Riding the wave of economic expansion of the fast-moving travel and travellers industry is India’s decades-old luggage brand VIP.
The implementation of the Goods and Services Tax (GST) gave the travel industry a massive fillip, evident in the faster growth in sales of VIP Industries in the last two quarters. Will the luggage business sustain these high growth rates? BW Businessworld’s Clifford Alvares caught up with VIP Industries’ Chairman and Managing Director Dilip Piramal for an insight into what drives the company, its brand strategy, and economic progress.
It goes without saying that VIP is one of the oldest brands. But, what are you doing to keep the brand abreast with changing market conditions?
VIP is a third-generation brand, and retains its strength and durability, well-known as it is for its stylish and mobile luggage. Wherever there is a heritage brand which takes in the third generation, youngsters don’t identify with it easily. That is inevitable. That is why we launched Skybags ten years ago, a more modern brand. That is how VIP keeps abreast of change.
How has GST implementation impacted your business?
The GST has been a boon for our industry. The formal sector has received a boost. There seems to be a shift from the informal to the formal sector; as our economy becomes more formal, the regulated sector will do extremely well. That’s good for businesses such as ours?
The industry is seeing volume growth? Has the need arisen to cut prices of your products?
Volume growth is on account of growth in travel. We have indeed cut prices once the GST on luggage came down to 18 per cent, from the original 28 per cent. We have passed on the benefit to consumers in line with the revised GST rates. However, the commodity cycle is shifting and we are experiencing huge increases in procurement prices of raw materials. This means we may have to raise prices to manage these higher costs.
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