Core Viewpoint - The increase in self-owned products by leading retailers may not pose a problem, but if the entire industry follows suit in pursuit of maximum profits, it could create an unfavorable ecosystem for brand manufacturers [1][3]. Group 1: Retail Trends - Retailers are increasing the proportion of self-owned products, with Su Ning's 2024 report indicating that self-owned product sales accounted for 22.6% of total sales, boosting gross margin [5]. - The trend of retailers developing private brands is not new, having started in the late 1970s in Europe, where private brands accounted for about 20% of retail sales, rising to over 40% by 2000 [5]. - In contrast, the share of private brands in China's top 100 supermarket companies was only 5% in 2022, indicating a slower adoption compared to Western markets [5]. Group 2: Market Dynamics - The rise of self-owned brands in China is influenced by the lack of strong brand power among retailers, with the top 20 retailers in the U.S. holding 60% market share, while the top 100 in China hold less than 9% [6]. - The shift from a supply-driven market to a consumer-driven market in China means that retailers are now trying to capture differentiated consumer demands, which poses challenges for brand manufacturers [8]. Group 3: Brand Manufacturer Strategies - Brand manufacturers face limited choices: some hesitate to collaborate with retailers for fear of becoming mere OEMs, while others accept the partnership for stable orders [9]. - Key considerations for brand manufacturers when deciding to collaborate with retailers include excess production capacity, brand value protection, and potential competition with retailer's self-owned products [9]. - The actions of retailers in developing self-owned brands are not solely aimed at replacing brand manufacturers but are also driven by the pursuit of higher profits and market validation [10][11].

Core Insights - The article discusses the evolution and implications of private brands in the retail sector, highlighting the balance between brand loyalty and price sensitivity among consumers [1][2][3] Group 1: Retail Trends - Retailers are increasingly focusing on private brands to enhance profit margins, with examples like Suning and Yonghui aiming for significant increases in private brand sales [3][4] - The share of private brands in the Chinese retail market remains low compared to Western markets, with only 5% of sales from private brands among the top 100 supermarkets in China as of 2022 [3][4] Group 2: Market Dynamics - The competitive landscape in China is fragmented, with the top 100 retailers holding less than 9% market share, which contrasts sharply with the U.S. market where the top 20 retailers command 60% [4] - The rise of private brands may lead to a "dark moment" for brand manufacturers if the entire industry shifts towards maximizing private brand offerings [2][8] Group 3: Brand and Retailer Relationships - Brand manufacturers face critical decisions regarding partnerships with retailers, weighing factors such as production capacity, brand value protection, and competition with retailer private brands [7][8] - Retailers' private brands are often seen as a means to negotiate better terms with brand manufacturers, creating a complex dynamic in the market [7][8] Group 4: Consumer Behavior - The shift towards private brands reflects changing consumer preferences, with price sensitivity becoming more pronounced as low-cost private brands proliferate [8][9] - The decline in slotting fees indicates improved selection capabilities among retailers, suggesting a more competitive environment for brand manufacturers [9]