INDIAN LUGGUAGE INDUSTRY

Brief Insight into Indian Luggage Industry

The luggage industry in India is currently undergoing a consolidation phase.
Competition in the sector is expected to intensify with the entry of foreign players like
Delsey of France. Companies with good research and development facilities are
expected to survive while others may end up as contract manufacturers for the bigger
players. The luggage market comprises of three segments namely the premium
segment with 15% of total market share, the popular segment and the standard
segment. Samsonite (International) and VIP are the dominant players in the premium
segment with a market share of 52% in the popular segment. V.I.P. industries and
Universal dominate the low-end standard segment.
The luggage market is dominated by the unorganized sector with 50% market
share. Northern and western India are the biggest markets in the country. V.I.P. and
Samsonite are focusing on developing their distribution networks. Both players are
also into exports. V.I.P.s export touched Rs.134 million in 1997-98 and is mainly
targeted at Gulf and West European Markets. Samsonite posted an export turnover of
Rs.150 million for the year ended December 98. Luggage manufacturers, particularly
V.I.P. have slashed prices following decline in prices of raw materials.
The organized sector (8%) is growing at a lesser pace when compared to the
unorganized sector (25%). The organized sector will have to face the reality that
players in this sector may become organized and come out with branded products
emerging as competitors to the existing players in the organized sector. The organized
sector has to be cautious of the developing grey market.
Indian Luggage Market
The Indian luggage market is worth nearly one thousand crores. A considerable
portion of the market is unorganized. The table below gives the distribution of the
market between the branded sector and the unbranded sector.

Market Size: Rs. 900 crores

Organized Sector

60%

Unorganized Sector

40%

The market for luggage in India can be subdivided into three segments, comprising
of the premium, regular and economy segment. The current growth rate of each of
these segments shows that the premium segment is the fastest growing one - five
times as fast as the economy segment, and two and a half times as fast as the regular
segment.
Growth Rates (Organized Sector)
Premium

25%

Regular

10%

Economy

5%

The organized sector is dominated at present by the Piramal fleet of companies - VIP
Industries and Aristocrat. Between them, they account for 85% of the organized
sector market. Their chief competitor is the Rs.41 crore Safari Industries, whose
share in the branded market is nearly 14%. The rest of the market is comprised of
other brands like Encore, Unilite, Genius, Club and Novex. But the entry of
Samsonite India, the 60:40 joint venture between Samsonite and the Bombay-based
Rs.28 crore Tainwala Chemicals, would change the whole scenario.

Organized Sector

Company

Market
share

VIP

70%

Aristocrat

15%

Safari

14%

Others

1%

Critical View of the Luggage Industry

The luggage Industry can be traced into a triangle with the MNC giant Samsonite
International trying to steal the limelight, the $50 million Indian giant VIP Industries
at one of the vertices and the triangle completed with the $120 million unorganized
sector at the third end. The other small companies find place somewhere in between.
This then is the Indian moulded luggage industry in a nutshell.

Going back in time, the history of Rs. 10 billion Indian moulded luggage industry can
be observed in two phases viz., the pre-1997 phase and the post-1997.
Pre-1997
During this period, the companies were more interested in volume sales rather than
satisfaction. The Indian market was dominated by both the small and big players. It
had still to witness the onslaught of the multinationals. American Tourister, currently
the worlds second largest luggage manufacturer was there on the scenes but, had to
retreat in 1985 due to poor sales.
Quality of the Indian luggage at that time was suited mostly for the low end mass
market and not for the premium end quality conscious customer. Innovations were
very few. People had got used to the old type of luggage which had a top, a bottom
and a lock to keep it intact. The manufacturing process concentrated more on volumes
than on quality. And surprisingly, nobody was complaining. The reason: lack of
quality awareness among the customers.

Then came the discounts war in the 90s. Customers were availing 50-60% discount
on the maximum retail prices. Even as the sales soared companies started to bleed. At
this juncture, the aggressive Piramal group took over Universal luggage and its brand
Aristocrat. This gave a body blow to all competition. The battlefield now comprised
VIP Industries, Universal as part of the Piramal group) and Safari to name a few until
the entry of world number one the $737 million Samsonite International, in late 1996.
Till then competition was restricted to sales. Service and customer satisfaction didnt
assume importance. In short, it was more of selling than marketing.
Pre-1997
During this period, the companies were more interested in volume sales rather than
satisfaction. The Indian market was dominated by both the small and big players. It
had still to witness the onslaught of the multinationals. American Tourister, currently
the worlds second largest luggage manufacturer was there on the scenes but, had to
retreat in 1985 due to poor sales.
Quality of the Indian luggage at that time was suited mostly for the low end mass
market and not for the premium end quality conscious customer. Innovations were
very few. People had got used to the old type of luggage which had a top, a bottom
and a lock to keep it intact. The manufacturing process concentrated more on volumes
than on quality. And surprisingly, nobody was complaining. The reason: lack of
quality awareness among the customers.
Then came the discounts war in the 90s. Customers were availing 50-60% discount
on the maximum retail prices. Even as the sales soared companies started to bleed. At
this juncture, the aggressive Piramal group took over Universal luggage and its brand
Aristocrat. This gave a body blow to all competition. The battlefield now comprised
VIP Industries, Universal as part of the Piramal group) and Safari to name a few until
the entry of world number one the $737 million Samsonite International, in late 1996.
Till then competition was restricted to sales. Service and customer satisfaction didnt
assume importance. In short, it was more of selling than marketing.
MAJOR PLAYERS IN THE ORGANIZED SECTOR

V.I.P.
Samsonite
Aristocrat
Safari
Giordano
Delsey
American Tourister
Rimowa
Kipling
Jansport
Blue & Blues
Jang
Fiorelli
Others