Indian firm wants to raise its brand image

The luggage maker VIP Industries wants an upgrade in its status and wants it now. "There's this perception in the local market that we are a value brand and largely confined to the Dh149 to Dh399 range, which is quite at odds with the reality and the positioning VIP has in other markets," said Neeraj Dhingra, who heads the international business. "It's a perception we are intent on changing along with our local and regional partners." To help matters on its course, the brand has introduced models that are priced from Dh550 to Dh699, which include those that are made of polycarbonate and said to be the next big trend in the personal luggage business. The latter range is just being rolled out in all key markets and comes after an extensive design and development process at the company's labs. VIP Industries is the world's second largest maker of personal luggage and also owns Carlton, the venerable upscale British brand. Since the acquisition in 2004, Carlton's global sales have been seeing steady gains, said Dhingra, who also doubles as the CEO for the brand's operations. Despite the new emphasis on achieving a premium tag in these markets, VIP is not about to vacate the value space. But does that mean selling items for Dh149? "That's actually not dictated by us or by the partners, but comes about as part of aggressive promotions launched by supermarket operators Carrefour and LuLu," said Dhingra. "That will continue, but on our own we aim to create a "mass-premium" image for the brand. "The launch of the 12 new models this week is part of that process." In the local market, VIP is among the top three brands alongside Samsonite and Delsey, with the holder of the second and third positions being fluid. Dhingra wants to change that and establish VIP more securely in the top two spots. However, there are no plans to have standalone stores for the premium Carlton brand. In the past, the world's leading luggage maker Samsonite preferred dedicated stores in the region and confirmed plans to add more. Dhingra said such a retail concept may not be the right fit for Carlton. "Yes, it's upscale, but realistically Carlton's interests will be best served by retaining its positioning within upscale multi-merchandise stores that our partners operate," Dhingra said. "It has worked well for us." "That's as far as the regional plans are concerned. At the global level, the luggage industry has been on an upswing and nowhere more so than in India, VIP Industries' home market. Currently, soft luggage makes up 80 per cent of its volumes and VIP hopes that with the introduction of the lightweight polycarbonate models a gradual transition will be made to moulded makes. "There are no specifics in the personal luggage market and it's pretty much unified everywhere," said Dhingra. "The only difference is which brand is selling them." VIP Industries is working on a blueprint to shift its reliance on China for its soft luggage production. Currently, all of it is made there through sub-contracts. "However, the cost of production is increasing and the Chinese workforce themselves are shifting to opportunities in tech manufacturing,"?said Neeraj Dhingra of VIP Industries. "Not just that, the Chinese currency is also proving a factor in raising our cost of sourcing. "We have more or less decided to go for a dedicated manufacturing unit on or own in India or through a joint venture in Sri Lanka or Bangladesh. A decision on where it will be could be taken in the next six months. "It will be a phased shift from China to the new factory. It has to be gradual and not in one shot to ensure production continuity is maintained."? VIP Industries is also starting to see positives from the Carlton buyout in 2004. "It took its time, but recent results have been quite favourable," said Dhingra. "Currently, 14 per cent of our revenues come from international markets and Carlton's contribution in that is around 9 per cent. "It's good, but we could still get more out of that." From / Gulf News