Private brands which were once treated as inferior, substandard and poor man’s products are now proving to be the new game changers in the vibrant Indian retail sector, threatening to pose an existential threat to the various national brands. By adopting value pricing, better quality through upscaling, high safety standards, customized packaging, differentiation, and leveraging the brand equity of the retailers, they have significantly grown over the last decade across the world in general, and particularly in India. This sudden surge of private brands in India has necessitated a new strategy paradigm for the national brands which are increasingly facing a tough situation of eroding market share, dwindling profits and increased hostility with the retailers, who were once their loyal customers. This new strategic reality facing the national brand manufacturers is to find answers to pertinent questions like: Should they fight the expansion of private labels aggressively or adopt a defensive position? Should they risk the symbiotic relationship with retailers by taking aggressive measures against the private labels? and Should they partner with the big retailers and cash in on the market opportunity, or resort to discounting to stem the decline in market share? Therefore, the present paper intends to probe the emergence and surge of private brands in India, the reasons for their astounding success in India, and recommend strategies for the national brands to stem the onslaught of private brands in the vibrant Indian retail sector.

The growth of private brands in India is not as rapid, eventful and spectacular as in the other parts of the world, but is nothing short of an impressive surge in their market share over the last few years. Private brands which were once perceived as low, poor quality, substandard and poorly packaged products meant for the poorer sections of the society are now proving to be pots of gold for the retailers across the world in general, and India in particular. This sudden revolution of private brands in India is not brought by the singular groundbreaking event, but by the culmination of various factors in the vibrant Indian retail sector. Continuous improvement in the technology of production, packaging, improving brand image of the retailers, the variety seeking consumers, soaring inflation and uncertain economic conditions have forced the tide in favor of private brands which through continuous innovation and upscaling are posing a credible threat to the profitability and market share of the established national brands in the Indian retail sector.

On the other side, the slow but steady onslaught of the private brands has created a new strategic reality for the manufacturers of national brands, whose market share and profitability are jeopardized by the success of private brands. Moreover, the surge of private brands is forcing an uneasy relationship between the national brand manufacturers and profit-seeking retailers with their own array of private brands. The dilemma faced by the national brand manufacturers is two-fold; if the national brand manufacturers chose to aggressively tackle the growth of private brands they may risk the symbiotic relationship with the retailers, and if they choose to be passive spectators, their revenue, growth and profitability will be compromised. Therefore, the present paper intends to ascertain the growth and surge of private brands in India, the reasons for their success in the crowded Indian retail sector, and recommends strategies for the national brand manufacturers to tackle the growing threat of competition from the private brands in India.

Business Strategy Journal, Relationship, Between, Entrepreneurial, Orientation and Business Performance, A Review of Literature, Entrepreneurial Orientation, EO-performance relationship.