Booming Luggage Categories
Booming Luggage Categories

ALFA, part of VIP Industries brand portfolio recently launched new range of hard luggage in the capital. On the sidelines of the event, Retailer got a chance to speak with Mr. Manish Vyas, Vice President, Marketing, VIP Industries and tried to know the company’s future plans of expansion.


Varun Jain (VJ): How big is the luggage industry in India?

Manish Vyas (MV): According to our estimate, it is about Rs 3,300 crore overall, out of which around 65 per cent of it will be unorganized  and around 1,200-1,300 crore would be organized. Soft Luggage would be around 75 per cent of the market and the remaining will be hard luggage.


VJ: What about VIP’s share in the whole luggage scenario?

MV: VIP, overall within the organized sector, which is 35 per cent of the category, we are 21 per cent out of that. So if you look 100 per cent as organized, we are almost 55 per cent of the category, which includes all our brands like VIP, ALFA, Aristocrat, Skybags etc.


VJ: Any plans of launching any new brand in the market?

MV: VIP has been our flagship brand which caters to the mass premium and premium segment. ALFA caters to sub popular economy segment. Then we have brands like Aristocrat and Skybag which are also in the popular price points and then there are brands like Delsey and Carlton which are at the premium end. We haven’t introduced Carlton in India as yet though its our own brand. And then we have got Footlose that has been there around for some time and caters to the youth. So, these are the brands that we have for different segments. Apart from this, no other plans to introduce a new brand.


VJ: Carlton has been with you since 2005. Any plans to launch it now?

MV: We are planning to launch that in India soon. I would not be able to comment on the specific timings of the launch though; Most probably by next year, it should arrive.


VJ: How will the Carlton’s launch in India enhance your presence?

MV: India is booming across all segments, right from luxury to economy. There are instances of luxury cars going out of stock. The air industry, the hotel industry, everything is at its peak. So, all the categories related to luggage are booming, in all the price segments. We are uniquely positioned to have a nice portfolio which can address to all these price segments. So we will be investing in all the brands and launching a new brand is definitely a small part of the strategy, but the bigger part of the strategy is to invest on all the existing brand portfolios.


VJ: How many new outlets are you looking to open this year?

MV: ALFA is the most widely distributed product in our portfolio. It has been sold through 7,500 outlets. We have direct distribution till towns with 50,000 population. Below that we have a distribution channel through wholesale. I think we will now further go down to the next levels of towns and probably through indirect distribution only since direct distribution may not be a viable option. And then we will see how it shapes up.


VJ: You have more than 300+ exclusive outlets on franchising format. How important is franchising for VIP?

MV: We have around 400 owned outlets, out of which 100 are our own lounges as we call them. Franchising is very important for us because I think that is a very important part of our marketing strategy as it gives the overall brand experience to the consumers. We will be investing more on these outlets as requirement, looking the viability aspect as well.


VJ: What is the average retail space of the exclusive retail outlets that you have?

MV: With the revised portfolio it may change but in the current portfolio I think it is somewhere around 1,000 sq ft.


VJ: Like Carlton, are you also looking to acquire new brands internationally?

MV: This is not under my purview but surely we are doing well and whatever fits our growth plans, we would certainly consider it.


VJ: Your results of this quarter were out a couple of days back. Have you done profit?

MV: Yes. Our profits have grown by 100 per cent. Our turnover has also grown to Rs 124 crores, which is a good 23 per cent growth over last year same quarter. On the debt issue, we have been in a far better position than last year.


VJ: How many manufacturing facilities do VIP has?

MV: We have got 2 plants in India, one in Nasik which is our oldest plant and the other in Haridwar respectively which makes hard luggage. Internationally we don’t have any manufacturing facilities.


VJ: Last year, VIP increased the price of their mass segment luggage which didn’t went according to the plan. Then the prices were lowered again. How has been the response?

MV: I think there was an attempt to make the brand VIP more into premium segment. I think the resonance was not there, so we stuck back to the original positioning of the brand. In last nine months we have done extremely well in VIP brand. It is one of the fatest growing brands in our portfolio. And we came back, so it was not a permanent loss.


VJ: What are your targets for this year?

MV: Last year we had our annual turnover of Rs 700 crore. His year we are looking to grow at 20 per cent plus. We are already growing at 23 per cent this quarter. The growth we are talking about will come from brands VIP and ALFA which are growing handsomely well for us.


VJ: What is the investment amount you have earmarked for this year?

MV: Overall, we would be investing in a range of Rs 25-30 crore on all our brands by the end of this march.

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