Thinking Out Of The Bag

With a portfolio that caters to everyone from a commuter on a local train to a high-flier at the first-class lounge, the luggage major plans to repeat its feat of quadrupling net profit in the next five years.

- Jui Mukherjee

THE HUSTLE AND bustle of a railway station platform, the aroma of chai, Tinkle and Chacha Chaudhary comics at an old A.H. Wheeler bookstall, and the ubiquitous large grey VIP suitcase with the owner’s initials—that’s the memory of family vacations in the 1970s and 1980s. And another enduring image of pre-liberalisation India is that of a government babu wearing a safari suit and carrying a VIP briefcase to work.

Solid, dependable, and unflatteringly stodgy—these are the epithets most Indians born in the last century identify luggage maker VIP Industries with. Cut to the present: The Mumbai-based company still makes suitcases, but it has also diversified into soft luggage, backpacks, and handbags in bright colours as it targets the youth in an effort to keep up with the competition. It’s even roped in young superstar Alia Bhatt to endorse its Caprese handbags.

The expansion of its portfolio seems to be working. VIP Industries has managed to thwart competition from Samsonite, the market leader in all other countries the brand is present in. According to industry experts, VIP’s market share in India is around 52%, ahead of Samsonite at 35%, and Safari at 10%. With its dominant share of the market, VIP Industries finds a place on Fortune India’s Next 500 list again this year: It is ranked 165 with revenue of Rs 1,275.88 crore and profit of Rs 83.86 crore in FY17. In FY18, its revenue grew to Rs 1,425.65 crore, and profit stood at Rs 126.75 crore.

Chairman and managing director Dilip Piramal, 68, admits the company had to break the mould. “We were very good in the briefcases segment, what we call short-haul or daily-use products. But then, briefcases went out of fashion, and we didn’t get our act together for many years,” he says.