Her role model in business is Warren Buffett, the US business magnate and mercurial investor. What she likes most about him is his ability to excel in whatever he does. When Radhika Piramal took over as Managing Director of her father Dilip Piramal's luggage company, VIP Industries, in 2009, her goal was to strengthen the company's leadership position. "What I brought to the table was clear brand segmentation and a distinct portfolio strategy that targeted specific consumers," she says.
Though VIP had an enviable market share of over 60 per cent and VIP was a household name, synonymous with luggage, a large chunk of consumers, especially the youth, didn't identify with it. In an era of backpacks and duffle bags, fewer and fewer people were going for the good old suitcase. In response, Radhika resurrected the country's first strolley brand, Skybag, that her father had launched in the eighties, and positioned it as a youth product. She also launched funky luggage, backpacks, gym bags and duffle bags.
"The VIP brand no doubt had a strong appeal but I said India is a young country and a lot of young people would want more choice than they have grown up with," she says. She also hired young talent, something that her father says has been her biggest contribution. "I really needed Radhika. All my good guys had left and it was becoming difficult to get somebody good," he had told Business Today in an earlier interview.In 2012, VIP forayed into handbags for women under the brand name Caprese. Around this time, the average age of VIP employees was below 40 years, and so Piramal asked women colleagues to try out the brand. "Even now we get women employees to test new designs before rolling them out," says Piramal, who herself owns 10 Caprese bags, her favourite one being a classic black piece that she carries to work. "I also have a shocking pink Caprese which works well for parties."
Though Caprese is yet to gain popularity, Piramal hopes that it will be a Rs 100-crore brand in the next five years. She is banking on Caprese to not only reach out to young women but also to ensure higher volume growth for VIP. This is because the luggage category is growing at just seven-eight per cent a year and it is crucial to explore adjacent categories. Moreover, apart from Samsonite, which was already giving VIP sleepless nights, there is also competition from global brands such as Delsey and Tumi.
"Luggage is a not a large industry as the primary product is not bought frequently. You buy a luggage in two or three years or, maybe, five years, depending on how thrifty you are," says Piramal. However, women will not hesitate to buy three or four handbags every year. Also, apart from Hidesign, India doesn't have a brand of premium and mid-segment handbags. "At the low end, there are a lot of options in the Rs 1,000-1,500 range, but they don't have the international style and fashion quotient. We thought there is a huge market in the mid-segment." Priced at Rs 3,000-5,000, Caprese bags are cheaper than the Hidesign products.
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One segment where VIP was routed by Samsonite was the Rs 10,000 and above segment. To counter this, Piramal decided to launch Carlton, the British brand that VIP had acquired in 2004, in India.
Brand specialist Harish Bijoor, CEO, Harish Bijoor Consults, says VIP has done well under Piramal. "VIP has changed and the brand is certainly on the right track. It has been forced to change by competition," he says.
However, Piramal's biggest challenge, say industry experts, is retaining its market share in the luggage industry. Retail consultant Harminder Sahni, Managing Director, Wazir & Co, says with the market opening up to more international brands, Piramal has to play her cards more carefully than her competitors. "One has to look at the business critically every single day and see where it's growing and how it's growing," says Sahni.
Intense competition is a challenge, agrees Piramal, though she is proud that India is one of the few markets where the $2-billion Samsonite has not succeeded in getting to the No. 1 position. She is confident of doubling VIP's revenue to Rs 2,000 crore in the next five years.