Private label push falters in Southeast Asia despite 71% consumer adoption

Retailers must start building them as strategic brand systems.

A striking disconnect is widening across Southeast Asian retail, where private labels capture just 4.2% of food and drink sales despite 71% of consumers saying they buy them.

"The consumer is not the problem," Nuno Brito Afonso, president at Daymon Worldwide, Inc., said. "The problem is actually on our side, on the shelf side."

Speaking at the PLX Asia Industry Leadership Summit 2026 held in Bangkok, Thailand, he challenged retailers to stop treating private labels as a pricing instrument and start building them as strategic brand systems.

He noted that the global food and drink private label market is valued at $465b in 2026, yet the region only captures roughly 6% of that figure — despite housing the world's fastest-growing middle class.

Moreover, he said that the regional grocery market stands at approximately $200b, with e-commerce within it growing at 11% — faster than the overall market.

“Yet the region's private label penetration remains a fraction of the 38% average seen across Europe,” he added.

Vietnam, as Afonso observed, offers the sharpest illustration of the paradox as 79% of consumers there say they prefer private brands, but value share is 2.4%.

On why consumers buy, he said that 61% cite availability, and 44% cite variety as their reasons for choosing private label.

Afonso emphasised that distinction matters because the historical framing of private label as a recessionary fallback has long distorted retailer strategy.

“Thirty years of data show that private label penetration does not retreat when economic pressures ease,” he said. "It's not about price anymore, it's about value.”

Afonso argued that retailers must reposition private brands into what he described as a control mechanism — governing price architecture, margin management, quality standards, and the pace of category innovation.

He said that retailers must define the brand's role and purpose; align it with the company's broader commercial strategy; apply a category management lens for local assortment relevance; and build a disciplined new product development process connecting brand purpose to quality standards.

"Private brands are not about filling shelves with products," Afonso said. "Private brands are about capturing value and delivering solutions to consumers through a system that competitors cannot replicate."