Private-label products expand presence in S. Korean market: report
SEJONG-- Private-label products distributed by large retailers have experienced sharp growth over recent years in the South Korean market on rising consumer demand for cheaper price tags, a report said Wednesday.
The market of such "store brand" products reached 9.3 trillion won in 2013, up from 3.6 trillion won tallied in 2008, according to the report by the state-run Korea Development Institute (KDI).
Industry leaders of Lotte, E-mart and Home Plus earned some 20 percent of their sales from their private brand goods, while convenience stores like GS 25, Seven Eleven and CU marked 28.8 percent.
Retailers have extended private branding in a way to reduce costs as they outsource such private-label products without running large manufacturing facilities or a design team.
But the KDI report noted that such growth in private brands failed to trickle down to smaller manufacturers which supplied private brand products to retail giants.
In a separate survey, nearly 10 percent of suppliers said that they have experienced unfair business practices from large retailers, while they also have to pay a higher distribution margin.
Source: Yonhap News Agency