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“ T O S T U D Y T H E M A R K E T S H A R E O F 5 K I N D S O F L U G G A G E B A G S
I N A H M E D A B A D ”
BY I L E S H G H E VA R I YA
MRACH 2016
TABLE OF CONTENT• Introduction of industry• PEST Analysis • 360 degree analysis• Product portfolio• Competitor analysis for VIP industries• Primary Research
Research MethodologyAnalysisBrand wise saleBrand wise Market shareCategory wise saleCategory wise Market share
• Findings• References
INTRODUCTION OF INDUSTRYThe Indian Luggage Industry is mainly engaged in the production of • Trolley bags, • bag packs, • duffel bags, • laptop bags• business travelling bags• Current Growth: 10-15% CAGR per annum• The luggage that people carry varies according to needs and choices and
this variation in needs and requirements makes the consumers to demand luggage in various styles and this provides the reason for the luggage products to be so diverse in terms of utility.
• The luggage market of India is undergoing a lot of innovation and development in the context of increasing the convenience of people. Innovation has led to the coming up of water-proof luggage and “the smart luggage” called pluggage. Pluggage provides various facilities like charging of phone, weighing scale and inbuilt speaker.
• The luggage market can be segmented on the basis of organized and unorganized segment where unorganized sector still occupies majority share of the market. Further segmentation could be done on the basis of make or materials and this segmentation suggests that soft-shell luggage holds the maximum share of the market, mostly because of its easy-fit in small spaces.
• The luggage market is mainly driven by the growth in the Indian travel and tourism industry as with more people travelling, the luggage they carry will increase proportionally. The more people earn, the more they spend on recreational activities like travelling. Luggage is an indispensable part of travelling and now it is becoming a status symbol too. Moreover the increase in urban population and increase in per-capita income have led to increased demand for products from the luggage industry. In addition to this, with the increased number of school going children, the demand for school bags have also increased and it has resulted in increased production in the luggage industry.
MARKET SIZE
2006 2010 2015*0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
14.2 26.054.7
10.9
20.3
43.4
7.0
11.5
20.3
Market Size
Casual Bag Segment Travel Bag Segment Business Bag segment
Sale
s val
ue in
bill
ion
in IN
R
Drivers
• Increasing disposable income of consumers• Enhanced visibility of products
• Lifestyle product• Organized sector:45%; Unorganized sector: 55%
CHANGING TRENDS
• The franchisee model• High end segment: tying up with global brands • Mid segment: value for money products• Large pool of consumers attracting Foreign players • The preference of consumers is now shifting to soft luggage
HOW BAG MANUFACTURERS SEE THE MARKET...- by Type
– Suitcases/Pullmans– Garment Bags and Carriers– Totes and Casual Bags– Carry-ons– Business Bags– Sport Bags– Backpacks– Daypacks
- by Material- by Hardware- by Accessories
• Government allows importing of raw material under OGL thereby easing the import of raw material
• Prices of raw material are flexible
• Cost structure of final product is affected by Excise duty, Import duty, Custom duty, Sales tax
• Luggage industry grows with the growth of Tourism industry
• Performance of luggage industry also depends on level of business and leisure activities
• Potential growth of 10-15% is making India a hub for multinational companies
• Luggage sales increases during festive seasons, marriage occasions, vacations
• Brands are positioned as status for consumers and tourists
• Luggage industry has seen shift from tin trunks, suitcases made of plywood to technologically superior plastic moulded suitcases
• Aesthetics, comfort & convenience are taken care of while designing the luggage
• Various features were implemented such as combination locks, wheels, handle, light weight material etc.
