Indian Luggage Industry – An Overview

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The luggage industry in India flourished in 2022 on the back of a 50% -70% increase in sales growth as compared to the pre-pandemic period of 2019 which was historically the best year for the industry. Factors like increased travel, a surge in weddings, demand from the Bharat consumer, and changing behavior - with every individual preferring to have their own luggage contributed to this growth spurt.

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Market Size

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The market size of the luggage sector is pegged at about INR 50,000 crore in India with branded luggage contributing to 25% of the overall pie. Retail sales have grown phenomenally due to travel and weddings while CSD (Canteen Stores Department) sales will see a downtrend as per estimates. The industry is seeing a shift from unorganized to organized – some reasons include increasing disposable income, e-commerce penetration in the Bharat market, and brand awareness. Further, changes in the way consumers travel like solo travel, multiple trips in a year, weekend getaways, and international travel, have induced shorter replacement cycles in the industry (from 8-10 years earlier to 2-3 years). In this oligopolistic industry, the top 3 companies VIP, Samsonite, and Safari control about 70% of the organized market.

Prior to COVID, most companies relied on imports from China; post-covid, companies have started setting up manufacturing facilities in India thereby reducing costs. The industry has primarily been segmented into hard luggage and soft luggage. Hard luggage includes suitcases and trolley bags. Soft luggage, on the other hand, includes a range of products like duffle bags, backpacks, soft-cover suitcases, and shoulder bags among others. While soft luggage occupies a larger market share, hard luggage is increasingly adopted by the millennial consumer.

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Shift to a Fashion Accessory

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Traditionally, luggage was boxy and heavy and was difficult to push and drag. With the increasing demand and millennial population, we now have travel bags with four wheels and a soft outer shell in vibrant and attractive colors. Further, millennials prefer an array of choices that are being catered to by new-age startups in the luggage segment.

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Opportunity for startups and factors driving growth

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Several new brands who have come into this market are disrupting the luggage category through innovative features like increased utility and security, charging ports, and suited-to-use luggage like an overnight backpack. Hugely standard offerings by the incumbent oligopolistic players have made innovation a possibility in this space. Few brands solving for the millennial population (which is the newest and biggest consumer of the luggage industry) are opening doors with the consumer through fashionable and high-utility products. Further, an increasing disposable income, brand consciousness, and image consciousness are leading to people disposing of old luggage and shifting to branded premium as well as luxury luggage.

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The playbook for new-age companies who aim to capture this market has been relatively clear. Targeting the millennial population through innovative high utility fashionable luggage has been a key driver for growth. Digital-first brands selling through various online modes of commerce have started acquiring customers with a millennial-first approach. Targeting tier-II markets and beyond through branded and low-cost offerings as compared to the unbranded segment has become another potential acquisition strategy. Startups that focus on factors like eco-friendly offerings and sustainability in luggage, tech-enablement, smart luggage, and product look and feel variations can get a foothold in the segment.

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This sector is at an inflection point for growth – while the domestic demand continues to rise, India has an opportunity to become the next hub for luggage exports due to the China Plus One strategy.

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The consumer vertical at Merisis is focused on the needs of the ever-changing Indian consumer. As the customer is evolving, consumer brands and services are on the lookout for constant innovation in order to stay relevant. The consumer team at Merisis strives to identify these trends early on and assist companies in the identified sub-segments with their growth plans. The team has extensive experience in fundraising and M&A transactions across the consumer sector – be it in products, services or channels. The Consumer team works hand in hand with all the other verticals in order to provide a consumer’s perspective to the offering. Read More

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