Named after the biblical strongman Samson, travel luggage manufacturer and retailer Samsonite was founded in Denver, United States in 1910 and since been renowned for its high-quality and durable luggage.
With over 100 years of experience, the company is known for its high-quality and durable wide selections of innovative luggage. Samsonite also owns several other popular brands including American Tourister, High Sierra, and Lipault, making it the global market leader for travel luggage.
The company has changed ownership a few times, counting former Louis Vuitton’s CEO, Marcello Bottoli, as one of its past owners. In 2007, Samsonite was bought by private equity firm CVC Partners for $1.7 billion and the company raised $1.25 billion in an IPO in 2011 in Hong Kong.
But no company is without its own struggles to the top.
Samsonite counts Asia as its biggest market as China alone contributed to a quarterof the group’s sales ($124 million) in the first half of 2016. However, that number was 5.2% lower than the same period last year due to an economic downturn, and the shift to ecommerce.
“In many of our key markets, our traditional channels of distribution have begun a painful process of adjustment to the shift in business online, and the implications for scale and type of retail estate,” said Samsonite’s Chairman, Timothy Parker.
Working with third-party platforms also proves to be tricky for the company as it attempts to protect its brand value by limiting the discount tactics used by ecommerce platforms to entice buyers to shop.
“We don’t want to grow ecommerce at the cost of our current model,” explainedSamsonite International CEO Ramesh Tainwala.
“We have to explain to the ecommerce players that they are offering enough advantages to consumers through convenience, through range shopping.”
The company is also aiming to double its luggage market share, where 50% of the volume is dominated by private label and unbranded sellers, by diversifying its portfolio and shed its stiff luggage manufacturer image.
“It’s [Samsonite] synonymous with luggage but we’re diversified into business backpacks, casual backpacks, and accessories. But we haven’t done a good job of telling that story,” said Stephanie Goldman, Senior Director of Brand Communications. Samsonite needs to find a better strategy for its marketing and distribution channels.
“Consumers are spending, but they are spending more carefully, and looking for value. And one place that value is available is online,” said Samsonite’s Chairman, Timothy Parker.
Using China’s favorite messenger app WeChat, Samsonite utilizes social media to drive traffic to its brick-and-mortar stores and offer discount coupons to its followers. The initiative has succeeded in boosting 5% in offline sales.
The company launched a marketing campaign with a tagline “We Carry the World” where it featured travelers using Samsonite products to show audiences its universal definition of “travel gear”.
Working with Connelly Partners, Samsonite USA also featured various influencers to advertise its business bag collection in its #WorkNotWork campaign and chose individuals with unconventional jobs like athletes, chefs, artists, and fitness gurus as brand ambassadors.
“Work nowadays can look much different from a typical 9-5, and we demonstrated the love that people actually have for their craft, and the hard work they put into it on a daily basis,” said Alyssa Toro, Chief Creative Officer of Connelly Partners.
And in terms of corporate management?
“Samsonite has no head office — I am a CEO but I have no head office. I just have a room everywhere I go. Our business is not top-down. Our business in Japan is headed by Japanese and 100% of employees are Japanese. Our business in China is run by Chinese, 100% Chinese. We never move people from one country to another. So it is only myself — I am an Indian and work everywhere,” tells CEO Ramesh Tainwala to Nikkei Asia Review.
To boost its digital retail distribution in Asia, Samsonite launched what it called a “three-pillar” strategy.
The company works with popular third-party sellers in the region such as Tmall and JD.com – these platforms now account for 60% of Samsonite’s online sales in China. In Southeast Asia, the company is selling its product in the region’s biggest marketplace Lazada. The company also selling through the digital outlets of shopping malls and department stores.
The third phase of its strategy is to further expand its own direct channels so more consumers in Asia can shop directly via the brand. As of right now, the company’s online channel only available in developed markets such as North America, European countries, Australia, and Japan. In June 2017, the company has acquired eBags, a Colorado-based online bag retailers, for $105 million to accelerate its direct-to-consumer plan.
“We are finding more and more that the online and offline shopping experience for consumers is getting blurred,” Samsonite CEO Ramesh Tainwala says. “eBags is strategically the most important acquisition for Samsonite over the past 20 years.”
Through eBags, the company will expand to Europe and Asia and launch in India next year.
“At present, we have over 350 stores in India. We plan to open additional 50 stores by the end of this year. We are expecting a 12-15% growth in sales. This will be in line with our past growth trends,” said Samsonite President, Asia Pacific, Subrata Dutta.
Not only does omnichannel seem to be in Samsonite’s cards, the company has been busy acquiring other brands as acquisition seems to be the company’s favorite strategy to grow its portfolio.
“When we acquire a brand, it must have a very clear DNA, clear story and clear strength of its own,” said CEO Ramesh Tainwala.
The American major is expecting a 20-25% sales contribution from its ecommerce channel in the next few years as it undergoes the same business evolution that many traditional retailers have faced in the age of Amazon.
It’s also looking to emerging markets such as India and the Philippines.
“The Philippines is the No. 1 growth market for us. They all speak English, they travel abroad and their income level is increasing. Their governance has improved, and that makes people more confident to spend. That’s helping our business a lot,” said CEO Ramesh Tainwala.
The company has clearly demonstrated that it isn’t afraid to try.
By owning brands that speak to a variety of consumer segments such as luxury travel, everyday work bags and a line dedicated to offset its masculine brand and attract females, Lipault Paris, Samsonite is very likely to grab even more market share, especially seeing as there is no close competition in sight.