BRANDED LUGGAGE

RETAIL

www.themegallery.com

BY:
MANIK ARORA
MFM-1
 OBJECTIVES
• To study the luggage industry and its nuances in the
international scenario.

• To study and analyse Indian luggage industry in the

retail context.

• To study the feasibility of setting up of a branded

retail outlet for luggage in Patna.
RESEARCH METHODOLOGY:
Secondary Research- The secondary data and theoretical
information regarding the luggage retailing and market would
be conducted using reports, trade journals and internet.

Primary Research- Questionnaire survey to understand the

scope of opening a branded retail store for luggage would be
done with customers and retailers.

Sample size - 100

Sampling method – convenience & judgmental
LUGGAGE INDUSTRY AS A WHOLE

• The luggage industry as a whole has increased over the years. With

the recent weight restrictions on luggage added by the Airline

industry, sales should continue to increase over the years to come.

• The industry (US) revenue for the year 2006 was approximately $720,000,000. The
gross profit was 34.14% . There were 193 establishments in this industry that year.

• Total import export value for the year 2006 was $4,408,764,000. There were 164
countries that conducted foreign trade with the US. The top trading Countries were:

China, Canada, Italy, Vietnam and Mexico. Their combined total represents
approximately 85% of all Imports and exports.

• Total import value for the year 2006 was $3,703,527,000. This represents a 15.9%
increase for the year 2005. The US. had imported industry related merchandise from

122 countries in 2006. The top importing Countries were: China, Italy, Vietnam,
France, and the Philippines.
 US LUGGAGE RETAILING SCENARIO
• The U.S. luggage and leather goods market, like the apparel market, is growing at
about 3 percent to 4 percent annually at retail, where the sector accounts for about

$7 billion.

• Also reflecting trends in the apparel industry, makers of luggage, bags and cases
continue to send more production offshore. Whereas international sourcing accounted
for an estimated 65 percent to 70 percent of their production.

• In fact, the industry's leading trade group, the Luggage & Leather Goods
Manufacturers Association (LLGMA), changed its rules several years ago and no
longer requires potential members to have U.S. production facilities. Now mandating
only that members have an office in the United States.

• By all accounts, the 90-year-old, $700 million, publicly held Samsonite Corp. is the
big fish, with an estimated 30 percent of U.S. market share. Insiders point to
JCPenney's Jaguar line as having the second-largest market share, with 7 percent of
overall sales, followed closely by Atlantic Luggage Co., which captures
approximately
6 percent of the dollars.
M
A
J
O
R
P
L
A
Y
E
R
S
• It’s a division of the holding Men’s bags Messenger bags and Rs.30000-60000
totes
company LVMH.
Briefcases and work Rs.50000-90000
• It was founded in 1854 by bags
Louis vuitton.
Clutches Rs.32000-40000

• Headquartered in Paris, Louis Hand bags Shoulder bags and Rs.45000-75000

totes
Top handles Rs.30000-60000
Vuitton is an international
trendsetting enterprise that Clutches Rs.32000-40000
employs more than 9,500 Travels Softsided luggage Rs.45000-75000
people in more than 300 Rolling luggage Rs.70000-150000
locations in 44 Hardsided luggage Rs.175000-285000
countries around the Accessories Rs.10000-15000
world.
•The Kipling story is one of
great passion, creativity and
entrepreneurial spirit. In 1987,
three friends in the fashion Hand bags Shoulder and hobo Rs.1500-4500
capital of the world created a Satchels Rs.2500-4500
line of casual and colourful Totes Rs.4500-7500
bags .They named the brand Cross body Rs.2400-4500
Kipling, after the well-known Clutch/wristlet Rs.1500-4500
and well-travelled author
Backpack All purpose Rs.5000-10000
Rudyard Kipling.
•Every year, 6 million Kipling Laptop backpack Rs.9000-10000

