Hi @Sandeepg
From the demand side, the indian luggage sector marketing is based on 3 price points i.e <= Rs 3000, 3000-6000 and >=6000.
Most of the demand which has been catered to by the unorganized sector is in the Rs <=3000 price point, while organized players like VIP have traditionally played in the 3000-6000 and 6000+ segment.
VIP has 2 brands to cater to the sub 3000 sector ( Aristocrat and Alpha ), but it doesnt have a big market share there. Its market share comes from the 3000-6000 segment where it has a virtual monopoly & over 70% share with the VIP and Skybags brands. It is also aspiring to capture some share in the 6000+ segment with Carlton where again it doesn’t have a big share.
In my view, while its difficult to predict how margins will go, my sense is that they will have more success with the 6000+ segment with Carlton as its an easier upgrade and aimed at premium business travelers.
VIP has to balance 6 brands - Aristo, Alpha, VIP, Skybags, Carlton and Caprese at different price points while Safari has a singular focus in a specific price point.
If i have to hazard a guess, I think margins will be under pressure for VIP going forward as it tries to focus on the <=3000 segment and the >=6000 segment because costs for competing in both segments are higher. You have to give quality in the 6000+ segment and have to price lower than incumbent ( Samsonite ), in the <=3000 you have to give up margins as freight costs are higher there and go head to head with Sudhir Jatia.
Lastly - they have a good CEO in sudip ghose who has been with VIP for a long time and has created brands with Samsonite earlier wrt to Lavie. VIP culture and leanings are more like Samsonite in many ways and that’s where I think it’s strategy will drift towards.
In any case, interesting times ahead for the sector.
Best
Bheeshma
Disc - Not invested in VIP