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Delsey’s Second Innings in India

After ending their decade-old marriage with vip, delsey,the world’s second largest producer and seller of luggage and travel goods, re-entered the indian market in 2011. On the back of encouraging response received fromthe indian consumer as compared to the target set forthe first year, the company is aggressively rolling out its presence in the metros and emerging cities to occupy thenumero uno position in the indian luggage market
The fortunes of the Indianluggage retail segment are tied tothe travel and tourism industry. TheWorld Travel & Tourism Council(WTTC), a global business leaders’forum for travel and tourism whichworks to raise its awareness as ofone the world’s largest industries,estimates that $1 mn spending intravel and tourism generates $1.3 mnGDP in India. This underscores itslinkages with the rest of the economy.

The luggage market in India hasbeen growing steadily over the past few years due to the increasingdisposable income levels, rise inthe number of air travellers, theexpanding number of retailersand specialty stores all over thecountry and luggage fast turninginto a lifestyle product rather thansomething utilitarian. According tomarket estimates, the Indian luggagemarket is currently pegged somewherebetween Rs 3,000 and Rs 4,000 crore,out of which around 65 percent isunorganised. The organised marketis dominated by VIP (60 percentshare) followed by Samsonite. Thefast-growing Indian market is alsoattracting other international playersto grab a pie of the Indian luggagemarket.
The latest entrant in the brandedluggage market is the French luggagebrand Delsey. Although the companywas present in India since 2001,through a licensing agreement withVIP, it has decided to go solo afterboth the partners parted ways in 2010.Currently, it has entered into a jointventure with an Indian partner. “It isimportant for us to have a partnershipbecause we think we know somethings about how to design, produceand sell luggage, but we don’t knowmuch about the Indian market and assuch we needed a reverse partner whohas a long experience in retailing,” saysFrédéric Cachera, Delsey’s Global CEO.
Since its inception in 1946, Delseyhas been a creator of baggage. Formore than 65 years, the brand hasbeen offering both personal andprofessional luggage for travellers.Today Delsey is present in 5continents and in more than 130countries.
Customer Profile
Delsey designs baggage for bothbusiness and leisure travel and catersto families, couples, businessmen andwomen. In India, the brand wants totarget upper middle to upper socialstrata. “Well we are very clearly amedium to premium brand. We arenot low price and we think thereis pretty good business to be doneworldwide by addressing the mediumto upper social classes,” says Cachera.
According to him: The highereconomic growth in the last decadehas given fi nancial freedom toconsumers. They are not just beingquality conscious but also priceconscious.
Product Range
The company’s product portfolio isbroadly stacked under two headsincluding travel collection andbusiness collection, alongside arange of travel accessories. The travelproduct range includes Helium,U-lite and All Around collections.The Helium collection made frompolycarbonate material consists of both ultra-light and extremely sturdysuitcases distinguished for its sleekand lightweight design. It is pricedbetween RS6,000 and RS19,000

