Premium luggage manufacturer named Samsonite has been making waves in the industry. With a remarkable growth of nearly 40% during the first half of 2023, the company is setting its sights on achieving a substantial sales milestone of Rs 3,600 crore by the end of the year. This exciting journey is guided by a strong focus on quality and a strategic approach to serving different market segments.
Samsonite, holding a significant 35% share in the organized luggage market valued at Rs 15,000 crore in India, has managed to establish a dominant presence in the premium segment. This segment, which accounts for 20-25% of the company’s business, presents a unique advantage due to its relatively limited competition. This success has been driven by a diverse range of products that bear the original Samsonite name, as well as those branded under the popular American Tourister label.
Interestingly, Samsonite’s lineup includes the recent addition of the Kamiliant brand, which competes directly with other value segment players like Safari and VIP. Positioned strategically, American Tourister bridges the gap between Samsonite’s premium offerings and the more budget-friendly Kamiliant, making it a mass-premium brand catering to a broader audience.
The company’s thriving performance isn’t confined to India alone. Samsonite’s parent company, Samsonite International, is traded on the Hong Kong stock exchange. In the first half of 2023, it reported a staggering $1.04 billion in gross profit, a remarkable 47.5% increase from the previous year. This success can be attributed to a notable 44.5% surge in revenue, totaling $1.8 billion, largely fueled by a 310 basis points rise in gross margins, reaching 58.8%.
The driving force behind this remarkable success story is the Asian market, particularly India. The region accounted for an impressive revenue of $694 million, making it the most profitable region for the company. Notably, within India’s expansive luggage industry, which is valued at approximately Rs 35,000 crore, the unorganized sector claims a significant 60% share. Meanwhile, renowned brands like Samsonite, VIP, and Safari contribute the remaining 40%, equating to around Rs 15,000 crore in annual sales.
India’s ascent to the top of the volume rankings, surpassing even China and the US, speaks volumes about its growing importance in the global luggage market. In the current year, India experienced an impressive growth rate of 38.4% during the first half, while China followed closely with a 99.6% growth, bouncing back after a challenging 2022.
Jai Krishnan, the CEO of Samsonite India & South Asia, expressed his optimism about sustaining the growth momentum in the Indian market. He highlighted that the travel industry’s resilience post-pandemic and the increasing trend of “revenge travel” were significant factors contributing to the robust growth. Corporate travel, he emphasized, was also on the rise, further propelling the company’s success.
While Krishnan refrained from sharing specific India-centric numbers due to company policy, insights from the 2022 annual report suggest that India contributed around 7-8% to the group’s total revenue, amounting to approximately $320 million or Rs 2,600 crore. With the ongoing growth trajectory of nearly 40%, if sustained, this growth would translate to an additional Rs 1,000 crore, pushing the total sales figure for the year well beyond Rs 3,600 crore.
At the heart of this remarkable journey is the Nashik manufacturing plant, the largest within the group, with a monthly capacity of 8 lakh units. Currently undergoing a Rs 100-crore expansion, this plant is expected to reach completion by the early months of the following year. Presently, it produces 5 lakh units per month. The facility manufactures a range of products under various brand names, including Samsonite, American Tourister, and Kamiliant. Additionally, Nashik is also home to contract manufacturing operations for backpacks and other products.
The robust growth in the Indian travel industry, combined with Samsonite’s brand legacy, has positioned the company at the forefront of this upward trend. As the world’s leading brand in the luggage sector, Samsonite’s role in driving the growth wave cannot be overstated. According to Krishnan, India’s contribution to the group’s revenue is expected to surpass 10% this year, further underlining the country’s importance in the company’s global strategy.
The luggage industry’s impressive growth story is a testament to changing consumer preferences, especially the rising demand for premium and hard luggage products. Factors such as the evolving preference for experiential travel have added fuel to the industry’s growth engine. In response to this demand, Samsonite has laid out plans to expand its retail footprint, aiming to increase the number of American Tourister stores to 500 by Diwali.
As a pioneer in the industry, Samsonite’s offerings include both hard and soft luggage products. The Nashik plant’s unique claim to fame lies in its utilization of a patented pressure molding technology, making it the world’s first and only facility capable of producing hard luggage bodies and casings using this advanced technique.
The luggage makers’ resilience is evident from their projected 15% revenue growth in the current fiscal year. The shift in consumer preferences toward premium and hard products, coupled with the sustained growth in tourism and corporate travel, has set the stage for this positive trajectory. In the previous fiscal year, organized luggage makers experienced a robust growth of 40%.
In conclusion, Samsonite’s journey of growth and success stands as a shining example in the luggage industry. With its strategic approach, commitment to quality, and innovative product range, the company has not only achieved remarkable growth but has also become a symbol of excellence in the premium luggage segment. As the Indian and global travel markets continue to evolve, Samsonite’s continued success seems all but assured.