Ticket to growth

Updated: Nov 24 2005, 05:30am hrs
The Rs 1,500-crore luggage market in India seems to be finally on the move. While an overwhelming 60% of the market is still unorganised, the Rs 600-crore organised segment is gearing itself for growth. Having divided the category into the premium, popular and economy segments, and then between hard and soft luggage, marketers are looking to break the pie even further.

First Samsonite India relaunched Sammies, its range of travel luggage for pre-schoolers and children up to eight years. Then VIP Industries introduced Aura, a range of luggage designed specially for the chic, independent, woman of today. This was followed up with a business collection called Matrix. The company will launch the Carlton brand in the next two months. For the record, the Rs 400-crore VIP Industries bought over the worlds fourth largest moulded luggage manufacturer, the UK-based Carlton International, which was in a state of insolvency, earlier this year.

Luggage is fast becoming a lifestyle product and consumers want their luggage to be in line with their personality. This is leading to multiple purchase of luggage as well fast retirement of luggage, resulting in growth, says Sunil Kataria, vice-president, marketing, Blow Plast, the marketing arm of VIP Industries.

In other words, what has driven growth is not just the relentless effort of marketers but the attitude of people towards this category as a whole. Earlier luggage was all about durability. People preferred luggage that would last long and was theft proof. Now they prefer something that is easy to carry, trendy and convenient. Such as upright luggage or strolleys that can be wheeled.

What seems to have shaken the luggage market in recent years is the Chinese invasion of soft luggage. Suddenly, prices went downhill and what was available for Rs 5,000 could be bought for as low as Rs 300.

To survive in such a scenario, innovation has become key. People are no longer looking at luggage as a functional product. Its not just a box, says EP Suresh Menon, director, sales and marketing, Samsonite India. People now also want fashion and convenience in the product they buy. Samsonite launched its new business collection three years back. This included cases for laptops etc. It is also planning to enter new segmentsincluding a range for childcare and mothers soon.

VIP Industries shares the view. Segmentation is a key for us to grow, says Kataria. We have recently launched a casual youth brand called Impulse.

While it will take time for similar segmentation to take flight, right now, it is soft luggage that is driving growth across segments. Hard luggage, which still dominates the market in terms of the number of units sold, is growing at a sluggish 3-5%. Soft luggage, on the other hand, has been growing at 30-35% over the last two years.

Thanks to this segment, the market as a whole is growing at a healthy 15-20% now, after trudging along at a slow 8-10% for years. We are focusing a lot on the soft luggage segment especially at both the premium and the economy ends. The popular segment is being catered to by the VIP brand and in the economy segment we have been investing in the Alfa brand, says VIP.

The growth of luggage market is intrinsically linked to the boom in the travel industry. Explains Blow Plasts Kataria, With increasing disposable incomes people are spending more on the leisure segment. Low cost airlines will obviously aid in greater domestic travel and have a positive impact on luggage industry.

The luggage industry as a whole and soft, easy-to-lift or carry segment in particular given that in low-cost airlines you dont have the luxury of having an airline staff lugging the burden for you.

While it is the economy segment which is showing maximum growth, players like VIP have clearly set their eyes on the premium segment. Currently, premium luggage contributes about 45-50% to its turnover. This, it would like to increase to 75-80% in the coming years. The company is investing Rs 4-5 crore in rolling out exclusive showrooms for its premium brands Delsey and Carlton.

In the last two months we have rescripted the direction VIP would take and launched a new brand identity, new premium product portfolios, new communication and a new retail look , says Kataria.VIP is also expanding its retail distribution and will be opening another 40 retail stores (apart from 75 stores currently) by the end of the year.

Delsey has been doing pretty well in te last two years and we have established a serious presence in the super premium segment already, claims Kataria. With the launch of Carlton we will have two brands with differentiated positionings in the super premium segment, thus strengthening our position further.

While Samsonite has no designs on the popular or the economy segmentsMenon says theres no money to be made at that price pointVIP launched Alfa Soft to counter the march of the unorganised market. The economy consumer should have a choice of buying a quality branded product at a reasonable rate, declares Kataria.