In Tune With the Times
Q] Tell us about your journey, from CFO to MD of VIP Industries. Q] How do you prioritise investments in innovation across VIP Industries’ brand portfolio? Q] With VIP Bags being the second-largest luggage brand globally, what strategies do you employ to sustain and enhance this position at a time when there is increasing competition and changing consumer preferences? Q] VIP Industries recently introduced its lightweight range called VIP Airtron with the #LightUpYourNext campaign. Tell us a bit about this new range and the marketing campaign. Q] How does VIP Industries leverage its in-house manufacturing capabilities and distribution network to ensure consistent quality and availability of products across different markets? Q] What is your financial strategy to support growth and expansion, domestically and internationally? Q] With the rise of e-commerce and digital platforms, how does VIP Industries approach online sales and marketing to reach a wider audience and enhance customer engagement? Q] Can you share any upcoming product innovations or trends VIP Industries is particularly excited about? Q] As the Managing Director, what is your vision for the company?
I come from a conservative Marwadi family, where certain expectations were placed upon me, such as attending an all-girls college to pursue higher education. Despite the challenges, I completed my CA in 1997 and began my career at Kewal Kiran. In my 18 years of work experience at Jyoti Laboratories Limited, I gained extensive finance experience. Later, I served as CFO at Greaves Cotton before joining VIP during the COVID-19 pandemic. Here, I focused on cost reduction and working capital management. As a CFO, I believe in going beyond mere control and becoming a true business partner, using my business acumen to tackle challenges head-on.
Over the past five years, VIP Industries has seen a decline in its market share. In my current role, I prioritize front-end improvements, particularly, product development, focussing on premium ranges. As India’s per capita income rises and aspirations grow, there’s a notable shift towards premium purchases, even among those with limited budgets. To meet this demand, I’m increasing investments in premium offerings. Over the next three years, I aim to introduce pioneering products, starting with innovations in the Indian travel market, followed by global firsts, and ultimately, entirely novel concepts previously unseen in the travel industry. That’s the journey I’m committed to.
As a 50-year-old company, VIP Industries resembles a large ship. Currently, I’m leading efforts to steer a turnaround due to a loss in market share. My goal is to reverse this trend and regain ground through transformation. Over the next three years, we aim to increase margins from 14 percent to 20 percent, necessitating comprehensive changes. We’re undergoing a 360-degree overhaul, including revamping my team, with 60 percent of the people in new roles. With these measures, I’m confident in our ability to thrive.
It’s doing great. In the first month of the launch, we sold 5,000 pieces. Today’s consumers are seeking lightweight products due to airport restrictions on luggage weight. With lightweight products, they can carry more personal items. This aspect has certainly contributed to our success. Additionally, I’m focused on changing the perception of brand VIP. Many still see VIP as an old, outdated brand, but I’m actively working to demonstrate that VIP is youthful and dynamic.
VIP is renowned for its quality and reliability. Our factories adhere to stringent quality processes, such as subjecting each sample bag to a five-kilometre run before launch, conducting drop tests, and performing numerous tumble tests. As a result, sturdiness and reliability are intrinsic to VIP products. Currently, 90 percent of our hard luggage is manufactured in-house, allowing us to monitor quality. We maintain a QC lab within our factory premises to ensure rigorous quality control.
I believe that India is in the midst of a significant growth story. My primary focus is on the Indian market. Once I’ve addressed the current issue of losing market share and begin to regain it, then I can focus on expanding into international markets. While there is potential abroad, I want to prioritize tapping into the Indian market first. I am confident that within 12 to 18 months, we will start to regain market share.
We were late to enter the e-commerce space. However, today 20 percent of our business comes from e-commerce, compared to 12 percent last year. This year, we have seen a 65 percent growth in our e-commerce platform.
We have adopted three themes for our new launches. Lightweight, luxury, and technology, where we are integrating tech into our products, such as luggage with USB ports, biometric locks, and hybrid models with both hard and soft sides with additional pockets for convenience. This addresses the issue of hard luggage lacking pockets. Additionally, there are more exciting developments in the pipeline.
In the next five years, my goal for VIP is to increase market share by 20 percent annually, surpassing industry growth projections of 15 percent. I aim to transform VIP from a mere luggage company into a comprehensive travel solutions provider. This includes launching a wide range of accessories alongside our existing products, ensuring customers can find everything they need for travel in our stores.
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