Retail
Private Labels vs National Brands: What’s Shifting Consumer Preferences
January 08, 2026
In the ever-evolving world of retail, the lines between traditional brand hierarchies are slowly becoming blurrier. In supermarket aisles and on smartphone screens, Indian consumers are placing value ahead of legacy brands and advertising muscle. The change is driven by a surging private label penetration. This is gradually reordering the notion of everyday products.
Introduction
When you browse on your shopping apps, or when you are strolling through your local supermarket, there is a change that you might have noticed recently. You would’ve seen a growth in the number of retailer-owner products that have become available. These are just as good as their counterparts when it comes to quality and packaging. This growing competition between private labels vs national brands is quietly transforming the retail landscape.
Private labels, once dismissed as the “budget option,” are gaining both credibility and market share. From Reliance Smart’s Snactac to AmazonBasics and Flipkart SmartBuy, these retailer-owned lines are no longer just alternatives; they’re becoming consumer favourites. This shift signals a broader consumer preference shift, one driven by a new balance between price, quality, trust, and convenience.
What are Private Labels and National Brands?
What are Private Labels?
Private labels are brands designed and marketed under the retailers' own banners. Retailer created products have complete freedom in terms of pricing, packaging, positioning and promotion unlike manufacturer driven items. Some of the most popular examples are Snactac by Reliance Smart, Clean Mate by Big Bazaar, AmazonBasics, Flipkart SmartBuy.
Within their own retail ecosystems, these labels can keep tight margins. They can bring value-for-money products to the market for today’s cost-conscious and quality-aware shoppers.
What are National Brands?
National brands manufacture these items on a larger level and they're available in many shops. Companies that encompass this segment include HUL (Hindustan Unilever Limited), ITC Limited, Nestlé, Dabur and P&G. They have the upper hand with established trust, established products and marketing efforts supported by years of exposure to the average consumer.
Quick Comparison: Private Label vs National Brand
| Feature | Private Label | National Brand |
|---|---|---|
| Ownership | Retailer | Manufacturer |
| Pricing | Lower, value-driven | Higher, premium segment |
| Marketing | Focused in-store, limited advertising | Heavy ad spends, large-scale campaigns |
| Availability | Exclusive to retailer | Widely distributed |
| Consumer Trust | Rapid growth | Legacy-driven |
The Rise of Private Labels in India and Globally
Private label growth in India has accelerated in the past few years. As modern retail and e-commerce grows, retailer-owned brands are moving well beyond the simple "low-cost" descriptor. They are building their own identities across food, beauty, apparel, and home care.
In more mature markets, like the UK, the US, and Germany, private label brands already comprise around 30-40% of the market. India is still growing but catching up fast. The pandemic has brought in higher prices and, thus, more online shoppers who are very price conscious yet willing to try out new things.
For their private brands, big-box retailers like Amazon and Flipkart are optimising product assortments, pricing, and promotions through data-driven insights. The result? Loyalty of customers and consistent sales prove that the difference between private label and national brand is no longer as wide as it once was.
Why Consumers are Embracing Private Labels
- Price advantage: Private labels are normally 20 to 40% cheaper compared to national brands. This is helpful during price increases.
- Comparable quality: The performance gap has also reduced, all thanks to improvements in sourcing and quality assurance.
- Exclusive benefits: Private labels can give many benefits to their consumers, including loyalty rewards and subscriptions.
- Social validation: Social validation is important. Which is why honest reviews, ratings, and recommendations from influencers have replaced traditional advertising.
Factors Driving the Consumer Preference Shift
1. Price Sensitivity
Higher prices have made Indian consumers pickier. Be it groceries or clothing, the mantra is affordability. And that's where private labels score-high quality essentials at reasonable prices are what the practical buyer looks for today.
