‘In India, crazily expensive light luggage sells like cookies’

US luggage maker Samsonite Corporation marks India as its third-largest market, and one of the fastest growing markets, for the company, contributing 6% to global turnover. As Indians move away from unbranded luggage and travel frequently, Samsonite Asia Pacific and Middle East president Ramesh Tainwala believes the Next Big Opportunity is just waiting to be harnessed. In this interview with Shailaja Sharma, Tainwala says Samsonite’s Asia business is $1.5 billion-strong already, contributing 35% to global turnover, and it is only a matter of time before India assumes leadership position along with China.

How has the growth at Samsonite been?
It’s been in a honeymoon period in the last six years and it’s continuing. It is an unbelievable experience in India for Samsonite. When we look at studying how the GDP evolves, the per capita evolves, or how the consumer starts to spend on discretionary products, India has defied those logics and created its own dynamics. Travel industry grows faster than so many other industries. Indians’ fondness for travel is much more deep-rooted because we have always lived in our villages and worked in cities. So, the concept of traveling is almost in our genes, it is very inherent in India. Samsonite is getting benefited by more and more consumers traveling and people traveling much more frequently. Our value brand American Tourister under Samsonite has grown over 100% in the last three years because the unorganised market is slowly evaporating. Everybody wants a label of their products. India is one of our fastest growing markets. We see a similar thing in China.

How are you innovating the luggage market?
The consumer is obsessed by ‘lightweight’. The lighter the bag the more he likes it, even though it is expensive. We have a bag called Cosmolite with Curve technology which is very light, crazily expensive, it costs Rs25,000, but sells like cookies.  Weight is very important as consumers do not want to carry heavier bags to airports to avoid paying for excess baggage. Second is the size of the airports that brings in the aspect of wheeling comfort. So we start investing disproportionate size of our technological innovation in Samsonite with focus on wheeling comfort. Airports all over the world are becoming bigger and bigger. As a result, you have to wheel your bag for a longer time. The third important thing is that people start to take luggage as part of their lifestyle.

What is the fastest growing price point?
In India, the migration of the unorganised segment into the organised space is fueling the demand. People who earlier bought unbranded luggage, are buying branded luggage that are priced at 25% more than the price of unbranded luggage. But if you are charging double or triple, then they will not pay. So, the most buoyant market in India is the price bracket of Rs800-1, 500. If you look at the last couple of years, more wealth is getting created in tier-4, tier-5 towns and people there are aspiring to move away from unbranded products.

How have you seen the luggage category evolve? What segments are emerging?
Every segment is evolving. Every human being carries a bag from home to work, education or  recreation. And every bag that you make today should be equipped to carry a laptop or a tablet. The sell-out product in our Lavie (under company Planet Retail) range of handbags is a bag that is laptop-compatible; it is flying off-the-shelves because women do not want to carry a handbag and a laptop bag separately.  Things are changing; nobody wants to carry a plastic bag in their hands. Even maids carry handbags and watchmen carry a Messenger bag. If you can make the bag reachable to him in terms of the price point and the point of place, he is willing to buy. But you have to think like an FMCG company in trying to sell them at right price points. Then, they will buy.

How is the retail business growing?
We have started a multi-brand bag store concept Bagzone with one store last year. Today, we have 18 stores already.  We are quite excited about Bagzone, it offers a wider offering and has a higher stock density. As a result, you have higher sales throughput.  In three years, we will have 100 Bagzone stores. We will not limit ourselves to tier-1 cities as planned earlier. About four weeks back, we tested with the first Bagzone store at Allahabad, and we are very encouraged by the result. This opens avenue for Bagzone in small towns. We will grow Samsonite stores too.