With travel on everyone’s mind these days, carrying the right luggage is part of the checklist. And to ride the wave, VIP Industries has gone all out with trendy, colourful bags and suitcases launched under its various brands recently. From transforming a luggage company to a lifestyle one, Radhika Piramal, managing director, VIP Industries, has brought in numerous changes to make the company youthful and aspirational ever since she took charge in 2010. In an interview with BrandWagon’s Meghna Sharma,
Piramal talks about how VIP has defended its national leadership against global multinationals. Excerpts:
What changes are you bringing in to double VIP’s revenue of `2000 crore in the next five years and make the company youthful and aspirational?
We have transformed our products across all brands. Firstly, we revitalised VIP, our flagship brand, by launching lightweight and strong polycarbonate products with four wheels for easy wheeling.
Our new hard luggage ranges now offer all the convenience of soft luggage combined with the security of hard luggage. 2011 onwards, we re-launched and re-positioned Skybags from a brand which was known in the 1990s as soft luggage for air travellers, to a contemporary brand for youth, offering all types of bags, much beyond luggage, to backpacks, gym bags and sporty gear. In 2012, we launched Carlton, a British brand we had bought in 2004 but not launched in India. Carlton is aimed at the business traveller who is a frequent flyer.
In 2013, we launched Caprese — the first time our company expanded from luggage to handbags. Our goal is to make Caprese as popular in handbags as VIP and Skybags are in the luggage category.
How have the company’s new brand endorsers — actors Varun Dhawan and Alia Bhatt — helped connect with the TG?
Varun and Alia are confident, stylish, energetic and have a great connect with 15-35 year-olds who drive the latest consumption trends in India. Skybags as a brand is all about stylish bags for the youth. The new Skybags television commercial showcasing Varun Dhawan chasing a coach through the streets of Europe has been widely appreciated by the marketing industry. Skybags sales are growing 70% year-on-year, making it the fastest growing luggage brand in India. Caprese brings to the modern Indian woman stylish European fashion at an affordable price. The brand is brought to life by Alia who is, like the brand, very young and stylish.
VIP has expanded from long-haul luggage to women’s handbags, office bags and backpacks. What insights have driven this?
The primary business insight is that the purchases of handbags, office bags and backpacks are much more frequent (often annually) than the purchases of luggage (which is only purchased once every three-four years). This means that the handbag, office bag and backpack market is much larger than the luggage market, even though branded participation in this market is currently low. There is a lot of room for expansion. These product categories don’t have any leading national brands and most consumers buy local products at low prices which are correspondingly of low quality.
Our goal is to expand the branded penetration of these product categories, by offering consumers great designs and quality at affordable prices. To achieve our goal we design all our bags in-house and our designs remain strictly exclusive to our brands. We launch several exciting new collections every six months (autumn-winter and spring-summer), following the international fashion calendar.
According to you, what were the reasons that though VIP had a 70% share in the luggage market in the late ‘90s and early 2000, it failed to retain its position thereafter?
In 1991, the Indian economy was opened to the world. Consumers in general tend to like choice and change, so a 70% market share is not sustainable for any brand in an open economy with no regulatory barriers to entry. VIP’s market share today is above 50%.
VIP is one of the rare consumer brands in India which has successfully defended its national leadership against global multinationals, despite their presence in India for almost 20 years. The reason for our continued market leadership is our excellent product quality which has kept our brand relevant and popular to the discerning Indian consumer. Also, with all our brands combined, we have the widest range in India, offering the best in class products across premium, mid-price and value segments. No other competitor matches our range.
What marketing initiatives have been undertaken to beat the competition?
The most important aspect of marketing for our company is getting the right product to the market, as a great product is what the consumer is genuinely seeking. We continuously invest in new product development, launching over 300 new product ranges per year. VIP has just launched a new series of feature-laden backpacks designed for the office, including protection for laptops and comfortable shoulder straps for heavy use. Caprese’s new ‘Spring Summer 2016’ collection, featuring the latest trends from Milan, is going to be launched this month. We also invest in ongoing advertising campaigns, every season. We will air more new advertisements a few months from now, just before the summer holidays, which is the main buying season for luggage.