Samsonite to extend retail presence in China

Updated 2018-04-20 10:46:03 China Daily

Ramesh Tainwala, CEO of Samsonite International SA. (Photo provided to China Daily)

World's biggest luggage maker to grow and expand with additional stores and a new online platform

Flying 25 days every month, Ramesh Dungarmal Tainwala still looked energetic when he landed in Hong Kong for his company's annual financial results announcement. In charge of the world's largest luggage maker, the CEO of Samsonite International SA sees the Chinese mainland as his most important market, and is preparing to expand the company's retail presence there to increase direct-to-consumer sales.

The U.S.-based company has three strategies to attract Chinese customers: launching its own e-commerce platform; revamping its physical stores to make them more attractive to female customers; and continuously adding brick-and-mortar stores.

As for online sales, Samsonite currently sells on third-party platforms such as Tmall and JD, which makes up for 20 percent of the total sales on the mainland and is the fastest growing sector. The company hopes to increase both online and offline sales through the launch of its own e-commerce platform, as the website will serve not only as a place to sell products, but also a platform to market the brands.

The physical stores, Tainwala says, tend to have a masculine character, and Samsonite is now trying to make the stores more attractive to female consumers, who are generally willing to pay more for their favorite items than men. It will, for example, arrange a rest area in the store for men to use while their wives or girlfriends shop. With the women-first strategy, Samsonite is also looking to boost sales of office gear and nontravel products to women, by introducing more handbags. Products designed for women currently account for less than 5 percent of the company's sales, and Samsonite aims to eventually boost that ratio to a quarter.

There will be 15 new stores opened under the brand Samsonite this year on the Chinese mainland, and 20 new stores will be set up under the brand Tumi, a luxury baggage maker that Samsonite acquired in 2016. In Hong Kong, four Samsonite brand stores and two Tumi stores will be opened this year.

Samsonite acquired Tumi and online retailer eBags in 2016 and 2017 respectively, enabling the company to achieve growth in the direct-to-consumer channel, and to expand its sales in non-travel product categories, an area in which the company has historically been underrepresented. In the next one or two years, the company will continue to consolidate the two brands, while slowing down the acquisition activities.

Net profit for Samsonite International S.A. for the year ended on Dec 31, 2017, increased by 30.7 percent to 4.3 million from 5.7 million in 2016. Net sales jumped 23.3 percent to a record .49 billion in 2017, but its spending on marketing increased 43.3 percent to6 million for the year.

On the Chinese mainland, its net sales increased 11.9 percent compared with the previous year; excluding Tumi, the net sales grew by 7.2 percent, due to increased sales of the Samsonite and American Tourist brands. In Hong Kong, its net sales increased 34 percent compared with the previous year, driven by the addition of Tumi; excluding Tumi, net sales increased by 1.5 percent.

How's the business in the Chinese market now?

China is our second largest market, and it is the most important market in a sense, because it's growing very fast. What we do in China also influences Chinese customers' buying outside of China. Today, the Chinese business of our global business could be around 10 percent. But if we look at the sales made to the Chinese outside of China, that makes up for another 5 percent of the proceeds. So I would say our sales to the Chinese will almost make up for 15 percent of the revenue. That's a very meaningful part of our business.

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