On the other hand, the U-litecollection is designed according tothe latest fashion trends. The rangeincludes suitcases, duffl e bags, andtoiletry cases and is available withinthe price range of `2,000 to `14,000.Made from polycarbonate material,the All Around collection inspiredby the designs and colours from the1970’s decade. The ticket size for thiscategory ranges between Rs 8,000 and Rs19,000.
The business collection includesQuarterback and DLC collection.Quarterback collection is acomprehensive range of professionalbackpacks available within the pricerange of Rs 9,000 to Rs 14,000. DLC rangeis a fl exible and ultra lightweightbusiness luggage available for bothmen and women. The accessoriesrange is made up of various luggageadd-ons such as foldable rucksacks,expandable suitcase covers, padlocks,luggage scales, luggage straps, andtravel pillows, among others.
Current Trends
India is traditionally being considereda hard luggage market. However,the country has witnessed a drasticchange in the last decade. Now,luggage is no longer considered afunctional product that people buyfor 10-15 years. Indian consumershave become increasingly fashionconscious where aesthetics andattractive colours have started playinga major role in their decision-making.Earlier a lot of luggage bought wasduring weddings. This trend hasslowly shifted towards need-basedbuying. Another important trendamong the Indian consumers is a shift  in preference towards soft luggagefrom hard due to convenience andprice factors.
Delsey India is best placed to tapthe Indian market with its offeringsdue to rising demand for branded andpremium goods. The Indian consumertoday would not hesitate to loosen hispurse strings in return for value formoney. With more and more womenalso entering the workplace, manyof the new travel goods are beingspecifi cally designed for women,including portfolios and laptop bags.In addition, there are new luggagelines featuring special sections fortoiletries, cosmetics, shoes and otheritems that enable female travellers to travel more conveniently.
However, the company will face stiffcompetition in India from its erstwhilepartner, VIP, which controls morethan 50 percent of the market share.“We don’t want to comment toomuch about competitors because, youknow, the sun shines for everyone. Iam not sure that besides Samsonitewe can consider anyone else ascompetitor. The reason being thatwe are the second largest brand inthe world with a worldwide set-up.VIP to my knowledge is very strongin India and Carlton internationallyhas not broken through. Samsoniteis really someone that we need tokeep an eye on. But we need notcopy what they are doing or else we will be put in the same box. We needto do things differently particularlybecause we want to bypass them oneday. We very strongly emphasise our French Parisian origin which no othermedium to premium internationalluggage brand can claim. That’s ourvery USP,” comments Cachera oncompetition in India
Stores and Expansion
Delsey’s products are distributed inmore than 70 stores in India today,out of which 6 are company owned. Ithas recently opened its sixth store inBangalore. Some of the other locationswhere the brand is present includeNew Delhi, Gurgaon, Mumbai andChandigarh.
“We are very positive about thepotential of Delsey in India, and thenew store in Bangalore is a signifi cantaddition to the fi ve boutiques alreadyestablished. Our goal is to ensure thatDelsey is a brand with an extensivereach across the whole country andwe are looking forward to openingstores in Hyderabad, Chandigarh,Jaipur and Kolkata in the comingmonths,” informs Cachera..
“Our teams are investingsignifi cantly into replicating theinternational success of Delsey inIndia. We regularly launch newinnovative lines with French Touchdesign and a variety of appealingcolour and passionately believe thatDelsey is and will continue to becomethe preferred brand for fashion- oriented consumers in India. Delseyhas an experienced and dynamicteam in India and we are confi dentthat within the next 12 to 18 monthsthe company will be among the top3 international luggage brands in thecountry,” Cachera continues.
Location Strategy
The company has presence both inmalls and high streets. It has takenthe franchising route to expand itsfootprint in India. In a vast countrylike this with a diverse mix ofconsumer tastes and preferences,retailers look for region-specifi cstrategies to drive sales, underscoringthe need of a local partner whounderstand the ground realities andmarket pulse.
“Many people who are in theretail business today have verygood understanding of the localbusiness. They have presence at theright location because of which itis important for us to partner withthem,” believes Anil Verma, COO,Delsey India.
The company believes that afranchisee is in a better position tounderstand the taste and preferencesof local customers due to hisproximity and would easily be ableto convince the customers about theproduct.
Journey Ahead
According to the company offi cials,the Delsey brand has high visibilityto create recall value, thanks to itsdecade-long partnership with VIP.

“We are not really starting freshfrom nothing. People know and likethe brand. The image is positive,”comments Cachera. He is alsovery bullish about India’s growthprospects and the place it occupiesin the company’s overall global growth strategy.
As a result of the initial success,Delsey is now further investing inIndia and rolling out an ambitiousplan to open stores in six locationsaround the country, growing itspresence in metros as well as inemerging cities to meet consumerdemand. The company hopes toachieve the same success in Indiajust like the way it has been in otherbig and most successful markets,with high double-digit growth rates.To achieve this, it will pursue itsstrategy of opening a number ofboutiques over the coming months.This activity will be supported byimportant investments that willenable the company to build brandawareness and image in India.
As Delsey rolls out its globalstrategy plans on a local level,the company will look to furtherhire highly skilled and committedmanagers and teams in India forits New Delhi head offi ce andnationwide sales team. “Buyingluggage today is like buying a pieceof clothing. This attitude is veryimportant to us,” he concludes
Shreem Jeweler, a unit of ShivanshDiamond, commenced its business in1996. The company was involved inwholesale trading of diamonds andstudded gold jewellery in Northernstates of India – catering to Delhi, UttarPradesh, Haryana and Punjab. Now, ithas entered the retail sector by openingits first store spread across 7,000 sq.ft.at Karol Bagh in New Delhi.
Market Trends
India possesses world’s mostcompetitive gems and jewellerymarket due to its low cost ofproduction, highly skilled, low-costand best artisan force for designingand crafting jewellery, along withstrong government support in theform of incentives and establishmentof special economic zones (SEZs).Indian gems and jewellery market isdominated by the unorganised playersand orgainsed share is only about 5 percent. However, the trend is setto change in the near future due tothe growing acceptance of brandedjewellery. The sector is expected togrow at a compound annual growthrate of around 13 percent during 2011-2013, as per an RNCOS report titled“Indian Gems and Jewellery MarketForecast to 2013.” The reasons behindthe growth include an increasingdisposable income, growing numberof working women, fostering newtalent, etc.
The key trends in the jewellerymarket of India are the changing tasteand preferences of the consumers,festive season sales, emergenceof new distribution channels andinclination towards branded jewellery.

