Factors Influencing Luggage Industry’s Growth

1 Feb, 2023 15:07 IST|Sakshi Post
Sridhar Thirunakara, MD & CEO, Outshiny India (Left)

India's luggage and bag market expanded at a double-digit rate between 2013 and 2019, driven by an increase in leisure and business travel spending. The number of online portals has increased, products have been introduced at reasonable prices, and consumer preference has shifted from unbranded to branded quality products. The advent of numerous foreign competitors has also helped with this. In India, the luggage and bag industry has experienced strong growth thanks to strong consumer demand. As a result, many Indian producers found their profitability suffering due to the fall in the value of the US dollar. The stability of the GST rate at 18% (from 28%) had a favourable effect on consumer demand, though.

Over the years, the luggage and bags market in India has moved from just an unorganised one to an industry that has been attracting enormous investor and customer attention. In addition to the veteran and big players, smaller MSMEs (OEMs) that design and manufacture luggage, bags in-house have come in and made their way into becoming profitable in no time, thereby contributing to the Make In India initiative. 

In addition to the growth, here are some of the aspects influencing the industry's evolution-

Tourism
Indians rank fifth in terms of tourism spending, according to the World Travel & Tourism Council (WTTC). According to the Axis Securities analysis, between 2018 and 2024, the overall number of passengers flying will increase at a CAGR of 15%. The expansion of inbound travellers is probably being driven by the increase in train services and infrastructure. Along with a consistent rise in corporate travel, leisure travel has seen tremendous growth in recent years.

Social media
The trend of leisure travel has become more popular as a result of social media. The demand for travel backpacks and other baggage products has been fueled by this. The practice of following social media celebrities has increased the demand for stylish handbags. Additionally, the younger generation is brand aware. The significant proportion of women in the workforce in this nation is maintaining the handbags sector's steady expansion.

Preferences
India is fortunate to have a large and youthful population. India has not only the largest population of millennials in the world, but also the third-largest population of Generation Z worldwide, according to estimates from a recent analysis by EY. The rise of the luggage market has been facilitated by a young population that is thriving in an expanding economy and views luggage as an integral component of their way of life.

Innovative products
Traditionally, luggage was boxy and heavy and was difficult to push and drag. There are now travel bags with four wheels, a soft outer shell, and even scales. According to a survey, bags are becoming a fashion statement thanks to innovation and the newest styles. The attitude of the young population, which is brand and fashion sensitive, is contributing to the expansion of the luggage sector. 

E-commerce and Digital Marketing
The online market was in its early stages of development while experiencing tremendous expansion over time. E-commerce platforms offer honest product reviews from actual customers, assisting a customer in making an informed decision while making a purchase. In 2019, the bags segment came in second in revenue contribution, after the luggage section. However, bags dominated the category in terms of volume. Major competitors compete on the basis of pricing, product variety, design and style, functionality, and other considerations, with the competition in the online baggage and bag market being reported to be very fragmented. Online sales are anticipated to grow multifold as a result of the price-sensitive attitude of Indian consumers and the rising number of product listings and brands coming up on E-commerce platforms.

Conclusion
Due to travel bans and lockdowns brought on by the COVID-19 epidemic, a sizable portion of the world's population has been compelled to remain at home, which has had a negative influence on the luggage and backpack business. Additionally, most prospective buyers reduced their purchases of travel accessories, which had a detrimental impact on the sales revenues of the leading bag brands. However, as the pandemic situation has steadily improved, consumer purchasing habits have increased, and it is anticipated that the sector will once again reach its full potential as the economies of developing countries grow. The shift in consumer preferences for high-end luggage, the expanding travel and tourism sector, and the changing lifestyle is anticipated to have a beneficial impact on the market expansion.
 

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