With the 48-year-old luggage brand VIP Bags undergoing a revamp, the company is expecting the market share of the flagship brand to go up significantly.
In an interview to Moneycontrol, Sudip Ghose, Managing Director, VIP Industries said, “In the branded segment we have about 60 percent market share. In that 60 percent, we want VIP to become at least 40 percent among our other brands by end of this FY20.”
Currently, VIP has a market share of 22 percent. The company's other brands across categories include Carlton, Skybags, Caprese, Aristocrat and Alfa.
The luggage industry is divided in two parts—branded and unbranded. The branded luggage industry is about Rs 3,500-4,000 crore a year.
VIP and Samsonite dominate the branded luggage market in India, with Safari being a distant third.
Much of the growth will be furled by the revamp in the VIP Bags brand, which is owned by VIP Industries. Apart from a new logo, the brand has also roped in celebrity couple Saif Ali Khan and Kareena Kapoor Khan as brand ambassadors. The integrated summer campaign is called ‘Hello Holidays’.
“We are a nearly 50 year old brand. It is very important for brands which are in existence for 50 years to keep on reinventing themselves," Ghose said on the rationale behind rebranding. “We are more of a family brand. We wanted to keep the legacy of the brand yet keep it relevant especially for the new age consumer.”
“We wanted to make the brand younger, colourful for the new-age consumer of today,” Ghose added.
With this re-launch, Ghose expects younger consumers to come in to the fold.
According to Ghose, the company usually spends 5-5.50 percent of the total company’s turnover for promoting the brand, but a larger pie will be used for VIP Bags this time around. For the year ended on March 31, 2018, VIP Industries posted sales of Rs 1,416.34 crore, up 10 percent from a year ago.
The company has already tied up with IPL Franchise, Kings XI Punjab, as a principal sponsor.
E-commerce contributes 10 percent of the total business with a growth of almost 60-65 percent, Ghose added.
VIP Bags is largely targeted at mid premium segment, Ghose said. Accordingly, the company has set the pricing of its products. For instance, VIP’s check-in duffle bags range between Rs 3,500 and Rs 6,000. Carlton, on the other hand, is priced between Rs 6,000-18,000, Skybag Rs 2,500-5,000 and Aristocrat Rs 1500-2500.
When asked if the company is planning to hike the prices of VIP bags, Ghose said, “We already operate at a mid-premium segment. Price points are not going to change. We will change prices as and when required.”
The company that already has a distribution network in Tier I and Tier II is planning to make its Tier 3 and Tier IV network strong.
Generally, the company sells its products through franchise route and through their own stores and showrooms.
VIP has 550 exclusive retail locations and over 9000 touchpoints/doors in trade with a network of 90 distributors. It also has over 150 doors in Modern Format leading chains like Shopper’s Stop, Lifestyle, Central, Big Bazaar etc and in leading ecommerce players Flipkart, Amazon and Myntra.