Executive Interviews: Interview with Nirmalya Kumar on Private Labels
April 2008 - By Dr. Nagendra V Chowdary

Nirmalya Kumar
Professor of marketing,
Faculty Director for Executive Education,
Director of Centre for Marketing,
Co-Director of Aditya Birla India Centre at London Business School.

At some stage, India will be cut out of the price game. Then you have to be a global IT company like Infosys and Wipro, anywhere in the world you have to be transnational. So you won't be an Indian IT company, you will have to be an IT company out of India but a multinational company.

• Two years back fortune came out with the list of 10 companies that would be there in 2055, in that, the first company happened to be Amazon.com eBay, a combination, and in the rest of the article they talked about the future of shopping in the next 20 to 50 years. In such scenarios what happens to the retailers with so much of physical capacity?
  There is always a road for physical retailing, but online retailing has the share in the total retail pie. There is no doubt that it will explore, but there is also a role for social aspect of retailing, there is also a role for retailing as an amusement and entertainment. They will co exist. It's just like there will be always a role for TV advertising and a role for print advertising. But print and TV advertising are yesteryears news. In the Western world TV and print media is a dying media. But that doesn'tmean that they are completely wiped out, they will always be there. But, the share of the total media expenditure is going to decline very dramatically over the next 10 years. Because gaming, mobile phones and Internet has taken off.

• Do you find any lawsuit filed against private label because they are breaking the rules of the game?
  When somebody files on you, that is how you would know you are successful. Nobody files a lawsuit against a loser. It's like Mother Teresa saying, "If you become successful you make some true enemies and some false friends, be successful anyway". Being successful means having true enemies and false friends that's the definition of being successful.

• 3 or 4 categories in India, where there is enough scope for organized efforts as well as private labels.
  Indian retailer's private label can grow dramatically in all the kind of cereals and basic items like milk, sugar, atta and rice. In these basic categories there is a lot of purchases. Those are the first categories where you will have dramatic private label share.

• Have you visited any of the Indian retail? Like RPG, Reliance Fresh, Big Bazaar.
  Yes, most of them. RPG, I know them very well. Reliance Fresh. I have not visited but I have visited pantaloons. I see private label already becoming quite big there. Big Bazaar I visited once.

  Private label are starting there, because, number one the retailers want to control their own destiny. Two, the margins are very primary, having private labels keeps the manufacturer brands honest. So there is no reason for them not to have private labels.

• According to you a time might come, where people might start believing more of private label than manufacturer brands as there is somebody I can talk to?
  No, it's a separate thing. Therewill be always some people. There will be stage in India where everybody in India will buy at least one private label. But there will always be a segment that buys more private label and others buy more brands. There will be always both segments.

1. Private Labels Case Study
2. ICMR Case Collection
3. Case Study Volumes