2. Quality Perception
Private labels aren’t cheap substitutes anymore. Retailer-led labels can compete with well-known brands like Maybelline or L'Oréal. This was proven by brands like Nykaa Cosmetics. With stronger quality control measures and better supplier relationships, they have managed to change the perception from compromise to confidence.
3. Trust and Brand Loyalty
The older generation might stick with more traditional brands. Younger shoppers try more things. Value, ethics, and experience, not brand legacy, are what matter; for them, online reviews and social proof often weigh more than big TV ads.
4. Product Innovation and Differentiation
Private labels are quick. They can quickly launch products that are on-trend like sustainable clothing lines or organic pantry staples because their turnaround time is quicker. Thus, private labels are more on-trend and more responsive than national brands while national brands still reign with greater research and development.
5. Packaging and Brand Image
Retailer-owned products are investing heavily in design. Modern, minimal, and premium-looking packaging elevates shelf appeal and breaks away from the dated “generic” label image. Preferential in-store placement further boosts visibility and conversion.
6. Omnichannel Advantage
With integrated online and offline promotion, private labels have mastered omnichannel reach. From app banners to in-store posters, the visibility is seamless. Exclusive deals like “Amazon Lightning Offers” or Flipkart bundles strengthen recall and accessibility.
Challenges for Private Labels
| Challenge | Description |
|---|---|
| Brand Trust | Still building emotional credibility and long-term recall |
| Marketing Budget | Limited promotional spend compared to national campaigns |
| Product Innovation | Often reactive rather than research-led |
| Consistency | Quality can vary between categories or locations |
| Supply Chain | Scaling logistics to match demand can be a challenge |
How National Brands are Responding
Established players silently evolving in tune with the market trends.
- Digital storytelling for all: National companies are focusing on influencer driven campaigns and short social bites.
- Smart packs and pricing: Smaller SKUs, pack sizes & competitive pricing in tier 2 towns are keeping them in the game.
- Retail tie-ups: Co-branded exclusives and shelf partnerships ensure visibility inside modern trade stores.
- Sustainability focus: Refill packs and ethical sourcing are helping national brands build deeper emotional and environmental connections.
For example, some of HUL’s products are region-specific & cater to cultural preferences, while P&G’s minimalist packaging aligns with the sustainability movement, and helps them compete with agile private labels.
Conclusion
The distinction between private labels vs national brands is becoming increasingly blurred. If it once looked like a simple price war, today it is a competition for consumer trust. Private labels are demonstrating that they can be just as aspirational as established players while national brands are adapting to stay relevant in this fast-changing marketplace.
The future of private label brands will depend on how much they can build emotional trust & maintain consistency. For national brands, they have to stay authentic while becoming more flexible and data-savvy.
Ultimately, consumers will be winners. Now they enjoy a lot more choices, better value, & improved experiences across both physical and digital channels. In the new era, adaptability not legacy, will decide who wins India's brand loyalty race.
FAQs
1. What is the main difference between private labels and national brands?
The key difference between private label and national brand lies in ownership and availability. Private labels are retailer-owned. They are exclusive to specific stores or platforms. National brands are manufacturer-owned and sold widely across outlets.
2. Why are consumers switching to private labels?
Customers are preferring private labels because they offer competitive pricing. They have equivalent quality and a personalised shopping experience, which is also enhanced by digital engagement and rewards.
3. Are private-label products of lower quality than national brands?
No, not all private label brands are of lower quality. Most have invested in quality control, sourcing, and design, making their offerings on par with or even superior to national brands in many segments.
4. How do private labels impact national brand sales?
Private labels increase competition in the economy. They force national brands to rethink their pricing and promotional strategies.
5. Which industries are seeing the biggest private label growth in India?
Most of the growth is in the categories grocery, beauty and home essentials. Electronic accessories are also leading private label growth in India.
6. What is the future of private labels in India?
The future of private label brands is promising. As consumer confidence rises and omnichannel retail matures, private labels are expected to claim a larger share of India’s retail landscape.
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