One of the largest electronics retailers, the DNS network plans to receive more than 60% of its revenue by 2027 from sales of private label products such as Dexp, Aceline, as well as new brands in all electronics categories. The company will reward employees for their advancement. In this regard, some DNS partners have already begun to reduce their presence in the chain’s stores. A bet on private labels can be successful, analysts admit; against the backdrop of the departure of familiar popular brands, consumers are paying more and more attention to new brands.
The Russian retailer DNS plans to provide more than 60% of its revenue by 2027 (at the end of 2022 it amounted to 597 billion rubles) through its own brands, an interlocutor among electronics manufacturers told Kommersant, citing a presentation for partners. “It is planned to create a number of brands in the middle segment and slightly above average (B and B+),” he clarified.
Three other Kommersant interlocutors among the top management of equipment manufacturers, including Kuppersberg CEO Dmitry Shashkin, also know about DNS’s plans to transfer 60% of revenue to its own brands by 2027. According to one of them, the retailer will introduce its own brands in almost all segments, including laptops, home appliances, peripheral equipment and others. Co-owner and president of the DNS group of companies Dmitry Alekseev declined to comment.
According to SPARK-Interfax, DNS Retail LLC was registered in November 2010. It belongs to DNS Group LLC, 44.64% of which belongs to Yuri Karptsov, 44.35% to Dmitry Alekseev, the remaining shares are divided between Konstantin Bogdanenko (3.89%), Sergei Meshchanyuk (2.78%), Olga Komoza (2.32%), etc. The revenue of DNS Retail LLC in 2022 amounted to 597 billion rubles, net profit – 37.6 billion rubles. DNS owns the trademarks Aceline (TVs, fans, freezers, etc.), Dexp (refrigerators, laptops, TVs, etc.), Eigen (washing machines, refrigerators, etc.) and a number of others. In total, according to SPARK-Interfax, 63 trademarks have been registered for the company, and applications have been submitted for another five.
A Kommersant source among foreign electronics manufacturers, citing GFK data, says that from the beginning of the year to November, DNS occupied 30% of the market for sales of equipment and electronics in monetary terms. “DNS, having an extensive network and relative autonomy in terms of supplies, can afford to shift its focus to its own brands without significant risks,” says Kommersant’s interlocutor among suppliers. In his opinion, due to the departure of well-known brands, buyers “began to pay attention to new vendors more often.” All new DNS products, Kommersant’s source claims, will be produced in China. Kommersant’s interlocutor, familiar with the company’s plans, claims that in the strategy it announced bonuses to staff for selling its own brands, as opposed to selling goods from other vendors.
Representative of the Association of Trading Companies and Manufacturers of Electrical Household and Computer Equipment RATEK Anton Guskov noted that for many retailers the share of private labels in sales has increased significantly over the past two years. Thus, in the television segment, private labels occupied more than 20% of the market at the beginning of the year (see Kommersant on March 20). “This category has very significant development potential,” says Mr. Guskov. M.Video-Eldorado confirmed that in its networks the share of “exclusively presented assortment”, which includes private labels, has increased. In the first half of the year, such goods accounted for 8% of turnover, and in the third – already 11.5%.
However, as a result, networks may lose a number of suppliers. Thus, Mr. Shashkin says that his brand has already reduced shipments of products to the retailer’s stores. “Other chains tried to implement similar schemes at one time, but without success,” explained the top manager. “This strategy assumes that the store will place special emphasis on its goods. This turns off buyers and other vendors, so we decided to reduce our DNS presence.”