It helps the retailer in a way that it does not require them to invest huge capital in manufacturing facility. It also provides contract manufacturers a stable source of demand.
The private label products are comparatively low in price than popular brands because of the above benefits and are placed in the retail stores among normal brands to increase their brand value.
Since retailers often get high margin on the private label they try to push it more by giving offers on these products and strategically placing the private label products near the high selling popular brands.
Myntra has their private brand called Roadster that they aggressively promote on their website.
Vishal Mega Mart has its own brand for many edible products like Tomato Sauce, Jams etc. and gives attractive offers like buy 1 get 1 etc. on them.
Example, Flipkart has its own private label for tablet, ebook reader called Digiflip.