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Private Label Brands Getting Popular
http://www.koreatimes.co.kr/www/news/biz/2008/10/123_33218.html
By Jane Han
Staff Reporter

Almost none of the everyday necessities in Lee Joo-hyun's house are recognizable by their names at first glance. That's because unfamiliar brands like E-Plus and Wiselect take the place of popular names Tide, Kleenex and Pantene Pro-V in her kitchen and bathroom. Even her two-year-old wears an E-plus branded diaper over Huggies.

``Generic brands are just as well-made as national brands,'' said the 32-year-old homemaker, who frequently shops at Lotte Mart and E-Mart, two of the nation's largest discount chains.

Lotte offers 3,700 goods under its private label (PL) Wiselect, while E-Mart sells more than 8,000 products under its signature brand E-Plus. From toothpaste, laundry detergent, milk, pork to even make-up, these generic products offer prices that are 25 to 30 percent cheaper than national brands.

``I'm thankful that we have a cheaper option during times like these,'' said Lee, who claims that she saves about 200,000 won a month just by choosing generics.

Retailers say that consumers' response to PLs have improved much more just over the recent weeks, as money-short shoppers start to tighten their purse strings. Now, about 15-20 percent of their revenue, on average, comes from selling signature products.

``Before, customers used to complain that generics fall behind in quality, but nowadays, we get more feedback, asking us to create more varieties of PL,'' said Kim Hyun-ah, a spokeswoman of Hanaromart, another popular discount store.

Moved by the positive response, retailers say that they are going to return the favor by expanding their PL lines into new areas, such as lingerie and furniture.

Homeplus CEO Lee Seung-han told reporters last month that the company would increase its revenue from PL to 30 percent by introducing cheaper and better quality generics. E-Mart and Lotte Mart are also following suit.

``Korean retailers are still much behind PL marketing compared to those in advanced economies like the U.S. and Europe,'' said Kim.

According to the Korea Consumer Agency, Switzerland offers the most number of generic items, followed by Germany, England and Spain.

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