bags are purchased from Wheeled Rs.9000-10000

Kipling’s 215 stores and 450 Luggage Wheeled Rs.10000-17500
corners and shop-in-shops, or Carry on acceptable Rs.5000-18000
from 4,000 multi-brand stores. Duffles and Rs.4000-7500
•Kipling is part of VF weekenders
Corporation, a global leader in Travel and totes Rs.3000-12500
branded apparel and accessories.
• Immigrant Sol Koffler founded
American Luggage Works in
Providence, Rhode Island in
either 1932 or 1933 with his life
savings. He was determined to
produce luggage priced at $1 in
the midst of the Great
Depression.
Travel Cabin bags Rs.1200-5000
• The company's breakthrough
came soon after when Koffler
devised a new line that was
Suitcases Rs.1000-2000
significantly better than that of
the competition; he named it Duffles and small Rs.1200-2000
American Tourister. bags
• In 1993, American Tourister was
acquired by Astrum
International, which also made Business Laptop cases Rs.2500-4000
Samsonite luggage. Astrum was
renamed the Samsonite
Corporation two years later.. Attaché/briefcases Rs.2200-2400

• American Tourister has now

Casual Backpacks Rs.600-1000
become a lower-end version of
its Samsonite sister brand.
Laptop backpacks Rs.1000-1600
INDIAN LUGGAGE MARKET
ACC. TO DATA MONITOR REPORT ,
LUGGAGE AND LEATHER GOODS RETAIL
SALES IN INDIA INCREASED AT A CAGR
OF 16.4 % BETWEEN 2003 AND 2008.
BAGS , WALLETS AND PURSES SALES
INDIAN LUGGAGE MARKET – 2000 CRORES
LED THE LUGGAGE AND LEATHER
GOODS WITH A SHARE OF 57.9% IN 2008

ORGANISED – 1000 CRORES

UNORGANISED
PREMIUM – 350 CRORE MID RANGE – 400 CRORE 1000 CRORES
ECONOMY – 250 CRORE
LUGGAGE BRANDS MARKET SHARE

AMERICAN TOURISTER
10%
SAMSONITE
15%

VIP
50%

ARISTOCRAT
15%

ALFA
10%
Pre-1997

• During this period, the companies were more interested in volume sales

rather than satisfaction..

• 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.
• The battlefield now comprised VIP Industries 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 didn’t assume importance. In short, it
was more of selling than marketing.
Post-1997
•This was the period when the industry witnessed a paradigm shift in
terms of quality and service.

• Liberalized baggage rules, presence of multinational and freer import

of luggage helped the Indian consumer to access international quality
luggage.

•In fact it ushered in a phase where even the domestic companies showed
the keenness to compete with the foreigners instead of following them.
Sanjeev Aga, former CEO, VIP Industries says. “A few years back we
were not aware of our own strengths. We assumed that the best was
Samsonite or Delsey and we tried to come close to their standards. But
now, we feel that we must do better to outsmart them in the market.’

•While between 1990 and 1996 VIP had registered only eight new
designs in the next two years (1997 and 1998) the company registered 16
design patents. The Indian consumer today has more choice than before.
 ENVIROMENT ANALYSIS
Political Environment: Social Economic Technological
Environment: Environment: Environment: -
• Government has placed the
raw materials required for • The luggage Technology is
•Luggage sales
the industry under OGL industry’s growth also developed in
show a peak
(Open general license). rate is dependent manufacturing of
during the
Raw materials can be freely on the level of the luggage with
marriage season.
business & leisure specialized
imported. activity in the moulding
•This season
materials used to
witnesses a spate country. The
• There is no restriction on positive signal in mould the plastic
of purchases of
the export of finished the growth of the material.
luggage.
product and very little economy works Technology has
barriers were there for well for the made it possible
•Brands are
foreign firms to enter into luggage industry. for companies to
promoted as
Indian market. •The growth in the go for a large
status for
tourism industry production (VIP is
• International prices of raw consumers & 12000 per/day
materials are highly flexible. tourists. affects the
performances of (286 models) &
There is no policy to control Samsonite is
the burgeoning grey market. the luggage
industry. 1500 per/day (85
models)
PORTER’S
MODEL
 Average Per capita income
PATNA Per
City capita
SCENARIO
• Bihar's latest Economic Survey for 2007-08 income
 
