European premium luggage brand Delsey Paris is looking to make India a manufacturing hub, part of its global strategy to shift half its production out of Mainland China, global chief executive Davide Traxler said.
India is among the fastest growing market for the French brand and currently accounts for 5% of its total revenue. The company plans to double the revenue in the next three years. “India is one of the economies that we have very positive outlook for the next five years. We are all looking for what’s going to happen in the US, what’s going happen in Europe, but everyone seemed very confident in India. And that is very important because it’s such a huge population and a huge market. It is certainly a land where we want more presence, investing more and also sourcing more and purchasing raw materials,” said Traxler.
A recent Crisil report said India’s luggage industry revenue is set to rise 5% on-year this fiscal despite a high-base effect of 40% growth last fiscal due to rising penetration of hard luggage made by the organised sector, and continuing growth in tourism and corporate travel. “There was a lot of concentration in mainland China, but we have moved about 50% of production and distributed it to other countries in Southeast Asia and India is part of this rebalancing of our production,” said Traxler.
The company said growth in travel has been constant for the past 30 years and luggage is related to how much people travel.
“India is doing well and overall the company is doing well. We have more than doubled the turnover in the past two years and India is part of this trend,” the executive said. Traxler said that the consumer has changed its approach towards the purchase of luggage.
“Consumers are shifting from a very practical and utilitarian touristic approach of a functional luggage to something that is more to a certain extent, an extension of their style. So, people are looking for the colour they like, for the shape they like,” he said. As a result, its best sellers that used to be black and dark grey are now ivory or green or brown. Delsey Paris has collaborated with United Colors of Benetton in the design of a co-branded luggage and travel accessory range. The products in collection will be sold via brands’ websites and through Benetton and Delsey Paris point of sales worldwide. “We will have more license agreements,” Traxler said.
The brand produces about four million pieces a year and in India it wants to ramp up the production gradually. “Potential of the market is huge in terms of sales and in terms of production. Initially, we will produce only for India, but the next step will be to export the products,” the executive said.
Traxler said the main challenge is restriction on travels, which is impacted by geopolitical elements. “There are more countries where people are not so comfortable to go. The richness of the past 20 years has been the amount of exchange, learning to know each other better and knowing to respect different cultures and to understand them. The less there is this exchange, the more incomprehension and lack of cooperation,” he said.
Delsey Paris markets its collections online and in over 6,000 shops in more than 110 countries.