47405352 Luggage Retail Final

8/6/2019 47405352 Luggage Retail Final

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www.themegallery.com

BRANDED LUGGAGE RETAIL

BY:

MANIK ARORA

MFM-1


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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.


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RESEARCH METHODOLOGY:

Secondary Research- The secondary data and theoreticalinformation regarding the luggage retailing and market would

be conducted using reports, trade journals and internet.

Primary Research- Questionnaire survey to understand thescope of opening a branded retail store for luggage would be

done with customers and retailers.

Sample size - 100Sampling method convenience & judgmental


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LUGGAGE INDUSTRY AS A WHOLE

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


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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.


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M

AJ

O

R

P

L

A

YE

R

S


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Mens bags Messenger bags and

totes

Rs.30000-60000

Briefcases and work

bags

Rs.50000-90000

Clutches Rs.32000-40000

Hand bags Shoulder bags and

totes

Rs.45000-75000

Top handles Rs.30000-60000

Clutches Rs.32000-40000

Travels Softsided luggage Rs.45000-75000

Rolling luggage Rs.70000-150000

Hardsided luggage Rs.175000-285000

Accessories Rs.10000-15000

Its a division of the holding

company LVMH.

It was founded in 1854 by

Louis vuitton.

Headquartered in Paris, Louis

Vuitton is an internationaltrendsetting enterprise that

employs more than 9,500

people in more than 300

locations in 44

countries around the

world.


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Hand bags Shoulder and hobo Rs.1500-4500

Satchels Rs.2500-4500

Totes Rs.4500-7500Cross body Rs.2400-4500

Clutch/wristlet Rs.1500-4500

Backpack All purpose Rs.5000-10000

Laptop backpack Rs.9000-10000

Wheeled Rs.9000-10000Luggage Wheeled Rs.10000-17500

Carry on acceptable Rs.5000-18000

Duffles and

weekenders

Rs.4000-7500

Travel and totes Rs.3000-12500

The Kipling story is one ofgreat

passion, creativity and

entrepreneurial spirit. In 1987,

three friends in the fashion capital

of the world created a line of

casual and colourful bags .Theynamed the brand Kipling, after

the well-known and well-

travelled author Rudyard Kipling.

Every year, 6 million Kipling

bags are purchased fromKiplings 215 stores and 450

corners and shop-in-shops, or

from 4,000 multi-brand stores.

Kipling is part of VF

Corporation, a global leader in

branded apparel and accessories.


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Travel Cabin bags Rs.1200-5000

Suitcases Rs.1000-2000

Duffles and small

bags

Rs.1200-2000

Business Laptop cases Rs.2500-4000

Attach/briefcases Rs.2200-2400

Casual Backpacks Rs.600-1000

Laptop backpacks Rs.1000-1600

Immigrant Sol Koffler foundedAmerican Luggage Works inProvidence, Rhode Island ineither 1932 or 1933 with his lifesavings. He was determined to

produce luggage priced at $1 inthe midst of the GreatDepression.

The company's breakthroughcame soon after when Kofflerdevised a new line that was

significantly better than that ofthe competition; he named it

American Tourister.

In 1993, American Tourister wasacquired by AstrumInternational, which also made

Samsonite luggage. Astrum wasrenamed the SamsoniteCorporation two years later..

American Tourister has nowbecome a lower-end version ofits Samsonite sister brand.


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INDIANLUGGAGE

MARKET 2000CRORES

ORGANISED 1000 CRORES

PREMIUM 350CRORE

MID RANGE 400 CRORE

ECONOMY 250 CRORE

UNORGANISED

1000 CRORES

INDIAN LUGGAGE MARKET

ACC.T

O DATA MO

NITOR REPOR

T,LUGGAGE AND LEATHER GOODS RETAIL

SALES ININDIA INCREASED AT A CAGROF 16.4 % BETWEEN 2003 AND 2008.BAGS , WALLETS AND PURSES SALESLED THE LUGGAGE AND LEATHERGOODS WITH A SHARE OF 57.9% IN 2008


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VIP50%

0%

RISTOCR T15%

S MSONITE15%

MERIC NTOURISTER10%

LUGGAGE BRANDS MARKET SHARE


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Pre-1997

During this period, the companies were more interested in volume salesrather 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, abottom 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 didnt assume importance. In short, it

was more of selling than marketing.


