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Dec, 01 2006

A bagful of opportunities Samsonite

Samsonite South Asia Pvt. Ltd is one of the main players in the Indian luggage industry and carries with it the global reputation of Samsonite orporation. The company has expanded considerably through the franchising mode, and through ther retailing forma

TRAVELLERS everywhere recognize the brand for its mix of style, quality and innovation in luggage products. Providing its customers a wide range of luggage options to choose from, the brand is a known name all across the world, and has also made a mark in the Indian luggage and leisure industry. The brand is Samsonite.

Today, the Indian customer can find the perfect Samsonite solution for her lifestyle and budget requirements. The company not only enjoys the highest brand awareness in the Indian luggage industry, but also has an excellent reputation for other quality products.

The Crossover

Samsonite Corporation was formed way back in 1910 in the US; since then there has been no stoppage in the company's growth and expansion. The company came to India in 1996 as Samsonite South Asia Pvt. Ltd. The product line for India includes a wide range of products in soft and hard luggage, backpacks, laptop bags, travel accessories and much more. The company has a 60:40 joint venture with the Tainwala family, and has its manufacturing plant at Nasik, which caters to the Indian market and also to those in Europe, the US, South Asia, and more. The Nasik plant is the second-largest manufacturing facility for Samsonite Corporation. The state-of-the-art plant produces hard-shell luggage, having an annual capacity of around 10 million units. Almost 80 percent of the production is exported.

Samsonite in India

The retail market for luggage, in the country, was not very organized till the recent past, but is getting organized with the Indian luggage industry getting restructured. Samsonite South Asia Pvt. Ltd's percentage share of the Indian luggage market in the premium category is over 75 per cent.

The company has a strong retail infrastructure in India, with over 150 brand stores. Not only are these numbers way ahead of any other player in this industry, the brand is comparable to many other larger brands of different categories in India. In the initial stages, the company had to really work hard for making a place for itself, as there was huge competition from the parallel brands. Mr N.P. Singh, Deputy Director Sales, Samsonite South Asia Pvt. Ltd, informs, "We did face competition from the existing brands in the beginning but Samsonite has managed to create a niche for itself by opening brand shops followed by positioning in department stores".

The company is heading towards expansion, with plans to have 50 new stores in the coming six to eight months. Informs Singh, "With these large format stores we plan to service our customers in Tier A and B cities in India.The vision for the immediate future with the launch of the luxury brand Black Label is to cater to the more premium market of travel connoisseurs." This Samsonite Black Label collection of the company will be retailed exclusively from Black Label concept boutiques; there are now three Black Label boutiques in India two in Mumbai, at Grand Hyatt Hotel and Atria Mall, and the third one at Park Street, Kolkata. The company is looking forward to add four more Black Label stores by the end of this year, one each at Banglore, Chennai, Delhi and Secunderabad.

Growth and Expansion of the Company

Samsonite has been growing at a rate of 35 per cent growth annually. The company has expanded significantly through the franchisee stores, company stores, leading departmental stores and a few selected multi-brand outlets. While the company has expanded profoundly through various modes, it has grown maximum trough the franchise stores. Many first-time franchisees have taken up franchises from the company and helped, to a great extent, in the company's expansion.

Franchise the Samsonite Way

To become a franchisee for Samsonite in India involves a detailed agreement that basically contains commercial commitment by the company and services offered by the franchisee. Any one interested in having a franchise can apply to the company and take their approval on location. The company has its main focus on eight power cities Mumbai, Kolkata, Chennai, Banglore, Pune, Hyderabad, Delhi and Ahmedabad. The consumer class for the company varies from city to city, so the company has to manage according to the diverse taste and preferences of its consumers. In the power cities mentioned, the company is mainly concentrating on the premium class of customers, which includes business travellers, top executives and frequent air-travelers.

To become a franchisee for Samsonite in India, no particular professional background is required. The only requirement is that a franchisee should have the ability to carry out the retail operations according to the company's parameters. Samsonite provides a franchisee with enormous support and helps in handing the franchise business. Arun Jain, franchisee, Samsonite, says, "We were already in the retail business of luggage for so many years, and were in the full know of the trade, and still it was a difficult choice to go into a franchisee business. It was the company's support and encouragement that actually made us go for it."

Another franchisee for Samsonite says, "Being a franchisee for Samsonite is great both in terms of growth and money. The only challenge we faced was changing our attitude to become a franchisee from a dealer."

As a Samsonite franchisee, one learns many things, ie, planning of inventory, regularity in reporting, maintaining the showroom in perfect condition, and also gains the satisfaction of selling an international brand and giving the customer value for money.

Samsonite Franchisee Vs Independent Dealer

Both options have their plus and minus points. In a private setup one is the boss and is not working for anybody. There are no restrictions as such and one doesn't depend upon the company's support. The fortunes of the business don't depend upon the parent company and the owner organizes everything on his own, such as investment, recruitment, training marketing. The entrepreneur is free to follow his own vision.

In a franchise setup, one's base stock is fixed and it is linked to the monthly sales. The franchisor provides regular training to the staff and makes sure that whatever difficulties a franchisee is facing, are solved as quickly as possible. The company is always ready to support its franchisees. On the franchisee's part, it is important to understand that she understands the franchisor-company's vision. Both parties should also realize that business is done only when both are in a winning position. Jain believes, "As a Samsonite franchisee, I feel that I am on a very strong footing. Within a year, from a totally disorganized single retail shop in a very traditional market, I now have four Samsonite showrooms in the best of locations. And all my showrooms are profit-making. I am able to give the best retail experience to my customers by not only providing the right mix of products but any kind of after-sales service also. And I provide all this in a top-class ambience that I maintain in my stores, so that the clients feel they are buying an international brand."

To sum up

Samsonite South Asia Pvt. Ltd has grown enormously in India; the main reason being the major support that translates from Samsonite Corporation's image as a global brand leader. While the company has not indianised the product and simply offers the product from the global product line, it keeps in mind the preferred colour choice of Indian customers. The company is successful in keeping the satisfaction level of the Indian customers at par with the customers in Europe. The company is growing through the franchise model. The company provides continuous guidance and support to its franchisees. The franchisees too are a satisfied lot and express a positive qualitative shift in their way of functioning after becoming Samsonite franchisees.

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