Patna Rs 31,441
 
says as much: Patna's capita gross district
 
domestic product is Rs 31,441. Bangalore
 
Rs 29,394

 
• Patna also has the highest per capita saving Kolkata Rs 27,868
 
in  
Hyderabad Rs 28,768
the state at Rs 675.  
Greater Mum  
Rs 40,768
• Highest per-capita fuel consumption and the bai  
 
highest per capita income at Rs 6,958. Delhi Rs 43,155
 
 
• Across the state, the city also has highest per All India
 
Rs 22,946
capita spending share on health and
education (in 2006-07) at Rs 674 and Rs
Scope of branded luggage in Patna

To check the scope of branded luggage in Patna,

primary research has been done in Patna though
questionnaire survey. It has been done for retailers
and customers both.
Retailer survey
Sample size : 20
( Judgmental sampling)

Customer survey
Sample size: 50
(Judgmental sampling)
RETAILER SURVEY
 Luggage market

40%
ORGANISED
UNORGANISED

60%

 Share of organised retailing is 40% and of unorganised is 60%

Although the share of unorganized market is less than organized
but
 CONSUMER PREFERENCE FOR LUGGAGE
20

18

16

14

12

10

 Consumer have maximum preference for soft 2 wheel strolley , duffle,

wheel
duffle and hard suitcase
COMPARARTIVE ANALYSIS OF PRICES OF VIP , AMERICAN
TOURISTER AND SAMSONITE
MINIMUM PRICE OF VIP
MINIMUM PRICE OF SAMSONITE
MINIMUM PRICE OF AMERICAN TOURISTER
1490
BRIEFCASE 3600
2050

SATCHEL 3900
2300
700
BACKPACK 1900
1750
1200
VANITY CASE 2000
1150

SOFT SUITCASE

1600
HARD SUITCASE
2600
1100
WHEEL DUFFLE 2100
2075
900
DUFFLE 2100
1325
3000
SOFT 2 WHEEL STROLLEY 5500
2700
4000
HARD 2 WHEEL STROLLEY 5500
4000

SOFT 4 WHEEL STROLLEY 8900

HARD 4 WHEEL STROLLEY 6000

5000
 MAXIMUM PRICE OF VIP
MAXIMUM PRICE OF SAMSONITE
MAXIMUM PRICE OF AMERICAN TOURISTER

BRIEFCASE
3550

SATCHEL 6000
2900

1750
BACKPACK 4000
2100

1300
VANITY CASE 2100
1450

SOFT SUITCASE

3500
HARD SUITCASE
5400

1800
WHEEL DUFFLE 6500
3600

1600
DUFFLE 6500
2400

8000
SOFT 2 WHEEL STROLLEY 19000
4900

7000
HARD 2 WHEEL STROLLEY 19000
4500

SOFT 4 WHEEL STROLLEY 17000

HARD 4 WHEEL STROLLEY 18000

6000
 MARKET SHARE OF SOFT AND HARD LUGGAGE
SOFT LUGGAGE HARD LUGGAGE

35%

65%

 Share of soft luggage is 65%

 Soft luggage market is capturing the share of hard
luggage market.
CUSTOMER SPLIT FOR VIP CUSTOMER SPLIT OF OTHERS
NEW CUSTOMERS NEW CUSTOMERS
REPEAT CUSTOMERS REPEAT CUSTOMERS

10%

21%

90%

 Repeat customers of VIP is 90% and for others it is

79%

21%.
Customer loyalty for VIP is maximum in comparison
to other brands.
AVERAGE FOOTFALL
29
30

25
22

20 18
OFF SEASON
MARRIAGE
15 SEASON

10 8
7
6

0
VIP SAMSONITE SAFARI

 Average footfall for VIP is 29 and for SAMSONITE it

is 22.
 Luggage industry is mainly depend upon marriage
season
 LOCATION ANALYSIS
S.P VERMA ROAD BORING ROAD
DAKBUNGLOW CHAURAHA EXHIBHITION ROAD

19%

10%

52%

19%

 52% of the luggage shops are located on S.P verma

road
CUSTOMER SURVEY
 CONSUMER PREFERENCE
BRANDED NON BRANDED
23%

77%

 Consumer preference for branded luggage is 77%. And for

non branded it is 23%
 BRAND AWARENESS

50

40
35 35

25

15

VIP AMERICAN TOURISTER SAMSONITE ALFA ARISTOCRAT SAFARI

 Brand awareness of VIP is 100%.

