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Retailers get aggressive with private brands as consumer demand shifts

Published: 23 Apr. 2025, 21:33

Plux home appliances developed by Lotte Himart [LOTTE HIMART]

Retail companies are ramping up their private brand (PB) product lines in an aggressive push to take greater control of production and meet shifting consumer demands. Traditionally focused on selling goods supplied by manufacturers or other brands, retailers are increasingly moving toward planning and commissioning their own products.

While PB items from large supermarkets and convenience stores have historically centered around food and ready-to-eat meals, the category is now expanding to include clothing, cosmetics and even home appliances.

Lotte Himart officially launched its PB brand “Plux” on Monday. The line was developed based on a yearlong analysis of consumer preferences. Products were stripped down to core functions, simplified in design, and reduced in size to offer more affordable pricing. The Plux refrigerator, for example, offers a compact 330-liter capacity but still meets the highest energy efficiency rating. Its free warranty period, typically one to two years for most appliances, was extended to between three and five years.

“We’ve eliminated unnecessary features and oversized capacities that consumers don’t use,” a Lotte Himart representative said. “The focus is on essentials, delivered at reasonable prices.”

Following the success of food-related PB lines, major supermarket and convenience store chains are expanding into cosmetics. Emart introduced “Glow:Up By Beyond,” an eight-product skincare line highlighting anti-wrinkle effects on Monday, in partnership with LG Household & Health Care. Each item is priced at 4,950 won ($3.48).

Convenience store chain 7-Eleven also entered the fashion market this month, launching two types of T-shirts under its fashion PB label “7-select.” Fashion platform Musinsa is extending its PB label “Musinsa Standard” to include not only men’s and women’s apparel, but also kids wear and sportswear.

Retailers are betting on PBs as a way to overcome weak consumer spending. As the domestic economy continues to stagnate, more shoppers are turning to PB goods that offer solid quality at lower prices.

Sales of Emart’s food PB “No Brand” surged from 23.4 billion won in 2015 to 1.39 trillion won last year. CU’s PB sales have also seen accelerating growth, with year-on-year increases of 16 percent in 2022, 17.6 percent in 2023, and 21.8 percent last year.

Ultra-low-cost PB lines like “catch series” (translated name) launched by convenience store chain CU are seeing especially strong growth. The number of products in the lineup, which includes a 990-won fish cake skewer and 1,900-won beer, rose 72 percent last year. Sales jumped by 116 percent.

“The 990-won fish cake skewer was created in response to feedback that the original version was too large,” said BGF Retail’s merchandising head Yoo Sun-woong. “We halved the portion size and cut the price, and customers responded positively. We’ll continue to reflect consumer tastes by launching more PB items.”

A customer selects an item from CU’s ultra-low-cost PB line, the ″catch series.″ [BGF RETAIL]

Private brands also offer better profit margins.

“If you sell the same volume of PB and branded products, PB yields more profit,” a retail industry source said. “Branded products leave you with only the retail margin, which fluctuates depending on the wholesale cost. But PB allows full control over production cost and pricing.”

PB lines are also evolving beyond just low prices. They now often have defined features or specific consumer targets.

Emart recently introduced “a humble day,” (translated name) a PB food line aimed at one- and two-person households. The line includes individually portioned items like one to two onions, 200 grams (0.44 lb.) of green onion, 80 grams of peeled garlic and four eggs — all priced at 990 won each — to ease storage concerns for smaller households.

Lotte Himart’s Plux brand also launched a 43-inch QLED TV with wheels, targeting small households that prioritize space efficiency.

“We aim to continue expanding our PB lineup so these products are recognized as new brands in their own right,” said Park Byung-yong, head of PB overseas sourcing at Lotte Himart.

BY CHOI HYUN-JU [[email protected]]