Samsonite planning to launch eBags.com in India by 2018-end
Mumbai: Samsonite SA is planning to launch its newly acquired online luggage portal eBags.com by the end of next year, a top company executive said.
The company will operate as a subsidiary of Samsonite South Asia Pvt. Ltd, the local unit of the Hong Kong-based parent.
Samsonite is planning to launch the online luggage marketplace in India which will offer Samsonite’s brands including American Tourister and Hartmann by the end of 2018, chief executive officer Ramesh Tainwala said in an interview. Samsonite SA acquired the Denver-based online retailer in April this year for $105 million and retained the management including CEO Mike Edwards. It had sales of $200 million in the last fiscal year, and carried over 11,000 products, Tainwala said. eBags was founded by Peter Cobb, who served as director of marketing at Samsonite, from 1990 to 1996.
“This (eBags.com) will help grow our digital business and our own e-commerce channel,” said Anushree Tainwala, executive director of marketing for Samsonite South Asia. “eBags will be a specialist for bags (and luggage) as a field.” Currently, eBags operates only in the US where it is headquartered. “We (Samsonite) give this brand additional leverage, because we are the market leaders in luggage,” Ramesh Tainwala said. “It is difficult to set up a sharply focused vertical (in e-commerce) unless you are backed by someone with a significant play in that market. Sephora has done well as it is backed by LVMH.”
The company is looking to leverage eBags along with its network of exclusive brand retail outlets to increase direct to consumer reach from 32% of sales currently to 50% of sales, Ramesh Tainwala said.
Samsonite’s immediate focus is to move eBags’ backend to Samsonite’s own IT platform and ensure the portal complies with local taxes in each country is it launched.
Samsonite is also looking to advance sales for its brand through eBags, where it currently makes up only 3% of total sales. However, Samsonite products will continue to sell on other e-commerce portals including Amazon and Flipkart.
The company has 11 brands and the value segment American Tourister, that sells suitcases, duffel bags and backpacks makes up 70% of the company’s India sales, Anushree Tainwala said.
“eBags will also become a powerful portal to do market research,” Ramesh Tainwala added, saying that the company will consider piloting new brands on the portal to introduce them in India and others. Samsonite currently sells in over 100 countries worldwide.
With this acquisition, Samsonite follows in the footsteps of other large consumer goods firms that chose to set up their own e-commerce arm rather than rely on independently set up portals like Amazon India and Flipkart. These include Reliance Retail’s AJIO, Aditya Birla Group’s abof.com and Tata Trent’s Cliq.com that retail brands owned by these firms along with rival brands.
VIP Industries is the market leader in the Indian bags and luggage segment followed by Samsonite, according to data from Euromonitor. “As disposable incomes are rising, more people are travelling, which is having a positive impact on sales of bags and luggage,” the Euromonitor report from September 2016 said. “India is also set to see 24 million outbound tourists by 2021, thereby presenting favourable prospects for the luggage industry in India in the future.”