Remember the VIP suitcase, carried by families in the early ’90s for their official and even during family vacations. With time, that suitcase has gone through an ocean of change and so has the luggage industry with the entry of many new players including direct-to-consumer (D2C) brands such as Mokobara, Nappa Dori, Lavie, Uppercase, and Nasher Miles, among others. “The luggage market in India is substantial, reflecting the widespread peripatetic attitude of its people. With the advent of direct-to-consumer (D2C) brands, there is a significant market waiting to be tapped into. This shift allows for better deals and facilitates direct orders, potentially impacting brands reliant on traditional retail channels like malls, shops, and dedicated travel equipment outlets. However, I don’t foresee a drastic decline. Instead, we may witness established brands like American Tourister offering competitive discounts to maintain their market presence, as the tactile shopping experience remains relevant,” Harish Bijoor, business and brand strategy specialist and founder, Harish Bijoor Consults Inc, told BrandWagon Online.
The revenue generated in the luggage and bags market in India is expected to reach $15.04 billion in 2024. It is expected that the market will grow at a rate of 5.21% (CAGR 2024-2028).
When compared globally, the United States is expected to generate the highest revenue in this segment at $29,570 million in 2024. In terms of per capita revenue, each person in India is expected to generate $10.43 in 2024. Looking ahead, it is projected that the non-luxury segment will account for 87% of the sales.
Queries sent to Mokobara, Safari, American Tourister, and Wildcraft remained unanswered till the time of publishing this story.
The pool!
With a deluge of D2C brands like Mokobara, Wildcraft, Lavie, and Nappa Dori entering the market, established players such as American Tourister, VIP Industries, and Safari have finally got competition. Yet experts believe that there is enough room for everyone to coexist. . “Striving to create a lifestyle difference for the ever-evolving needs of customers, we have witnessed the emergence of direct-to-consumer (D2C) brands, offering a pool of choices for consumers, especially targeting young aspirational Indians. Also, with the expansion of the travel industry, there has been a rise in demand for luggage products. With the rising competition, there is enough room for traditional and D2C brands to coexist, a similar trend seen in other industry sectors,” Kapil Makhija, MD and CEO, Unicommerce, told BrandWagon Online.
Interestingly, established brands remain unfazed by the entry of new premium D2C companies, as they claim there is room for everyone. Not to mention, the market remains dominated by the old companies. “Luggage has been a high heat category in recent years with many new entrants leveraging low entry barriers. The branded luggage industry continues to remain oligopolistic with over 90% share accounted by the top three players. While the new players are challenger brands, none are currently at a scale to cause any meaningful dent to the market share of the top three players,” Neetu Kashiramka, managing director, VIP Industries, said.
Meanwhile, the young entrants claim that besides creating differentiated products, which can meet a certain demand, there has been a focus on marketing on digital. “We’ve implemented a multi-faceted approach. This includes investing heavily in product innovation to differentiate ourselves, offering bespoke services and options in colours as well as leather material, leveraging strategic social media collaborations for increased visibility, and enhancing our online and offline presence through targeted marketing campaigns,” Tabby Bhatia, founder, Brune & Bareskin, said.
Moreover, VIP Industries claims to have allocated over 70% of its advertisement expenditure to digital. According to the company, its advertising strategy primarily resides in promoting new products and periodic brand activations, rather than prioritising customer acquisition.
More than price!
Even though a high price point is often associated with tags of either luxury or premium, in the case of luggage affordability along with durability plays a key role. For instance, the cost of a trolly of size 58 cm by American Tourister costs Rs 4,999 while the cost of a trolly of the same size by Mokobara is Rs 5,999. The reason behind the difference in cost is primarily due to varied features. For instance, the type of material being used or additional features such as extra or separate space. While, medium-sized luggage bags, that is 69 cm are typically priced between Rs 5,000 to Rs 10,000. The cost of these bags goes upto as high as Rs 1 lakh and above in the case of luxury segments.
Every customer has their own choice. Customers normally make a purchase based on pricing, durability and also the design. The price is a major factor for some customers and others look at brand and durability. The difference in price does not matter beyond a point as customer preferences or based on multiple factors, the customer normally likes to go for brands with product durability and also on availability of retail outlets and online delivery efficiency. In the present context the difference in pricing is not significant say for example samsonite which is a high end brand. Another factor which plays a pivotal role in choosing is the space in the compartments. It would be appropriate to state that pricing is a marginal factor but other factors determine customer choice,” S Ravi, founder, Ravi Rajan & Co, said.
Due to the intense competition in the space, industry experts believe that it is quite essential for brands to acquire new customers. Not to mention, with this being a heavy investment product, typically a customer returns to purchase a new bag either after the old product is damaged or when in need to buy a new one. Companies claim that users are retained through loyalty programmes, brand experience, or omnichannel marketing. As a result, brands claim to spend a good chunk on marketing. “Our advertising spend has seen a gradual increase, with a notable shift towards digital channels to capitalise on evolving consumer behaviour. While the cost of customer acquisition in the luggage industry can be considerable, we offset this by emphasising our products’ durability and lifetime value. Our goal is to not only acquire new customers but also foster long-term loyalty through quality and customer satisfaction. We’re also investing in targeted retention strategies to encourage repeat business and maximise profitability over time,” Bhatia highlighted.
Online vs offline
While the touch and feel factor once played a role in the purchase of products, earlier, with the rise of e-commerce that is no longer a constraint. “Bringing in ample opportunity for companies to explore the luggage segment, e-commerce has become a crucial aspect supporting the entry of new-age companies into the industry. Omnichannel retailing is yet another tangent that has attracted brands across the segment. We work with multiple traditional and new-age D2C brands in this segment and have observed traditional brands deploying technology to build their digital presence, while D2C brands leverage technology to extend their offerings across physical locations,” Makhija opined.
Despite entering late in the online space, VIP claims that the segment accounts for 20% of revenue. This is slightly lower than the industry average of 25%. “In terms of distribution, VIP is known for its widespread distribution network with the presence of over 13,000 points of sales across 1,300 towns. Going forward our strategy is to leverage our existing distribution network and attain leadership in ecommerce,” Kashiramka mentioned.