Diamonds have always enjoyeda special place among preciousgemstones. However, with theeconomic slowdown, emeralds,rubies, and sapphires are gaining favour just as sales for diamondsare beginning to show weakness.The celebrity quotient makes a hugedifference in the industry – whenJessica Simpson showed off herengagement ring, ruby in the centregot more attention than the diamondsset in the ring.
Four Ps Of Marketing
Product: Shreem drives its namefrom the Sanskrit word Shree whichmeans goddess “Laxmi.” The jewellerspecialises in fashionable ornamentsranging from gold, diamond, rubies,emerald to platinum jewellery andcoloured gold.
It has an exquisite jewellerycollection for wedding, light-weight,designer and workwear for women,which includes earrings, pendents,rings, necklaces, bracelets, traditionalsets and many more. “We alsocustomize the range of offerings with regards to the shape, size, textureand others according to the customerspecifi cations,” informs AshutoshSharma, MD, Shreem Jeweler
The most popular are the diamondand gold sets that are liked by thecustomers. Kundan and polka arealso famous amongst Shreem’scustomer base. “We are also lookingat experimentation of traditional andcontemporary designs such as polkiand diamond sets. These would beperfect combination of two differentgenres of jewellery,” he adds.
Price: The price range of the jewellery is between Rs 5,000 and Rs 50,00,000.However, people who walk into thestore spend Rs 2-8 lakh on an average
Place: high street versus malls
The company has opened its first store at a high street. Taking about the location preference, Sharma states: “We prefer to be situated on high streets where there are small shops and some place where we do not face stiff competition from big brands.”
The company is planning to promote its business through different ATL and BTL activities and tie-ups with malls and other places that witness higher footfalls. Shreem has also roped in Bollywood diva Esha Gupta as the brand ambassador.

“Besides that, PR plays a very important part of our communication as it enables us to reach out to our target audience and stakeholders wherein we can showcase our new collection and other announcements made by the company in the public domain,” informs Sharma.
“In particular, we don’t stick to any age group as such. We feel that the main target audience is the new age woman who likes to possess a variety of collection in her wardrobe. Our jewellery stands for the modern glamorous independent woman,” reveals Sharma.
For loyal Customers
Though the company does not have any customer loyalty programme, very soon will be starting it. “Through this programme, our customers will get a chance to enjoy the benefi ts of shopping at our store through an EMI scheme where they can pay us in installments and there is no financial burden on them,” Sharma stresses.
Shreem Jeweler provides certifi cates of authenticity and gives an assurance of buy back or exchange in case of any kind of dissatisfaction to the customer.
The industry is cluttered with a lot of players and is a very competitive market. “In the jewellery industry, the challenge that we face on a daily basis would be the safety of the stock that we sit on. We do have our safety measures taken and strict recruitment policies to ensure quality of security,” Sharma says. “
Our competition includes jewellery players such as PC Jeweller, Shree Raj Mahal Jewellers, and Khanna Jewellers who want to grab a slice of pie in the jewellery market,” he adds
Presently the company has around 35 employees in the store. Shreem Jeweler has a policy of employing personnel with at least fi ve years of experience. The company provides general training to them since they come with a good background of work knowledge. There are also sessions to explain the quality and testing processes of jewellery, which makes them serve the customers better and ensure quality of service provided. ‘
No’ to franchise route
Shreem Jeweler is not looking at any franchisees at this point in time. “We are a brand-conscious company that is known for its quality of products and customer service. The franchise route for us does not seem a viable option since they may dilute the brand image and may not deliver the same quality of service. Hence, we aim at opening company-owned outlets only,” informs Sharma.

The company is planning to launch five more company-owned stores in North India. Hence, as of now the focus remains on the Northern belt of the country.