India is witnessing a travel boom but organised luggage firms are finding it difficult to reap the benefits of this surge due to a shift in customer base to new-age companies.
Legacy players such as Samsonite, VIP Industries and Safari are struggling with decline in sales & profit amid high discounting and promotional intensity across platforms as well as a growing preference for online and direct-to-consumer brands by consumers.
Trade and distribution sources that FE spoke to say that discounts on most luggage brands today are as high as 50-70%, both online and offline, as consumers seek durable and value-for-money products. New-age brands such as Mokobara, Nasher Miles, ICON and Uppercase among others are also upending the market with new designs, styles and innovations. Legacy players are therefore feeling the pinch as the `15,000-crore domestic luggage market undergoes a churn.
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A report by Crisil Ratings notes that organised luggage makers have about 40-45% share of the overall market in India. While the shift from unorganised to organised is happening swiftly, it is the newer brands that are gaining share as they remain agile and innovative.
The world’s largest luggage maker Samsonite, for instance, saw a 19.3% decline in India net sales in FY24 due to intensifying competition. It follows a January-December accounting year (see chart).
When announcing its FY24 results last week, Samsonite admitted that rivals, including VIP Industries and Safari were increasing the discounts on their brands to lure consumers in India. This was hurting its sales, especially, of American Tourister, a popular brand, whose sales was down 6% for the year.
If India, which is Samsonite’s second-largest market globally after China, was excluded, then the sales decline for American Tourister, was lower at 1.9% for FY24, Kyle Gendreau, CEO of Samsonite, said.
Neetu Kashiramka, MD, VIP Industries, while admitting that the firm was providing deep discounts on its soft luggage only, said it was e-commerce platforms such as Flipkart and Amazon that were giving huge discounts on their luggage portfolio.
“They (Amazon/Flipkart) are selling below their purchase price, which is a big problem.
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