 "We expect markets such as India to more than double revenues: Ramesh Tainwala")
Six months ago, it was apparent to many that Samsonite’s Ramesh Tainwala, chief operating officer at that time, would eventually take over as the global head of the company. His elevation to the post of chief executive a month ago was an affirmation of this.
Tainwala, 55, joins a growing club of India-born chiefs of global giants in the fields of banking & finance, technology and consumer goods. In an interview with Viveat Susan Pinto, he talks about how he plans to increase the presence of the $2.5-billion (Rs 15,000-crore) company in emerging markets such as India and the investments he is making in e-commerce. Edited excerpts:
India’s contribution to Samsonite’s global revenues continues to be in single digits. Currently, your annual turnover in India is Rs 1,000 crore. How do you plan to increase this?
As a region, Asia already gives us 38 per cent of our revenue, in line with the Americas (North and South), which together contribute 38 per cent to our total top line. Europe accounts for the remaining 24 per cent. In the next few years, the scale will tilt further in Asia’s favour. We see revenues from Asia crossing the 40 per cent mark. Emerging markets such as China, India and Indonesia have natural buoyancy, allowing us to have ambitious targets for this region.
What steps will you take to double the turnover in India?
The clear challenge, or opportunity as I choose to call it, is to convince people to shift from unbranded to branded. The peculiarity of the market here is 80 per cent of it continues to be unbranded. The question is how to convince a consumer using unbranded products to make that decisive shift to branded luggage. How do you put it across to him that if he is spending a few rupees more on a Samsonite or American Tourister, he gets a good product, backed by a global after-sales service? This is something I am constantly talking to my team about, when I visit India. It is something we are giving significant attention to as well, with our products and price points.
For instance, the potential of American Tourister (a mass-market brand, with price points starting at Rs 3,200 a unit) was first discovered in India eight years ago. Since then, it has grown to become a significant contributor to the business here. Today, it gives us 80 per cent of our revenues in India, among the highest in markets where it is present.
How is e-commerce helping you in your attempt to increase business in India?
We do not view e-commerce as a threat. For us, it is an opportunity. This is because for a company such as ours, expanding beyond 150 cities is not cost-effective. E-commerce is a cost-effective platform and the reach we get as a result of this is enormous. We are also able to put up our entire catalogue online, which brick-and-mortar stores aren’t in a position to do. So, as far as I see, e-commerce is a win-win situation for us and we intend to harness its potential aggressively. We are spending $30 million (Rs 18-20 crore) on integrating offline and online retail, popularly called omni-channel retail. Currently, this is currently happening in a few markets in Asia and the US. It should be operational in India by next year.
Basically, we are giving consumers the option to click online (for our products). For this, they could either go to our website or any online marketplace we have tied up with and make their purchase. The delivery will happen anywhere, at any of our stores or at the consumer’s home. I see a paradigm shift in the purchase behaviour with this convenience, and I disagree that online is about discounting. That is a myth. Amazon, for instance, is offering our range without discounts.
Recently, you moved Latin America operations out of the Americas region. Why?
Because Latin America was bunched with North America, it wasn’t getting the attention it deserved. About four-five weeks ago, it was carved out as a separate region. That should give it the attention it deserves. We will look to push our presence aggressively in the markets there.
You are also launching American Tourister in Europe. Do you see demand for a value brand there?
Yes. Consumers are changing and those in Europe are looking at a price-value equation as much a buyer in Asia. As a leading player in the space, we have to be at the fore of identifying these trends.
Tainwala, 55, joins a growing club of India-born chiefs of global giants in the fields of banking & finance, technology and consumer goods. In an interview with Viveat Susan Pinto, he talks about how he plans to increase the presence of the $2.5-billion (Rs 15,000-crore) company in emerging markets such as India and the investments he is making in e-commerce. Edited excerpts:
India’s contribution to Samsonite’s global revenues continues to be in single digits. Currently, your annual turnover in India is Rs 1,000 crore. How do you plan to increase this?
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Globally, our vision for Samsonite is to double the turnover by 2020. India, along with other emerging markets, is expected to play a critical role in our drive to increase our turnover in the next five years. In fact, we are expecting markets such as India to more than double revenues, if we have to achieve our global target by 2020.
As a region, Asia already gives us 38 per cent of our revenue, in line with the Americas (North and South), which together contribute 38 per cent to our total top line. Europe accounts for the remaining 24 per cent. In the next few years, the scale will tilt further in Asia’s favour. We see revenues from Asia crossing the 40 per cent mark. Emerging markets such as China, India and Indonesia have natural buoyancy, allowing us to have ambitious targets for this region.
What steps will you take to double the turnover in India?
The clear challenge, or opportunity as I choose to call it, is to convince people to shift from unbranded to branded. The peculiarity of the market here is 80 per cent of it continues to be unbranded. The question is how to convince a consumer using unbranded products to make that decisive shift to branded luggage. How do you put it across to him that if he is spending a few rupees more on a Samsonite or American Tourister, he gets a good product, backed by a global after-sales service? This is something I am constantly talking to my team about, when I visit India. It is something we are giving significant attention to as well, with our products and price points.
For instance, the potential of American Tourister (a mass-market brand, with price points starting at Rs 3,200 a unit) was first discovered in India eight years ago. Since then, it has grown to become a significant contributor to the business here. Today, it gives us 80 per cent of our revenues in India, among the highest in markets where it is present.
How is e-commerce helping you in your attempt to increase business in India?
We do not view e-commerce as a threat. For us, it is an opportunity. This is because for a company such as ours, expanding beyond 150 cities is not cost-effective. E-commerce is a cost-effective platform and the reach we get as a result of this is enormous. We are also able to put up our entire catalogue online, which brick-and-mortar stores aren’t in a position to do. So, as far as I see, e-commerce is a win-win situation for us and we intend to harness its potential aggressively. We are spending $30 million (Rs 18-20 crore) on integrating offline and online retail, popularly called omni-channel retail. Currently, this is currently happening in a few markets in Asia and the US. It should be operational in India by next year.
Basically, we are giving consumers the option to click online (for our products). For this, they could either go to our website or any online marketplace we have tied up with and make their purchase. The delivery will happen anywhere, at any of our stores or at the consumer’s home. I see a paradigm shift in the purchase behaviour with this convenience, and I disagree that online is about discounting. That is a myth. Amazon, for instance, is offering our range without discounts.
Recently, you moved Latin America operations out of the Americas region. Why?
Because Latin America was bunched with North America, it wasn’t getting the attention it deserved. About four-five weeks ago, it was carved out as a separate region. That should give it the attention it deserves. We will look to push our presence aggressively in the markets there.
You are also launching American Tourister in Europe. Do you see demand for a value brand there?
Yes. Consumers are changing and those in Europe are looking at a price-value equation as much a buyer in Asia. As a leading player in the space, we have to be at the fore of identifying these trends.