 BRAND PREFERENCE
VIP, ALFA AND ARISTOCRAT AMERICAN TOURISTER
SAMSONITE SAFARI
OTHERS

8%

10%

14%
52%

16%

Although brand preference for VIP is maximum With

52%
 REPEAT PURCHASE
Once in 6 month Once in year Once in 2 year
Once in 3 year More than 3 year

2%
10%
18%

20%

50%

 50% of the customers do repeat purchase in 3

years
 Chart Title
1K TO 2K 2K TO 4K 4K TO 8K MORE THAN 8K

10%

34%

30%

26%

 30% of the customers spend 2k to 4k for one time luggage

purchase and 34% spend more than 8k.
 2500
BRIEFCASE

1300
SATCHEL

1400
BACKPACK

1700
VANITY CASE

2150
SOFT SUITCASE
C
A 2300
HARD SUITCASE
T
E
G WHEEL DUFFLE
2300 MAXIMUM PRICE
O
R MINIMUM PRICE
Y 1750
DUFFLE

4150
SOFT 2 WHEEL STROLLEY

4350
HARD 2 WHEEL STROLLEY

4300
SOFT 4 WHEEL STROLLEY

4400
HARD 4 WHEEL STROLLEY

0 500 1000 1500 2000 2500 3000 3500 4000 4500

RANGE

 Price preference by consumers shows that the consumers have

preference for mid range luggage.
 PREFERENCE
EXCLUSIVE BRAND OUTLET MULTI BRAND OUTLET
LOCAL VENDORS MALLS

20% 6%

44%

30%

 44% of the consumers have preference for exclusive business outlets and
30% have preference for mbo’s.
 Weighted average rank

4.2
3.8
3.4

2
1.6

quality price fashion design durability

 Weighted average rank for price is 1.6 and for quality is 2.

FINDINGS THROUGH SURVEY

Retailer survey
 Although the share of unorganized
market is less than organized but
still organized market is growing at a
very
fast pace in Patna.
 Consumer have maximum preference
for
soft 2 wheel strolley , duffle, wheel
duffle and hard suitcase.
 As VIP is in the luggage business
from very long time. So, the loyalty
for
VIP is maximum in Patna also.
 In Patna, luggage industry mainly
depends upon marriage season.
 Most preferred place to open a store
in Patna is S.P verma road.

 VIPIL with its brands VIP , ALFA and

ARISTOCRAT is a big fish in market
because of its wide distribution channel.

 Soft luggage market is eating up the

share
of hard luggage. There is a shift in
Consumer survey

 Considering luggage is a one time purchase consumer preference for

branded luggage is more.

 Brand awareness of VIP is maximum.

 Although brand preference for VIP is maximum but others brand are
also growing in Patna.

 Repeat purchase is maximum for once in 3 year which shows that

customer frequency will be less than in this industry.

 Price preference by consumers shows that the consumers have

preference for mid range luggage.

 Consumers have maximum preference for exclusive business outlets.

SUGGESTIONS

1. Existing brands other than SAMSONITE and

VIP can widen their product range and can
launch new products and new brands catering to
different segments.
Reason:
A) Because of duopolistic nature of this industry
consumers don’t have much choice in
choosing brands
2) There is a good scope for any new brand
targeting mid segment customers to come
into Patna and start the business.
Reasons:
A) Development and growth in Patna.

B) Because of duopolistic nature of this

industry consumers don’t have much
choice in choosing brands
THANK YOU