VIP to make hard luggage for Delsey

VIP Industries, the market leader in the Indian luggage segment, has signed an agreement with the world's second largest luggage company Delsey. This makes the Indian company the sole manufacturer for the French major's global hard luggage range.

Hard luggage makes up 15 per cent of Delsey's annual sales of more than three million pieces.

"We want to become the hard luggage factory for the world," said Dilip Piramal, chairman, VIP Industries.

VIP also manufactures hard luggage for retail chains like Carrefour. Piramal clarified that his company will only enter into contract manufacturing arrangements where it can realise significant value. Before the manufacturing arrangement, VIP had the exclusive marketing rights for Delsey in the SAARC region.

Piramal added that recently VIP has also rationalised its own mass market product portfolio.

This led to freeing up capacity required for making the Delsey range. "As and when the need arises, we will look into increasing our manufacturing capacity," said Piramal.

At present the total market for hard luggage is on the decline in India. As the consumer trend shifts to buying soft luggage, only 20 per cent of luggage buyers will prefer hard luggage in India in a couple of years, down from 40 per cent at present.

The domestic luggage segment is worth Rs 800 crore of which 40 per cent is devoted to hard luggage and 60 percent to soft luggage.

"The growth in the hard luggage segment has been slow because short haul consumers increasingly prefer soft luggage.

Soft luggage has seen a boost because of the changes in lifestyle," said company executives at VIP.

In India, VIP is also planning to make its presence felt aggressively in the large format retail segment.

The company is toying with the concept of shop-in-shop and wants to build up its distribution network in the organized retail formats.

The company is looking at a 30 percent compounded annual growth over the next five years.