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Ramesh Tainwala took over as chief executive officer of Samsonite International S.A. in October this year, with ambitions to double revenues in the next five years to $5 billion. Tainwala explained his outlook to Mahesh Kulkarni.
You are aiming at doubling your revenues to $5 billion in the next five years. How will you achieve this target?
Globally, Samsonite is growing at the rage of 14% annually. In some markets we are growing at much higher rate. For example, in India we are growing at the rate of 25% annually for the past five years. In China, the growth rate is at 15%. We have chalked out a growth plan for our global business, which will be achieved in three ways. We are aiming at increasing our sales through direct to consumer channel and our focus area will be to increase sales from non-travel products segment. We are also looking at gaining market share in all the territories we are present today and expand into new markets. We are also looking at increasing our sales through online channels like e-commerce platforms.
You are already present in about 100 countries. Where else are you looking to expand?
Yes, we are present in 100 countries. But, there are areas like Latin America, where we now increasing our focus. It is the last frontier that we are aiming to expand our sales. Of course, Africa will be another new market for us, which will be a big growth area after 20 years or so. We have created a special team for Africa, which will be visiting shortly to make a business plan. In Asia, we are almost present in all countries. For now, the focus area is Latin America, where we want to grow our business rapidly. Korea is another market, where there is a lot of demand for non-travel products like mobile covers and laptop bags.
What are your plans for India?
India is a high growth market for us, where we are growing at a CAGR of 25%. We are looking to expand rapidly in India. Going by the current rate of growth in India, we will double our sales in the next three years to in excess of Rs 1,500 crore from Rs 790 crore presently. We are currently in the process of expanding our vendor partner network. Presently, we have four vendors and we are actively scouting for adding more vendors who can deliver us high quality products. We are also planning to expand the capacity of our manufacturing unit at Nashik in in India. Also, we will open 25-30 new sales outlets next year.
How much of your sales come from online channels and how do you plan to leverage e-commerce platforms?
Currently, it is very small and contributes around 6% of our global sales. In some countries like China it is 20%, 30% in the UK and 6% in Korea. But it is growing faster and our target is to generate at least 50% of our sales in the next five years. We are now looking to increase our sales through e-commerce sites like Amazon, Flipkart or Snapdeal and also through our own website. We are working on a new software to be installed to drive online traffic to our website. It is currently being tested in the United States. A consumer can login into our website on his smartphone or laptop and place an order and get it delivered wherever he wants. He can place an order in India and take delivery at his doorstep in the US or vice versa or even pick it at any store of his choice.
How much of current sales come from non-travel products segment?
At present, it contributes around 25% of our total sales. Our aim is to double it to 50% in the next five years. In India, it is already 30-35% of our sales and in Korea it is 40%. Going forward, our key focus area is non-travel segment. The sales in non-travel products segment is higher per sq ft. It has shorter lifecycle and replacement is faster. We will focus on laptop backpacks, mobile and tablet covers among others.
Which are the new brands Samsonite is planning to launch in India?
We have recently acquired Speck Products, which makes mobile covers and another company and Gregory Mountain Products that makes high performance backpacks. We will be rolling out their products in many other countries. We have just completed the test marketing for 'High Sierra' brand of laptop backpacks in India. We will be launching the brand in January or February 2015.
We have just launched 'Hartmann' brand of luggage and non-luggage products in India. The first stores is opened at Bengaluru's UB City. We intend to open at least five outlets in India next year.
