---
title: "Retailers Without a Private Brand Strategy Have No Future"
description: "In recent years, competition in the retail industry has intensified, and the traditional 'rent-collecting' model is being phased out. For retailers, how to navigate the cycle and become the true 'survivor' or even 'winner'? Developing private brands is becoming the strategic direction and core weapon for more and more retail enterprises. Private brands: a century-old path, but also a strategic choice. As early as 1924, UK's Tesco began selling private label products, a century ago. On this path, there are both successful examples like Costco's 'Kirkland Signature' growing into a global brand, and countless failures that faded away."
author: "薛文发"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2026-02-22"
categories: "Brand Marketing, Industry Trends, Management & Methods"
language: "en"
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citation: "薛文发. “Retailers Without a Private Brand Strategy Have No Future.” New Distribution, 2026-02-22. https://xinjignxiao.com/en/articles/retailers-without-a-private-brand-strategy-have-no-future-8ad53786/"
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---

# Retailers Without a Private Brand Strategy Have No Future

> In recent years, competition in the retail industry has intensified, and the traditional 'rent-collecting' model is being phased out. For retailers, how to navigate the cycle and become the true 'survivor' or even 'winner'? Developing private brands is becoming the strategic direction and core weapon for more and more retail enterprises. Private brands: a century-old path, but also a strategic choice. As early as 1924, UK's Tesco began selling private label products, a century ago. On this path, there are both successful examples like Costco's 'Kirkland Signature' growing into a global brand, and countless failures that faded away.

