Key facts
- Retailers in China are increasing their focus on private-label brands.
- This strategy is a response to a crowded market, weak consumer spending, and rising online competition.
- Walmart plans to renovate more than 100 stores in China this year.
- Walmart's 'Marketside' brand, emphasizing fresh food, will receive more shelf space.
Brick-and-mortar retailers across China, from international players like Walmart to domestic chains such as Yonghui, are accelerating the development and expansion of their private-label brands. This strategic shift is driven by the need to differentiate in a highly competitive market characterized by sluggish consumer spending and increasing pressure from online retailers, both of which are impacting profit margins.
Walmart Inc.'s China division announced in April its intention to renovate over 100 stores nationwide within the current year. A key component of these renovations involves dedicating increased shelf space to its proprietary 'Marketside' brand. This brand specifically highlights fresh food items and products with short shelf lives, aligning with evolving consumer preferences and the need for differentiated offerings.
The move by these supermarkets to bolster their own-brand offerings is a direct response to the challenging economic environment, aiming to capture more market share and improve profitability in a saturated retail landscape.