Over the past few years, private label brands have penetrated into the Indian markets and, most arguably, have begun to dominate the national brands. This article evaluates the impact of private labels on the national brands in the Indian retail markets. It concludes that although the national brands may go through phases of valley and peaks, but with the immense potential of the Indian retail sector, the opportunities are ubiquitous for both the national brands and the private labels.

In the past few years, retailing has emerged as one of the most important sectors of the Indian economy in terms of its contribution to the GDP and employment creation. The lucrative growth of the Indian retail had prompted many corporate giants such as Reliance, ITC, Aditya Birla group to enter into the retail market years back. Today, many foreign players are also eyeing the Indian retail arena keenly. This has furthered the competition in the retailing sector. Although a major chunk of the Indian retail sector is accounted by the unorganized market, the recent years have witnessed a tremendous growth in the organized retail sector. The following factors are driving the growth of the retail sector in India:

Rising Incomes: A consistent increase in the incomes and purchasing power of the rural and urban people has provided the foremost shove to the Indian retail. According to a recent McKinsey study, the rise in the productivity of businesses and the competitiveness of the Indian economy will assist in inflating the incomes of the Indian population further. The study by the global consultancy firm reveals that the average real household disposable income will grow to Rs. 3,18,896 p.a by 2025 from Rs. 1,13,744 in 2005. The growth of the Indian economy has witnessed appositive trend in the past and is expected to grow at a rapid pace in the future.

Transformation in the Consumption Patterns: With the rising incomes, the Indian consumers are looking more for convenience and luxury. Several researches, which have the studied Indian consumer behavior have clearly depicted that the demand for the luxury products has increased tremendously in the past few years. This trend has given a further push to the growth of organized retail in India.

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