In recent years, competition in the retail industry has intensified, and the traditional 'rent-collecting' model is gradually being eliminated. For retailers, how to navigate the cycle and become the true 'survivor' or even 'winner'?
Developing private brands is becoming the strategic direction and core weapon for more and more retail enterprises.
**Private brands: a century-old path, but also a strategic choice.** As early as 1924, UK's Tesco began selling private label products, a century ago. On this path, there are both successful examples like Costco's 'Kirkland Signature' growing into a global brand, and countless failures that faded away.
This proves a point: private brands are by no means simple OEM production, but a **deep strategic planning** related to the long-term survival and competitiveness of the enterprise.
Soul-searching question:
Can your enterprise really do private brands?**
Not all retail enterprises are suitable for this battle. Before pressing the start button, two questions must be clarified.
**Question 1: Does your corporate strategy really need private brands?**
Corporate strategy determines the direction. Private brands, as a core component of merchandise strategy, must serve the overall planning of the enterprise.
**When your positioning is a 'pure platform', it is not suitable to develop private brands.**
For example, pure online e-commerce platforms, luxury discount stores, or boutique buyer shops have core value in gathering brands, providing scarcity or unique experiences.
If you forcibly launch private brands at this time, it will blur your positioning and dilute consumer trust. **For example**, Tmall Global's core is to introduce overseas authentic products. If it vigorously promotes 'Tmall brand' beauty products, it will directly conflict with the international brands it hosts, shaking the platform's foundation.
**When your strategic goals are to build differentiated competitiveness, improve profits, and enhance customer loyalty, private brands are a highly suitable weapon.**
It can create barriers through exclusive products, improve gross margins through better supply chain structures, and bind customers through unique value experiences. For example, MUJI, with its philosophy of 'no-brand quality products', has built deep differentiation and loyalty, and its private brand is the entirety of its business model.
**Question 2: Do your resources and capabilities suffice to support private brands?**
Private brands are a heavy-investment, long-cycle project, with scale and professional capability as two key thresholds.
**First, the scale threshold.** Private brands rely on centralized procurement and production to reduce costs. If the enterprise's procurement scale is small, it is difficult to obtain competitive costs and stable supply chain support. For example, if a regional small supermarket independently develops soy sauce, its order volume may be less than half an hour's production capacity of a large manufacturer's production line, making it impossible to obtain quality supply chain support, thus cost and quality are hard to guarantee.
**Second, the talent and system threshold.** From market insight, product development, supply chain management to brand marketing, private brands require professional teams and mature processes. With insufficient overall profits, small and medium-sized enterprises often cannot afford to build and maintain such a professional private brand team.
So, do small and medium-sized retailers have no chance at all?
Not so. **Alliance is a proven path.** By forming or joining retail alliances, small and medium-sized enterprises can aggregate demand, share procurement, logistics, and even R&D resources, thereby gaining the qualification to dialogue with giants.
Japan's largest retail alliance, **CGC**, aggregates hundreds of retail enterprises to jointly develop highly competitive private brand products; Germany's **Edeka**, though a large cooperative, essentially unites many independent retailers to form strong procurement and brand synergy. Domestically, Ant Business Alliance has also grown in scale over the years and developed a large number of quality private brand products.
**Strategic evolution from 'white label' to 'brand'**
When an enterprise decides to engage in private brands, the next step is choosing the strategic path. These four strategies are not simply parallel but represent the progressive process of private brands from birth to maturity, each step requiring matching resources and market stage.
1\. Price strategy (followership strategy): survival breakthrough, trading price for volume
This is the initial approach for many private brands, with the core goal of **quickly gaining market share and direct profits**. Strategically, it closely follows the products of market-leading brands, highly imitating appearance and function, but achieving significant low prices (usually 20%-60% lower than leading brands) by optimizing supply chains and cutting marketing expenses.
  * **Key practices**: Focus on basic categories with mature technology and price-sensitive consumers (such as daily chemicals, grain and oil). Simplify product design, emphasize functionality over emotional value in packaging.
  * **Advantages and risks**: The advantage is quickly attracting price-sensitive customers and boosting sales in a short time. But the risks are equally obvious: it is essentially 'involutionary' competition, easily falling into price wars, dragging down the profit levels of the entire category; in the long run, it cannot build true brand loyalty, and once the price advantage is lost, customers will leave.**
**For example**, many large domestic supermarkets initially launched private brand rice and laundry detergent with the strategy of 'same quality, low price' to quickly enter the market, but in the long run they did not form a competitive advantage and were gradually eliminated in recent competition.
**2\. Value strategy (differentiation strategy): consumer-oriented, winning with value**
This is the **key turning point for private brands to upgrade from 'product' to 'brand'**. The strategic core shifts from 'cheaper' to 'better or more special', aiming to provide unique value to the target customer group.
  * **Key paths**: Establish a professional product development team to deeply understand unmet consumer needs. Differentiation can be reflected in: **ingredient upgrades** (e.g., using healthier raw materials), **design innovation** (e.g., more user-friendly packaging), **functional optimization** (e.g., solving specific usage pain points), or **emotional connection** (e.g., humanistic connection). At this stage, quality control and stable supply chain capabilities are crucial.
  * **Value manifestation**: Private brands entering this stage begin to accumulate brand equity. Consumers buy not just because of low prices, but because they identify with the unique value offered.**
**For example**, some product lines of Walmart's 'Great Value' have gone beyond simple imitation. Its bakery items, specific formula cleaners, etc., have won the trust of household users with stable quality and targeted improvements, forming a value perception of 'reliable and affordable'.
**3\. Category strategy: accumulating volume to empower, building barriers**
When multiple value-differentiated 'hit products' with sequence and system are successfully incubated in a single category, the next step is the category strategy. Its core is **to establish comprehensive and deep competitive advantages in one or several core categories through systematic product matrix planning**, making private brands the first choice for consumers when shopping in that category.
  * **Key practices**: Lay out the target category across all scenarios and price points, forming private brand product lines covering entry-level, mainstream, and high-end. At the same time, give concentrated resource support to the private brand in that category in display, promotion, and membership operations.
  * **Strategic value**: It builds strong competitive barriers. Once consumers recognize the professionalism and credibility of the private brand in that category, they will develop strong shopping dependence.**
**For example**, **7-ELEVEn** has built a strong barrier in the fresh food category. Its 'rice balls', 'oden', 'bento' and other series not only succeed as individual products but also collectively shape the fresh food category mindshare of 'convenient, delicious, and safe', becoming its core engine for attracting customers. Sam's Club's 'Member's Mark' has also formed a similar product matrix advantage in nuts, snacks, and bakery categories.
**4\. Premium strategy: ultimate goal, omnichannel marketing**
This is the high-end form of private brand strategy, whose success is entirely built on the **strong brand equity accumulated by the retailer and its private brands**. It no longer just benchmarks price or differentiation, but **defines new standards**, aiming to launch products that surpass mainstream brands in quality, design, and experience, achieving brand premium.
  * **Prerequisites and foundation**: The retailer's main brand already has extremely high reputation and trust; the private brand has become synonymous with quality in core categories. At this point, consumers buy not just the product, but trust in the retailer's brand promise and identity recognition.
  * **Strategic manifestation**: Products typically use top-grade raw materials, innovative processes, or designs, and are priced boldly higher than leading brands (premium can reach 10%-50%). Marketing emphasizes brand stories, craftsmanship, and unique experiences.**
**For example**, **Sam's Club**'s 'Member's Mark' premium line, such as Australian grain-fed steaks and wines from specific regions, has quality and prices clearly higher than similar branded products on the market, yet members still flock to them. Behind this is the strong credit endorsement brought by Sam's strict selection. Similarly, **Pangdonglai**'s private brands can have a 'spillover effect' and be displayed by other supermarkets as traffic drivers precisely because its products have established a high-end impression of 'quality and good price' in consumers' minds.
Final thoughts
The four strategies of private brands outline a clear evolution curve: **survival — foothold — advantage — leadership.**
Which step to choose, or which step you are currently at, depends on the enterprise's strategic ambition, resource reserves, and market stage.
Importantly, this is a path that requires strategic determination and long-termism. It demands that enterprises not only have the patience to make products but also the ambition to build brands.
Private brands, the deepest competition in the retail industry, ultimately test the comprehensive ability of enterprises to define value, create value, and convince consumers of it. Whoever can make firm strategic choices at the right stage and persist will have a better chance to grasp the key to the future.
On March 16-18, 2026, in Chengdu, the 'CFC 11th China FMCG Conference' will feature a special forum [Challenges and Opportunities of Private Brands]. We will invite industry experts and frontline practitioners to deeply discuss the real paths, organizational mechanisms, and risk boundaries of leading retailers and industry partners in advancing private brands.
Also, under the wave of private brands, how should leading brand manufacturers respond—open capacity, actively embrace, or resist and reject? How will the positioning of supermarket private brands and leading brands compete and balance in the future?
Only by understanding the logic behind the changes can we find a firm way out. In March, Chengdu, let's explore the survival and development path in the new cycle together!


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## Citation metadata

- Publisher: New Distribution
- Author: 薛文发
- Published: 2026-02-22
- Canonical: https://xinjignxiao.com/en/articles/retailers-without-a-private-brand-strategy-have-no-future-8ad53786/
- Original source: https://mp.weixin.qq.com/s/HsXIjmQJPlPEo5D8NHPcZw

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