VIP pioneered the luggage industry in India back in 1968. Over the years, the 56-year-old legacy company saw massive growth, expansion, and a Rs 7,000 cr valuation, but it has also been hurt by the penetration of international brands, the growing D2C market, and changing consumer preferences.
As a Chartered Accountant whose forte has been finance and accounts, Neetu Kashiramka, who has been MD of VIP Industries since August 2023, says, “I’ve taken a big risk with my career and I have no room for failure.” We had the opportunity to sit and talk with her about all things luggage.
Excerpts from the interview…
Could you highlight some changes in consumer preferences and how they have affected the luggage industry?
Luggage was considered for convenience and utility but is now considered for fashion. Hence, the replacement cycles, which used to be five to seven years, are now two to three years. We’ve seen the shift from utility to fashion happen post-pandemic, and since travel is picking up, the luggage industry is thought to be doing well for the next couple of years. We’re also doing a lot of digital marketing to capture the consumer.
Due to the fast fashion trend, are people looking to spend less on their luggage?
There are different kinds of consumers. There are people who buy things at the lower end so that they can afford to change them every year, but there's also a class of consumers who are ready to pay more. I'm looking forward to premiumisation for my organisation.
What are some innovations VIP boasts?
We recently launched very low-weight luggage. Weight is very critical because while the amount of kilos you can carry when you travel is reducing, consumers also want to pack more to change their outfits often. We’re also working on a 1.8 kg cabin bag, which will be the lightest ever in the industry. We also work on the tech side by offering luggage with USB charging options and biometric locks.
What is your vision for the company, and where do you see the future of tech in luggage taking us?
We have luggage that can be tracked, so it has a GPS that can be tracked with your mobile. Luggage that can follow you is something available in the developed market but costs a bomb. So at this point in time, maybe India is not ready.
Can you tell us about VIP’s various luggage brands and the strategies you use to differentiate between them?
We have four luggage brands - Aristocrat for the masses, VIP for families, Skybags for the youth, and, at the premium end, we have Carlton.
Carlton is what we call ‘the face of business’. The luggage look and feel are premium, and we open stores at the airport, so it resonates with consumers as a premium brand.
In the case of Skybags, we focus our efforts on digital. Our advertisements use rap songs and jingles to target the younger audience.
The marketing for VIP is very subtle and sober, as we want to attract families.
As for Aristocrat, we look at the customer as someone moving into branded luggage for the first time. So we offer them a longer warranty period as it helps build their trust.
Is there a focus on sustainability in the manufacturing or distribution of your products?
Seventy-five per cent of our hard luggage is PP, which is 100% recyclable, as opposed to the earlier PC, which was not recyclable. That shift has happened in the last three years. I also envision Carlton to be a 100% sustainable brand in the next 5 years. When you use recycled material, the product becomes costly, and since Carlton is a premium brand, that is something that can be done. We have already launched two products – one hard and one soft luggage – which are totally sustainable and are made using RPET (plastic made from repurposed waste PET plastic).
What is your understanding of shopping habits today? Has e-commerce taken over?
E-commerce is growing, but touch and feel will always be necessary in the luggage category. So, physical stores are not going away anytime soon. Across the category, 25% of sales are happening on e-commerce; for us, it is 20%.
How has e-commerce changed the landscape of the industry at large?
Through e-commerce aggregators, new entrants are getting a ready-made platform for distribution. Previously, distribution was a big entry barrier, but today, new entrants can reach multiple PIN codes only by listing on Flipkart and Amazon. So VIP’s forte of having 12,000 touch points across the country is going away. Because if somebody can do it only by listing on these two portals, the value of being present in those many outlets is reduced.
What are the changes you’re looking at to keep VIP relevant?
VIP’s share of mind is one of the best in the industry. However, sales are comparatively low, as people think we’re an older brand. I studied 20 markets within 45 days of taking up this role and realised people know about VIP but say, “It's not for me.” So, I want to make it relevant to everyone in the country. With the collections we’ve launched over the last 6 months, people’s perceptions will change, and we’ll stand out as an industry leader soon. I’ve taken this as a big risk to my career - moving from finance to business. So, there is no space for non-performance or failure.
What is your view on Gen-Z and how brands can capture their attention?
Gen-Z’s memory is very fickle. So even if they liked your brand today, they might forget they liked it tomorrow. You have to prove yourself to them every time they come to make a purchase. There is no space for complacency when dealing with Gen-Z.
What are the three lessons you’ve learnt in your professional journey?
Dream big if you want to do big.
There is no shortcut to success.
Believe in yourself, and the world will believe in you.
