Distribution Channel 2

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Industry Overview
Indian luggage industry
The luggage industry in India is currently undergoing consolidation. Competition in the sector is expected to intensify with the entry of foreign players like Delsey of France and many other Chinese players. The luggage market comprises three segments viz., the premium segment, regular segment, and standard or economy segment. According to a Datamonitor report, “Luggage and leather goods sales via key retail formats in India to 2013”, luggage and leather goods market in India posted a CAGR of 13.5% between 2003 and 2009, to USD 605 mn. Bags, wallets and purses sales led the luggage and leather goods market with a share of 57.9% in 2008. For many years, the market was dominated by players like VIP and Aristocrat. Then, Samsonite came in ~7-10 years ago, followed by American Tourister and Delsey. A few years ago, Witco India, a specialty multi brand retail chain of luggage, bags, and travel accessories, tapped the Indian market. Witco currently has 12 outlets in Chennai, Bengaluru, Kochi, and Calicut and aims to be India's leading retailer in travel requisites in the premium segment. It offers internationally renowned premium brands like Witco, Samsonite, Kipling, Rimowa, VIP, Jansport, Giordano, Delsey, American Tourister, Case Logic, Fiorelli, Jang, and Blue & Blues. Witco is the No.1 retailer of Samsonite in India and the No.1 retailer for VIP luggage in South India with more than 60% market share in Chennai. The total luggage market is pegged at around INR 30 bn with organised and unorganized players’ shares pegged at INR 10 bn and INR 20 bn, respectively. While hard luggage accounts for around INR 7 bn, soft luggage’s share stands at around INR 23 bn. In the context of the Indian luggage industry, soft luggage continues to be the prominent driver, growing at 30% per annum, whereas hard luggage is growing at 4-5% annually. There has been a continuous shift from hard luggage to soft luggage as the latter is much lighter than former and also is more stylish and easy to carry than the former and hence more appealing. However, hard luggage products are necessary from on overall brand building perspective as it helps retain loyal customers.

The unorganised sector continues to maintain its dominance in the lower end of the soft luggage market. Approximately two thirds of the low price segment is serviced by the unorganised sector.

Commonwealth Games 2010 to boost tourism
The countdown to the much awaited Common Wealth Games 2010 has begun. According to official estimates, around 2 mn foreign and 3.5 mn domestic tourists are likely to arrive in Delhi to attend the event. The period leading up to the games is going to have an even bigger impact on the country’s tourism industry. According to ASSOCHAM, Common Wealth Games 2010 is likely to bring in as high as 10 mn international tourists in 2010. Overall, the number of international passengers is estimated to rise from 25 mn last year to 45 mn by 2010. Also, the government has extended a five year tax rebate to the tourism industry to promote it. The current growth of the Indian hospitality industry is 12% which will surely rise to at least 20%. Given the large number of tourists expected to come to India and growth in the Indian hospitality industry we believe the luggage industry is definitely going to be a major beneficiary.

Marriage industry: Getting bigger
The wedding industry is worth over INR 1 tn and growing at 25-30% per annum. The estimated cost per wedding is ~INR 0.5 mn to as high as INR 50 mn. Around 10 mn wedding registered in India and the number of unregistered weddings is 5x of registered marriages. Most marriages in eastern India take place during April to June and hence the first quarter is generally strong for VIP. With each year Indian weddings are getting bigger and better and are offering lucrative business to players related to the wedding industry. Also, in India people are becoming more style...
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