German retailer Metro said it hopes to strengthen its home brands to stay closer to market demand and enhance operation efficiency.
It said two of the three newly launched Metro owned brands are already available in its outlets on China's mainland. The retailer hopes sales of its home brands will account for 20 percent of the company's annual sales in China by 2020, Metro China Vice President Chen Jia said.
About 500 products under the Metro Chef and Metro Professional brands are currently available, and a further 1,100 types of merchandise will be introduced by the end of this year.
Currently, Metro's own brands account for about 14 percent of its overall sales, according to Chen, which still lags behind the 30 to 40 percent of sales contribution from developed markets such as Europe and America.
"We plan to diversify our house brand portfolio," Yang Weixin, general manager of Metro China's Own Brand Department said. "Nearly half of our customers are professional clients such as restaurants and canteen operators, whose purchasing demands differ from retail customers."
Metro said it has gained a deep understanding of hospitality customers’ needs and has thus worked with suppliers and contract manufacturers in designing their brand to meet customer needs.
Wang Sheng, director of the procurement cooperation department of China Chain Store & Franchise Association, noted that house brands play an important part in retailers' efforts to diversify their offerings to catch up with shifting demand.
Other strong home brands competing in China include Walmart's Great Value and RT Mart's home brands.