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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 showedthe 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. Butnow, 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.


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Political Environment:

Government has placed theraw materials required forthe industry under OGL(Open general license).Raw materials can be freely

imported.

There is no restriction onthe export of finishedproduct and very littlebarriers were there forforeign firms to enter intoIndian market.

International prices of rawmaterials are highly flexible.There is no policy to control

the burgeoning grey market.

Social

Environment:

Luggage salesshow a peakduring themarriage season.

Thisseasonwitnesses a spateof purchases ofluggage.

Brand

sarepromoted as

status forconsumers &tourists.

Economic

Environment:

The luggageindustrys growthrate is dependenton the level of

bus

iness

& leis

ureactivity in thecountry. Thepositive signal inthe growth of theeconomy workswell for theluggage industry.The growth in thetourism industryaffects theperformances ofthe luggage

industry.

Technological

Environment: -

Technology isalso developed inmanufacturing ofthe luggage withspecialized

mouldingmaterials used tomould the plasticmaterial.Technology hasmade it possible

for companies togo for a largeproduction (VIP is12000 per/day(286 models) &Samsonite is

1500 per/day (85models

ENVIROMENT ANALYSIS


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PORTERS

MODEL


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Bihar's latest Economic Survey for 2007-08

says as much: Patna's capita gross district

domestic product is Rs 31,441.

Patna also has the highest per capita saving in

the state at Rs 675.

Highest per-capita fuel consumption and the

highest per capita income at Rs 6,958.

Across the state, the city also has highest per

capita spending share on health and education

(in 2006-07) at Rs 674 and Rs 5,633.

PATNA

SCENARIO

Average Per capita income

City

Per

capita

income

Patna Rs 31,441

Bangalore Rs 29,394

Kolkata Rs 27,868

Hyderabad Rs 28,768

Greater Mum

baiRs 40,768

Delhi Rs 43,155

All India Rs 22,946


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Scopeof branded luggage in Patna

To checkthe scopeof branded luggage in Patna,primary researchhas been done in Patna though

questionnaire survey. It has been donefor retailers

and customers both.Retailer survey

Sample size : 20

( Judgmental sampling)

Customer survey

Sample size: 50

(Judgmental sampling)


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RETAILERSURVEY


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40%

60%

Luggage market

ORGANISED

UNORGANISED

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

Although the share of unorganized market is less than organized but

still organized market is growing at a very fast pace in Patna.


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0

2

4

6

8

10

12

14

16

18

20

CONSUMERPREFERENCE FOR LUGGAGE

Series1

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

duffle and hard suitcase


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HARD 4 WHEEL STROLLEY

SOFT 4 WHEEL STROLLEY



DUFFLE

W

HEEL DUFFLE

HARD SUITCASE

SOFT SUITCASE

VANITY CASE

BACKPACK

SATCHEL

BRIEFCASE

4

27

132

2 7

26

11

17

23

2

6

89

21

21

2

19

39

36

4

3

9

11

16

12

7

149

MINIMUM PRICE OF AMERICANTOURISTER

MINIMUM PRICE OF SAMSONITE

MINIMUM PRICE OF VIP

COMPARARTIVE ANALYSIS OF PRICES OF VIP , AMERICAN

TOURISTER AND SAMSONITE


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DUFFLE

WHEEL DUFFLE

HARD SUITCASE

SOFT SUITCASE

VANITY CASE

BACKPACK

SATCHEL

BRIEFCASE

6000

4500

4900

2400

3600

5400

1450

2100

2900

3550

18000

17000

19000

19000

6500

6500

2100

4000

6000

7000

8000

1600

1800

3500

1300

1750

MAXIMUM PRICE OF AMERICANTOURISTER

MAXIMUM PRICE OF SAMSONITE

MAXIMUM PRICE OF VIP


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65%

35%

MARKET SHAREOF SOFT AND HARD LUGGAGE

SOFT LUGGAGE HARD LUGGAGE

Share of soft luggage is 65%

Soft luggage market is capturing the share of hard

luggage market.


