Private labels have become a powerful vertical for retail giants looking to maximise profits and capture more users. From Future Group to Shoppers Stop and Aditya Birla Group to new-age companies such as Amazon, Flipkart, Myntra, and Nykaa — most scaled up players have jumped on the bandwagon. And now Reliance Retail-owned Tira is going for the same playbook.
By creating their own popular brands, these online retailers have tapped into a lucrative market, transforming private labels into a cornerstone of their business strategies.
Tira, a direct rival to Nykaa, has announced the launch of two private labels in the past month. This move signals that the beauty and personal care marketplace is now focussing on scaling up, one year after its launch.
Last year, Reliance Retail entered the beauty and personal care (BPC) market with Tira, an omnichannel platform. Alongside launching the Tira app, the company also opened its flagship store in Mumbai. Since then, Reliance has expanded Tira’s offline presence to Delhi, Bengaluru, Hyderabad, Chennai, and Pune, bringing the total number of stores to ten across the country.
Reliance Retail’s digital and ecommerce initiatives have continued to grow significantly, contributing about 18% of revenue during FY24, according to the company’s Q4 earnings call. However, Tira was not specifically mentioned in the results, likely because it is still in its early stages.
Given that Tira has achieved significant brand recall and acquired a substantial customer base, analysts believe this is a timely and practical move to aim for higher margins.
Last month, Tira launched its first private label Tira Tools, a line of beauty accessories including Pro Makeup Brushes, Facial Rollers, and Beauty Sponges. The company said the Pro Artistry Kits from Tira Tools collection are designed for professional makeup artists and beauty lovers.
Earlier this month, Tira Beauty rolled out its new private label brand, Nails Our Way, marking its expansion into beauty offerings. The new line features premium nail colour and care products. On top of single products, the line also offers a complete manicure solution and convenient kits, including ‘French ‘Em Up’ and ‘Nailed It’.
Interestingly, Tira has not expanded into typical beauty products, a market already saturated by numerous FMCG brands, D2C startups, private labels from offline retailers, and online marketplaces.
The primary reason any platform, marketplace, or multi-brand outlet launches a private label is to attain better margins, according to Ashish Dhir, EVP (consumer and retail), 1Lattice said. By introducing a company-owned brand, businesses can secure improved profit margins since they don’t have to part with the revenue as is typically the case with third-party brands.
Experts believe that marketplaces can harvest data from sales volumes, customer demographics, preferences, and buying behaviour from third-party brands and channel them into private label plays.
Fuelled by a surge in personal grooming awareness propelled by fashion trends, the pervasive influence of social media, urbanisation, and rising disposable incomes, nailcare and beauty accessories markets are also growing alongside typical beauty products.
