The world’s biggest luggage maker Samsonite claims to have a problem in India. According to a report in Economic Times, the company has seen its sales fall during the past quarter. So much so that Reza Taleghani, chief financial officer at Samsonite, reportedly called out fall in India business during investors’ calls. “Asia, a bit of a laggard compared to the other regions, primarily driven off of India, which has had that competitive dynamic with the discounting that’s been happening with VIP and Safari,” Samsonite CFO Taleghani told investors, adding that its Asian business fell 3.6% during the year but excluding India, it would have fallen only 0.3%.
Samsonite attributed its lackluster performance in Asia to intense competition and aggressive discounting by rivals VIP and Safari in India. The company’s mass-market brand, American Tourister, experienced a significant 31% sales drop in the December quarter, reflecting the challenges faced by this entry-level brand that directly competes with the two prominent listed Indian companies.
VIP MD says it is online platforms that offer discounts, not the brands
Incidentally, while Samsonite CFO may have blamed deep discounting by VIP and Safari for fall in sales, the two companies have also seen a fall in revenue during the past three quarters. For the nine months ending December, Safari’s net profit declined 27% to Rs 84 crore, while VIP reported a net loss of Rs 41 crore, a stark contrast to its Rs 78 crore profit the previous year. VIP’s Managing Director, Neetu Kashiramka, reportedly told analysts, “It’s hard to predict when this aggressive discounting will stabilize. We’re not seeing competitors ease up, and while rising crude oil prices could shift the dynamics, that’s not an immediate prospect.” She clarified, “We’re avoiding heavy discounts except in soft luggage. Online platforms, however, are offering steep markdowns—sometimes below cost—which is a major issue. They’re investing in their own brands, not ours.”
Samsonite CEO too names discounting by VIP and Safari as reason for fall in sales
About three years ago, India surpassed China to become Samsonite’s largest market for its Tumi and namesake luggage brands, only to lose that position to China the following year. In 2024, Samsonite’s sales in India fell by 18.3%, dropping from $260 million in 2023 to $210 million. Kyle Gendreau, Samsonite’s CEO, said, “We faced reduced retail footfall and lower consumer spending on premium and luxury brands, compounded by heightened discounting and promotional efforts from competitors, particularly in India.” He added, “While India presented challenges throughout the year, we’re observing an upward trend as we head into 2025, with a promising first quarter that signals India’s ongoing recovery and evolution.”
Mokobara, Assembly, and Uppercase: New brands increasing competition
Following the pandemic, India’s travel market surged as consumers embraced frequent vacations, but this growth has since slowed, with discretionary spending declining across all price segments. Additionally, new players in the luggage sector, such as Mokobara, Assembly, and Uppercase, have resorted to discounts to attract customers, further squeezing industry profits or deepening losses.
