manager of Guangdong Yinxue Group and a senior private brand expert, delivered a brilliant speech titled 'Insight, Breakthrough, and Reconstructing the Growth Path of Private Brands'. The following is the on-site speech content by Mr. Xue Wenfa (partially abridged), compiled for our readers. Dear colleagues, hello everyone, I am Xue Wenfa. Many of you here today come with the 'pains' and needs of retail operations. Since you are here, I hope to bring you truly useful content and suggestions. I have a trait: I don't like to tell lies. You might be curious why I am here today to talk about private brands. My career path has been quite complex. I spent about 20 years in branding, then went to Meiyijia to help them build their entire private brand system. Now, I am at a manufacturing enterprise—Guangdong Yinxue Group. I used to work in branding, then entered the retail industry, and now I am in manufacturing, but I still pay attention to, research, and develop private brand products with a large number of retailers every day. I have always insisted on using 'brand-building' thinking and 'research' methods to do private brands, rather than simply viewing them with an OEM mindset. Today, I want to share with you: in the current highly competitive retail environment, how should private brands be done? And how to break through growth bottlenecks? The Pain of Crossing Cycles: From 0 to 60 points is easy 60 to 80 points is painful, and above 80 points is the most distressing We must recognize a reality: the wave of retail business closures in 2025 is essentially an industry-wide supply clearance and model iteration. Although the pain is intense, we also see that new models and formats such as warehouse membership stores, discount stores, and instant retail are growing against the trend. Market resources are accelerating towards more efficient and competitive new models. In this process, everyone is doing private brands. But my personal practical experience is:
Doing private brands, from 0 to 60 points is easy, and you will feel very happy;
However, from 60 to 80 points, this stage is painful;
Only when you endure to above 80 points do you truly see the peak, and then you are most distressed about breakthrough and growth. Many retail teams are currently in the 'painful period'. At the beginning, they are excited, watching sales rise rapidly, but soon they hit a ceiling and encounter growth bottlenecks. Why do bottlenecks occur? The core reasons are as follows: First, insufficient product strength, because everyone is 'copying homework'. There is a trend in the industry now: whoever is popular, copy them. You see Pangdonglai doing well, so everyone copies Pangdonglai's homework. But what is the result of copying homework? Severe homogenization. China's manufacturing is very developed, and the supply chain is complete. If you copy a hit product today, someone else can find a factory to make an identical one tomorrow. To solve this problem, enterprises must position their own value and establish their own characteristics and 'value differentiation genes'. Second, superficial supply chain relationships. Many retailers and suppliers have a simple buying-selling relationship: if you are cheap today, I come to you; if he is cheaper tomorrow, I switch. This way, you cannot do private brands well. A truly good private brand requires finding high-quality suppliers and forming deep strategic partnerships. My advice to retailers is: When you find a good supplier, dare to 'commit yourself to them', don't always have 'casual encounters'. Third, lack of true brand power. Many retail enterprises subconsciously treat private brands as 'low-end alternatives', trying every means to lower costs. This will definitely not work in private brands. You must use brand-building thinking and product manager requirements to engage in private brand work. If you violate the law of value, for example, selling a bottle of coconut water for 9.9 yuan because you desperately push the ex-factory price to an extremely low level, would you dare to drink the quality of such a product? The quality, depth, and breadth of the supply chain are the decisive factors determining how high and how far your private brand can go. Breaking Through Growth Bottlenecks and Building 'Value Differentiation' To break through the bottleneck from 60 to 80 points, enterprises must complete several key transformations. The first priority is the transformation of organization and capabilities. In the past, many retailers did private brands with a typical 'procurement-led' approach. Procurement's natural KPI is to lower purchase costs and pursue high gross margins. But doing private brands cannot be like this; it must shift from procurement-led to 'professional collaboration'. Whether large retail enterprises or small and medium-sized retailers, they must possess product thinking, value thinking, and also category thinking, using scientific category management and data mining to research and accumulate advantages step by step. We cannot rely solely on low prices to fight battles. Using value differentiation as a tool, establishing a market-driven operating system empowered by volume, can achieve long-term breakthroughs. 'Four Paths' for Small and Medium-sized Retailers For retailers of different sizes and capabilities, the paths to private brands are completely different. Especially for small and medium-sized retailers, with limited resources and high trial-and-error costs, how should they choose? I have summarized four clear paths: Path 1: Do not do private brands; increase direct sourcing
- Goal: Reduce costs, quickly replenish, maintain category richness, and pursue total cost leadership.
- Applicable conditions: Own procurement scale or supply chain capabilities are insufficient, and cannot bear the high cost of brand building.
- Advantages and risks: The advantage is low investment and quick results, perfectly avoiding the cost risk of brand failure; but the limitation is also obvious: extreme dependence on suppliers, and gross margin space and store differentiation will be greatly restricted. Path 2: Do 'small but strong' private brands
- Goal: Concentrate advantageous resources to form competitive differentiation and high repurchase rates in a few products or categories.
- Applicable conditions: Must have precise product selection vision, certain R&D/quality control capabilities, and be able to concentrate marketing resources to create a hit.
- Advantages and risks: This path has controllable investment, easily forms word-of-mouth and premium in local areas, and greatly enhances customer stickiness. But the risk is that product selection cannot fail; once it fails, the risk is amplified, and large-scale expansion will be limited to some extent. Path 3: Integrative participation in external supply chains (long-term exclusivity/cooperation)
- Goal: Leverage external factories' R&D and manufacturing capabilities to achieve both cost and differentiation.
- Applicable conditions: Retailers need to have a certain procurement volume or brand endorsement to negotiate long-term contracts with factories.
- Advantages and risks: This returns to what I said earlier about 'committing yourself'. The advantage is obtaining extremely stable high-quality supply and differentiation capabilities, with both supply and demand sides sharing risks; the disadvantage is that it requires extremely high negotiation capabilities from retailers, and once bound, the flexibility to switch suppliers decreases. Path 4: Join alliances with corporate governance structures (private brands of procurement-sales alliances)
- Goal: Many small and medium-sized retailers lack scale when fighting alone; alliances can amplify procurement scale and brand influence.
- Applicable conditions: Can deeply participate in alliance governance, share benefits and decision-making power.
- Advantages and risks: Can enjoy the benefits of scale procurement, alliance brand endorsement, and regional collaborative marketing momentum. But the difficulty lies in high coordination costs, potential governance conflicts, and brand positioning often being a 'compromise' to accommodate the interests of all parties. Adhere to Long-termism and Accumulate Category Advantages Everyone must understand that private brands are not a tool for retailers to 'harvest leeks'; they are the highest-level strategic defense line for retail enterprises. In today's era, the dividend period of casually finding an OEM to label and grabbing market share with low prices has completely ended. The success of private brands must be built on insight into consumers' real needs and on solid supply chain integration and development. Small and medium-sized retailers must be patient when building 'small but strong' private brands. Do not blindly broaden the width of SKUs; instead, dig deep into the depth of individual products. Treat every selected private brand product as an independent 'brand' to nurture carefully. Shift from procurement thinking to product manager thinking, and from squeezing suppliers to ecological collaborative development. As long as everyone can continue to deeply cultivate 'value differentiation' and adhere to long-termism, I believe you will surely endure the most painful '60 to 80 points' bottleneck period, and in the great reshuffle of the retail industry, rely on your own unique private brand system to stand on your own peak.