Radhika Piramal: Bag and baggage
The managing director of VIP Industries on soft luggage, soft skills, hard luggage, and a hard look at the Indian traveller
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The air conditioning wasn’t working in the coffee shop—and Radhika Piramal apologized. The courtesy was unnecessary (the employee at Mumbai’s Prabhadevi branch of Starbucks had informed us that the mechanic was trying to sort out the problem; no apology was offered), but Piramal—unlike almost anybody else in a similar situation—really meant it. The location was her suggestion, and we had all agreed to it. Piramal, dressed in a black blazer and jeans, with well-polished black clogs, hung her coat across the chair and leaned in.
You can tell that the 38-year-old managing director of VIP Industries—it’s one of India’s oldest family-owned luggage and bag brand businesses, one that has seen the days of the licence raj and the heady ones that followed liberalization—enjoys the feeling of responsibility. If the past seven years are anything to go by, she seems to be quite capable of handling it too.
In 2009, she took over as the executive director of the company, with her father Dilip Piramal as her boss. The following year, Radhika Piramal became managing director—a post she still occupies. But this wasn’t her first stint at the company. After a degree in politics, philosophy and economics from Oxford, UK, in 2000, and a stint at consulting firm Mitchell Madison Group, Piramal had returned to Mumbai to work as a brand manager for VIP from 2001-04—she was 23, keen to learn, and ready to travel the length and breadth of the country, meeting sales representatives, floor managers and other employees to learn the ropes. Barely six years earlier, she had come out to her parents (her mother is business journalist Gita Piramal) and elder sister Aparna.
“Category creation can take anywhere between five, seven or 10 years,” says Piramal, sipping from a bottle of mineral water. Creating space for a new idea in a traditional firm—and this could apply equally to the personal sphere—requires, among other things, “soft skills”. Piramal credits her success on this front to her time at the Harvard Business School, US, where she completed a master’s in business administration in 2006.
“When you want to take a group of people with you in a new direction, authority is by no means enough. You want buy-in, a bit of consensus building and (if you want) self-motivation and drive from people, you have to get them excited about the idea. I learnt the art of persuasion in business school.”
Piramal knew she would eventually join the family business. The question was when.
When she returned from New York in 2009—after stints at consulting firm Bain & Co. and FutureBrand, a boutique consulting firm (no relation to Future Group, or FutureBrands in India)—three things had changed, drastically transforming the landscape of her professional and personal life.
One, air traffic was booming—there were new airlines and the growing middle class could afford to fly. Two, there had been a shift from hard to soft luggage. In the early 2000s, during Piramal’s first stint at VIP, consumers preferred the traditional heavy suitcase. Termed hard luggage, this was the company’s mainstay. Typically, it did not have a trolley pulling system, so it was difficult to lug around—“the mental map of an Indian traveller (at the time) was that of a slightly anxious traveller who valued durability and security over convenience and mobility,” explains Piramal. By the time she returned in 2009, this had changed. Today, VIP manufactures hard luggage using polycarbonates and with a trolley pulling system, which makes it not only lighter, but also easier to use. However, soft luggage, made from polyester and nylon and imported from China, accounts for 70% of its total luggage sales.
Three, by the time she returned, the Delhi high court had decriminalized consensual adult same-sex relations by reading down Section 377 of the Indian Penal Code.
On the business front, VIP, which had a sizeable portion of the luggage market in the 1990s and early 2000s, was facing tough competition from brands such as Samsonite, which, according to reports, accounts for 30% of the Rs.4,500 crore branded luggage market.
The years following her return in 2009 were probably Piramal’s busiest. In 2010, VIP launched the British luggage brand Carlton, which it had bought in 2004, positioning it in the premium segment aimed at the business traveller. It has intensified its marketing of the brand since 2014.
In 2011, the company relaunched Skybags, a soft luggage brand from the 1990s that hadn’t been doing too well, as a youth brand selling not only soft luggage, but also backpacks and weekend bags at affordable prices. The same year, she married her partner in London. A year later, the company launched Caprese, a handbag brand aimed at the modern and urban young woman.
VIP got young celebrities like actors Varun Dhawan and Alia Bhatt as brand ambassadors for Skybags and Caprese, respectively. In an interview to The Financial Express earlier this year, Piramal said Skybags sales were skyrocketing—its year-on-year growth was 70%.
Nevertheless, Piramal has her work cut out—a large number of Indian consumers still buy unbranded handbags and backpacks; the unbranded industry is estimated to be worth Rs.3,000 crore. With Skybags and Caprese, Piramal hopes for a conversion: The range of Skybags backpacks starts at Rs.1,200, and of Caprese handbags, at Rs.2,000.
In 2011, a Mumbai tabloid outed Piramal, and she found that the best way to tackle this was to talk to her employees and extended family members about her sexuality. “It’s definitely far more challenging to be queer in India than it is in liberal societies in the US and UK. Section 377 still has not been struck down (in 2013, the Supreme Court overrode the Delhi high court verdict, effectively bringing back Section 377 to apply to consenting adults in same-sex partnerships). I’m very blessed to have the support of my family, not just my parents but also my extended family, network of friends and professionals. I do understand the fortunate position I am in, where my father is my boss, and my father has supported me since Day 1,” she says. “When you have love at home, it makes a big difference to how you succeed professionally.”
Piramal’s role allows her to oversee everything from the operations on the factory floor to showroom design and sales strategy. Earlier, the company functioned like a typical manufacturing set-up, with the supply chain reporting to manufacturing and design to marketing. Piramal changed that—all the function leaders report to her. She began to oversee things that traditionally weren’t directly under the managing director, making a shift to a consumer-centric company. The company now launches about 300 new products a year—20 years ago, it would launch one new product in three years.
Modern trade (in large retail chains such as Shoppers Stop, Lifestyle and Big Bazaar), which was less than 10% of sales in 2010, is now close to 25%.
In the past seven years, Piramal has doubled VIP’s sales, from Rs.642.7 crore in 2009-10 to Rs.1,216.4 crore in 2015-16. She hopes to repeat this feat, doubling sales again.
“And then,” she adds after a small pause, “keep growing.”
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