Indian luggage industry growing

The Indian economy, which has been promising for a long time, continues to show signs of growth.

The government has been proactive and ensured that the growth engines are in place.

I have been highlighting the potential growth industries in India for the past one year through this newspaper. This time I'm going to cover the country's luggage industry.

The luggage industry to a large extent derives demand for its products from this industry.

The Indian luggage industry is estimated to be about Rs18 billion (Dh1.55 billion) in size and seeing some good growth for the past few years.

The luggage industry can be divided into soft luggage and hard luggage. The hard luggage segment use to largely dominate the markets some time back though now we see the soft luggage segment picking up and seeing some good growth.

The reason for hard luggage seeing such a huge demand earlier as compared to the soft luggage is the fact that the travel conditions in the country were not very conducive. But now with the travelling conditions improving in the country the soft luggage segment is also seeing some good.

The Indian luggage industry consists of three segments namely the premium segment, middle segment and the lower segment.

The premium segment is, till date, a very niche market but is growing substantially as the number of people who can afford it has been growing rapidly in the past few years. This segment consists of products above the range of Rs2,500 (Dh216) primarily.

The middle segment is the one which dominates the market and it forms the chunk of sales in the country. The reason for this being that the prices of this segment product is within the reach of the common man which thus helps to drives the volumes.

The lower end segment is also commanding a lion's share of the market as this segment suits the pocket of the masses.

In India, this industry has the presence of both the organised as well as the unorganised sector. The unorganised sector dominates the markets with about two-third of the total sales being undertaken by them.

The unorganised sector has largely been active in the middle as well as the lower-end segment. They dominate this market though of late this has come down primarily due to the fact that the organised markets have been able to eat into the markets of the unorganised sector.

The organised sector has been able to do so by doing some aggressive advertisement as well as keeping a tight check on their cost. They have also widened their network by adding a lot of distributors through out the country.

This has helped them to get business from areas where the unorganised sector dominated primarily due to the fact that the organised sector was not present here.

The luggage industry is witnessing good demand during the last few years due to the fact that tourism has gone up in the country. With the Indians spending more on travelling the demand for luggage industry has also gone up and this has helped the sector to do well.

The organised player in this industry have realised the vast potential this industry has and in order to tap it properly they have gone in for a tie up with big international players. This is helping them to get new products in the country as well as get more business.

There are many players who operate in the industry at the moment due to the fact that there is a large unorganised sector in the country.

The writer heads the Dubai office of Karvy Stock Broking Ltd.