• VIP spends around 7% and Samsonite spends around 9% on technology
PEST ANALYSIS
Rivalry among competitors (High):
1. Growth : Moulded luggage (8%-10%); Soft luggage (25%)2. Lack of switching cost 3. Heavy investment makes exit difficult
Threat of Substitute (Medium):1. Soft luggage substitutes for moulded luggage2. Soft luggage is flexibility in size, design makes
Bargaining Power of Buyers (Medium):
1. Targeted customer base is huge2. Many players in organized sector 3. Huge unorganized sector
Threat of New Entrant (low):Entry Barriers:1. Distribution channel of Existing players2. Heavy investment by new entrant required; returns cannot be expected soon3. Excellent brad awareness of existing players
Bargaining Power of Suppliers (Medium):
1. No substitute raw material available2. Material can be imported as PP under OGL (VIP and Samsonite)3. The unorganized sector source their material from local sellers
360 DEGREE ANALYSIS
KEY VENDORS
PRODUCT PORTFOLIO OF VIP INDUSTRIES
PRODUCT PORTFOLIO OF VIP INDUSTRIES
PRODUCT PORTFOLIO OF VIP INDUSTRIES
Brands Products Target AudienceCarlton Backpacks, Messenger
bags ,briefcases, Duffel bag, Trolley bag
BusinessmenTagline : New Face of Business
VIP bags Backpacks, Messenger bags ,Duffel bag, Trolley bag
Quality conscious customers
Skybags Backpacks, Messenger bags , Duffel bag, Trolley bag
Travelers who like to make a style statement everywhere they go
Caprese Auxiliary Pocket like Purses/MursesFanny packs ,Small accessory cases
Fashion conscious ladies
Aristocrate Backpacks, Messenger bags ,briefcases, Duffel bag, Trolley bag
Durability and cost conscious people.
Alfa Backpacks, Messenger bags ,briefcases, Duffel bag, Trolley bag
• Cost conscious people• Value-for-money brand
*Mainly focused product category is coloured red
PRODUCT PORTFOLIO OF SAMSONITE
Brands Productssamsonite Backpacks, Messenger bags ,briefcases, Duffel bag,
Trolley bagAmerican Tourister Backpacks, Messenger bags ,Duffel bag, Trolley bagHartmann Backpacks, Messenger bags ,Duffel bag, Trolley bagTumi Backpacks, Messenger bags , Duffel bag, Trolley bagSpeck Backpack
PRODUCT PORTFOLIO OF SAMSONITE
*Mainly focused product category is coloured red
PRODUCT PORTFOLIO OF SAFARI
Brands Products Target AudienceSAFARI Backpacks, Messenger
bags ,briefcases, Duffel bag, Trolley bag
Cost conscious people.Affordable products
*Mainly focused product category is coloured red
PRODUCT PORTFOLIO OF WILDCRAFT
Brands Products Target AudienceWildcraft Backpacks, Messenger
bags ,Duffel bag, Trolley bagAdventure Enthusiast
*Mainly focused product category is coloured red
Wildcraft Usually have more capacity than
VIP More Durable Although VIP’s products are more
stylish
Samsonite
Perceived more trendy by the consumers
More durable Although VIP is a more cost
effective choice
safari VIP is perceived to be a better
brand- more durable Has more Variety Is cost effective
Hidesign Efficient with handbags VIP is famous for trolley
Online offerings to provide luggage or bags on rent- https://www.rentluggage.com/ Upcoming innovative products like- mobile cupboards or cupboards made of cloth which could be carried around
Direct CompetitionSubsidiary Products
Indirect Competition
Liberty LOUI VUITTONAdidas GucciNike Victoria SecretPuma Chanel
Fastrack
Local or small players Lower end:- Cost effective segment.Local or small players
Brands Competitive advantage
Briggs & Rileys
Strong brand Perceived as High quality Positive customer views
Tumi Customer service Pricing
Timberland Is very strong in certain local
markets Distribution channel
Anne Klein Preferred more by women High variety
Major
International
Competitors
Other Competitio
n
Repl
acem
ent
Co
mpe
titi
on
Direct Competitio
n – Core Products
COMPETITOR ANALYSIS FOR VIP INDUSTRIES
THE FRAMEWORK
This analysis of the luggage industry is based on the following 5 user based Classification of the luggage:Commuter Bags:These are luggage that you take with you to office or school on a daily basis. 1. Backpacks, 2. messenger bags 3. briefcases Travel Bags:This type of bags find use in longer travel itineraries and can be a 4. Duffel bag, 5. Trolley bag
*I have not considered “auxiliary Pockets” in this research
WHAT ARE USERS DOING WITH THEIR BAGS?