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10%

90%

CUSTOMER SPLIT FOR VIP

NEW CUSTOMERS

REPEAT CUSTOMERS

79%

21%

CUSTOMER SPLIT OF OTHERS

NEW CUSTOMERS

REPEAT CUSTOMERS

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

21%.

Customer loyalty for VIP is maximum in comparison

to other brands.


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0

5

10

15

20

25

30

VIP SAMSONITE SAFARI

8

67

29

22

18

OFF SEASON

MARRIAGE

SEASON

AVERAGE FOOTFALL

Average footfall for VIP is 29 and for SAMSONITE it

is 22.

Luggage industry is mainly depend upon marriage

season


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52%

19%

10%

19%

LOCATION ANALYSIS

S.P VERMA ROAD BORING ROAD

DAKBUNGLOW CHAURAHA EXHIBHITION ROAD

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

road


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CUSTOMER SURVEY


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77%

23%

CONSUMERPREFERENCE

BRANDED NON BRANDED

Consumer preference for branded luggage is 77%. And for

non branded it is 23%


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VIP AMERICANTOURISTER

SAMSONITE ALFA ARISTOCRAT SAFARI

50

25

15

40

35 35

BRAND AWARENESS

Brand awareness ofVIP is 100%.


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52%

16%

14%

10%

8%

BRANDPREFERENCE

VIP, ALFA AND ARISTOCRAT AMERICANTOURISTER

SAMSONITE SAFARI

OTHERS

Although brand preferencefor VIP is maximum With 52%


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2%10%

20%

50%

18%

REPEAT PURCHASE

Once in 6 month Once in year Once in 2 year

Once in 3 year More than 3 year

50% of the customers do repeat purchase in 3 years


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

purchase and 34% spend more than 8k.

10%

30%

26%

34%

Chart Title

1K TO 2K 2K TO 4K 4K TO 8K MORE THAN 8K


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0 500 1000 1500 2000 2500 3000 3500 4000 4500





DUFFLE

WHEEL DUFFLE

HARD SUITCASE

SOFT SUITCASE

VANITY CASE

BACKPACK

SATCHEL

BRIEFCASE

4400

4300

4350

4150

1750

2300

2300

2150

1700

1400

1300

2500

RANGE

C

A

T

E

G

O

RY

MAXIMUM PRICE

MINI

MUM PRI

CE

Price preference by consumers shows that the consumers have

preference for mid range luggage.


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44%

30%

20%

6%

PREFERENCE

EXCLUSIVE BRAND OUTLET MULTI BRAND OUTLET LOCAL VENDORS MALLS

44% of the consumers have preference for exclusive business outlets and30% have preference for mbos.


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quality price fashion design durability

2

1.6

3.8

4.2

3.4

Weighted average rank

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


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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 forsoft 2 wheel strolley , duffle, wheel

duffle and hard suitcase.

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

demand of the customers for luggage

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.


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Consumer survey

Considering luggage is a one timepurchaseconsumerpreferencefor

branded luggage is more.

Brand awareness of VIP is maximum.

Although brandpreferencefor VIP is maximum but others brand are

also growing in Patna.

Repeatpurchase is maximum for once in 3 year which shows that

customer frequency will be less than in this industry.

Pricepreference by consumers shows that theconsumers have

preferencefor mid range luggage.

Consumers have maximumpreferencefor exclusive business outlets.


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SUGGESTIONS

1. Existing brands other than SAMSONITE andVIP can widen their product range and can

launch newproducts and new brands catering to

different segments.

Reason:A) Becauseof duopolistic natureof this industry

consumers dont have muchchoice in

choosing brands


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2) There is a good scopefor any new brand

targeting mid segment customers tocomeinto Patna and start the business.

Reasons:

A) Development and growth in Patna.

B) Becauseof duopolistic natureof this

industry consumers dont have much

choice in choosing brands


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THANK YOU

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47405352 Luggage Retail Final

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