Great piece. Additional challenge or context to highlight more is that the B2B private labels may lack significant brand equity and trust with consumers who ultimately take products off the shelf. Learning from Retailing, if Tesco makes its own Shampoo to replace P&G Head & Shoulders, the Tesco brand is strong, high awareness and trust built over years with consumers who will pick up the Tesco Shampoo placed side by side on shelf with Head & Shoulders at a significant lower price. The B2B e commerce players have not yet built such consumer brand equity having not had direct consumer relationship like a Tesco. Recommendation by retailers might moderate but may not always be enough. A factor to consider on the journey. Thank you for deep strategy insight writeups
I thought about this a bit. And I came away with another question; if the prices of private labels are competitive in some sections, will they at least get some early believers?
We saw this a bit with some of the new cola players a few years ago.
Although, on another level, I don't think a private label wants to also get involved in a price war.
A lot to think about as the private labels continue to hit the shelves
Good questions. The less brand equity and established consumer trust, the more price would need to be discounted from reference brands to stimulate trials; may be moderated in some way by the trader / retailer recommendation (where trusted by consumers?) with the right stimulated incentives and motivation for the trader). Even Bigi-Cola had to invest in some form of brand equity. A Bokku Mart private label may not need to (as much) having built retail brand equity and trust with consumers like a Tesco.
How far the private label competitive pricing can go may be moderated by the original objective of margin recovery for the e commerce players. These may be some of the levers for e commerce players to consider & optimize if they go private label route. Also very true that triggering acute price war is not in anyone’s interest- more so the e commerce players who may not have capital to burn..
I don’t see you as a journalist. I think you are one of the most brilliant brains in the ecosystem. You understand the fine grains as to what truly works and what doesn’t.
You would make a fine venture capitalist. Because not only will you understand the economics of business models, you would be able to work with founders to fine tune their models into scale. I believe that the Nigerian VC space lacks someone like you.
Great piece. Additional challenge or context to highlight more is that the B2B private labels may lack significant brand equity and trust with consumers who ultimately take products off the shelf. Learning from Retailing, if Tesco makes its own Shampoo to replace P&G Head & Shoulders, the Tesco brand is strong, high awareness and trust built over years with consumers who will pick up the Tesco Shampoo placed side by side on shelf with Head & Shoulders at a significant lower price. The B2B e commerce players have not yet built such consumer brand equity having not had direct consumer relationship like a Tesco. Recommendation by retailers might moderate but may not always be enough. A factor to consider on the journey. Thank you for deep strategy insight writeups
I thought about this a bit. And I came away with another question; if the prices of private labels are competitive in some sections, will they at least get some early believers?
We saw this a bit with some of the new cola players a few years ago.
Although, on another level, I don't think a private label wants to also get involved in a price war.
A lot to think about as the private labels continue to hit the shelves
Good questions. The less brand equity and established consumer trust, the more price would need to be discounted from reference brands to stimulate trials; may be moderated in some way by the trader / retailer recommendation (where trusted by consumers?) with the right stimulated incentives and motivation for the trader). Even Bigi-Cola had to invest in some form of brand equity. A Bokku Mart private label may not need to (as much) having built retail brand equity and trust with consumers like a Tesco.
How far the private label competitive pricing can go may be moderated by the original objective of margin recovery for the e commerce players. These may be some of the levers for e commerce players to consider & optimize if they go private label route. Also very true that triggering acute price war is not in anyone’s interest- more so the e commerce players who may not have capital to burn..
I don’t see you as a journalist. I think you are one of the most brilliant brains in the ecosystem. You understand the fine grains as to what truly works and what doesn’t.
You would make a fine venture capitalist. Because not only will you understand the economics of business models, you would be able to work with founders to fine tune their models into scale. I believe that the Nigerian VC space lacks someone like you.
You're far too kind. Although I strongly suspect that it's way easier to sit on my stool and analyse than to put my money where my mouth is 😂