WHAT ARE USERS DOING WITH THEIR BAGS?
PRIMARY RESEARCH
RESEARCH METHODOLOGY
Sample size:50 (Consumers)
10 (retailers)
Sampling technique:Stratified sampling
Research instrument:
Well structured questionnaire.
Data analysis:1) Excel Models
2) Pie chart and Bar graphs
Data analysis software:Microsoft
excel
Research territory :Ahmedabad
*we have not used SPSS for analysis because of time constrain
ANALYSIS
We asked daily commuters and travelers to rate their bags on these 6 attributes...
1. style2. professional appearance3. carrying capacity4. durability5. comfort6. organization / pockets
COMMUTERS CHOOSE BACKPACKS FOR COMFORT, MESSENGER BAGS FOR STYLE, BUSINESS CASES FOR THEIR PROFESSIONAL APPEARANCE, DUFFLE BAG AND TROLLEY BAG FOR CARRYING CAPACITY .
RESPONDENT RETAILERS (AHMEDABAD)1) GOBLIN Bags 'n' More, parimal garden2) The Luggage Factory, satellite3) Luggage Point, satellite4) Shreeji Luggage Corner, narayanpura5) Bag Palace, paldi6) Prachi Luggage, Ankur cross road7) Green Channel The Luggage Shop, ellisbridge8) Gurukrupa Bags & Luggage shop, Meghaninagar9) Masco Luggage, gomtipur10) Jay Maruti Bag Shop, Vastrapur
BRAND WISE SALE*Values in INR
BRAND WISE MARKET SHARE
VIP industries20%
safari12%
samsonite22%
wildcraft11%
otherbrand/Un-organised sector
35%
Market share
VIP industriessafarisamsonitewildcraftotherbrand/Unorganised sector
CATEGORY WISE SALE*Values in INR
CATEGORY WISE MARKET SHARE
17.6; 18%
5.8; 6%4.5; 5%
33.8; 34%
38.3; 38%
Market share
Backpacks Messenger bags Briefcases Duffle bags Trolley bags
FINDINGS
• Samsonite and VIP industries are biggest market player in Ahmedabad territory with market share of 22% and 20% respectively.
• 60% of Samsonite’s sales coming only from American Tourister.• Skybags and Alfa together fetch 55 % of VIP Industries’ sales. • Demand of Trolley bags and duffle bags are highest in luggage bag category with
market share of 38.3% and 33.8% respectively.• Commuters choose backpacks for comfort, messenger bags for style, business cases
for their professional appearance, Duffle bag and trolley bag for carrying capacity.• Users are not completely satisfied with any of the five main types of luggage bags.
They want better style, professional appearance, and organization/Pocket.
Luggage bags have two fundamental problems...• No single bag works well in all situations.• There’s no easy way to carry more than one bag.Users may deal with these challenges in a variety of ways...• Buy lots of different bags & use a different bag for different situations• Borrow bags from other people• Buy one bag and try to force it to work in every situation• Buy a ‘hybrid’ bag• Carry multiple bags
FINDINGS
OPPORTUNITY
• The Analysis revealed that the ‘select a single bag’ solution was not satisfying all of the user needs.
• And the alternate option of carrying multiple bags had its disadvantages.• These issues points to opportunities that exists in the commuter bag
market
REFERENCES
• Travel Goods Association, http://www.travel-goods.org • The Wikipedia encyclopedia• survey data• http://www.MarketResearch.com• http://www.vipindustries.co.in/brands.php
FUTURISTIC SUITCASES
THANK YOU