VIP Bags: The big revamp

After nearly 50 years, the iconic luggage brand, VIP Bags, has undergone a major brand revamp for the first time. Armed with new products, a snazzy new logo and a slick marketing campaign, the brand is now looking to woo the jet-setting young Indian family via its summer campaign – Hello Holidays.

But after nearly five decades of enjoying the leadership position in the luggage business, why has VIP Industries chosen to revamp its most iconic brand, VIP Bags, now? In a candid chat with Fortune India, Sudip Ghose, MD of VIP Industries explained the motivation behind the massive revamp exercise.

“If a brand has been around for around 50 years, in order to stay relevant to the young consumers, it has to keep reinventing itself,” Ghose said, adding that over the years, VIP Bags had come to be seen as a little old. “But as a brand, the trust and dependability for VIP Bags is huge. So we just wanted to make it more relevant to the youth so that the brand can stay strong for another 50 years.”

Ghose explains that not only has the look of the logo and the marketing campaign changed, but the products have undergone a revamp as well. “When you mention VIP the picture that comes to mind is the bulky suitcase. But the consumers today want lighter luggage. So that’s what we are offering them, trendy colours, lightweight luggage and new duffle bags,” he said.

But the look isn’t the only thing that’s new in these offerings; Ghose said the company conducted market research to find out exactly what it is that young Indians who travel with their families need from their luggage. The results, Ghose said, allowed the brand to understand why consumers were asking for the things that they were. “We tried to listen to what the consumers need. We found that a little extra zipper on a bag goes a long way for some last minute packing, and compartments to keep clothes more organised.”

And this is exactly what the brand has tried to convey with its slick marketing campaign starring one of Bollywood’s power couples – Kareena Kapoor Khan and Saif Ali Khan. The advertisements, which focus on the convenience and the functionality of the bags, also feature a child actor who plays their son in order to drive home the message of being family-friendly.

Needless to say, the sleek new advertising campaign drew a significant cost, but Ghose is looking at it as more of an investment which will bear fruit going forward. “The campaign cost us a bomb. We are not leaving any stone unturned. We spent around 100% more than what we usually spend on an ad campaign,” he revealed, adding that the commercials were shot in South Africa.

In fact, Ghose himself was on location during the shoot. “I was too scared to stay away,” he says.

Explaining why VIP Industries chose to give its flagship brand a makeover now, Ghose said the company felt it was the right time. “Earlier the company was heavily dependent on the brand VIP. It was the main pillar of the company. So making changes to that pillar was dangerous. But we’ve erected more strong pillars in Skybags, Caprese and Carlton. Now the building doesn’t depend on that single pillar and this is the time to make that pillar stronger,” he explained.

For any brand, a revamp of this scale is a time-consuming exercise; even more so for a legacy brand like VIP. “People are very emotionally attached to this brand. So it took some time to make the journey from looking at the company and taking decisions emotionally to doing so rationally,” Ghose elaborated, adding that he worked very closely with chairman Dilip Piramal and his daughter and vice chairperson Radhika Piramal on the revamp.

The question to ask now is -- will it pay off? VIP Industries saw a significant drop in its EBITDA margins in the third quarter of FY19, falling to 8.8% from 12.7% in the previous quarter. Analysts had expressed concerns over the contraction in margins. However, Ghose believes an uptick is just around the corner. He was confident that from the first quarter of FY20 onwards, margins would bounce back on the back of a busy wedding season and a roadmap to hike prices going forward.

“There are a lot of auspicious days for weddings this year and weddings mean good business for a luggage company like us. So I hope we should still be able to see a growth of 20% plus this year,” Ghose said.