Vip N Shadi.Com Case Study

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VIP remains a leader ‘Kal Bhi, Aaj Bhi, Kal Bhi’ with Strategic Changes

Established in 1971, VIP Industries Limited is the flagship company of the 200 million dollar DG Piramal Group. Its longstanding familiar Indian brand VIP is the largest luggage brand in Asia and the second largest producer of moulded luggage in the world after Samsonite. The first VIP suitcase was rolled out in 1971, and since then over 60 million pieces of VIP luggage have been sold around the world. In the organized Indian luggage market, VIP leads with a 60% market share, followed by Samsonite at 40%. In the international market Samsonite leads with 20% market share where as VIP follows at 6% with operations spread across 5 continents and in 27 countries.

VIP’s product range includes a variety of hard and soft luggage – strolleys, suitcases, duffle bags, overnight travel solutions, executive cases, backpacks, and even school bags. Apart from the mother VIP brand, the company also owns other reputed brands such as Alfa, Footloose, Elanza, Buddy, etc. It also markets under license Delsey products in India. Moreover, it has acquitted the UK-based Carlton brand in a bid to penetrate the European market. VIP’s products reach over 8000 retail outlets across the country and over 1300 outlets across 27 countries globally.

Ever since its launch, VIP has been an epic brand synonymous with luggage in India. Its products priced for masses, enjoyed a near monopoly till the mid’90s, and its sentimental, powerful, and long-playing advertising campaign ‘Kal bhi, aaj bhi, kal bhi….’ remained etched in public memory for years to come. However, the scenario started changing with the international leader Samsonite’s entry into the India market in 1997. After a few initial setbacks, Samsonite started cracking the Indian market and posing a challenge for VIP. Along with tha t, a gabble of unorganized players also started confronting VIP at the lower end.

This propelled VIP to take stock of the situation and realign its strategies with the changing market situation. VIP discovered that while competition was heating up, the Indian luggage industry had also been growing owing to a number of favorable factors. Most importantly, steady economic growth had led to an increase in people’s disposable incomes, thereby propelling the travel sector, which in turn had boosted the luggage industry. Frequent travel for business was also on the rise with organizations going global. This was also redefining people’s need for luggage. Convenience and variety in luggage based on specific travel occasions had started assuming prime importance. People no longer looked at suitcases as just a means of safeguarding and securing their belongings, but also cared for aesthetics, which increased the importance of soft luggage. Design, style, and attractive colors also guided people’s purchase decisions. Hence, luggage had transformed from being merely a functional product to a fashion or lifestyle statement. And people were no longer using the same suitcase for all travel requirements, but purchase had become more need-based with consumers buying luggage according to a particular type of holiday, trek excursion or business travel. Further, luggage in the premium segment had been growing the most.

In the wake of these changes, the age-old leader in luggage segment, VIP realized that youngsters perceived VIP as a brand belonging to parents’ and grandparents’ era. In order to be in sync with the times, VIP decided to change this perception and reposition itself as a contemporary lifestyle brand, which catered to people who traveled widely and followed a particular lifestyle.

On the product front, it rehashed its soft luggage portfolio since that was the category driving sales. Besides it also allowed the company to play around with styles, which were becoming a major criterion in luggage selection. In addition, VIP also started adding more variety, designs and colors to its...
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