Organised Luggage Industry Faces Decline Amid Expanding Competition

The organised luggage industry is expected to experience an 8-10% revenue growth decline this fiscal year, primarily due to a high base effect after doubling in size over the past two years. Factors such as increased competition, aggressive pricing, and rising inventory levels are impacting margins.

According to a recent report, the revenue growth of the organised luggage industry is projected to decrease by 8-10% year-on-year this fiscal year. This decline is largely attributed to the high base effect, as the industry almost doubled in size between 2021-22 and 2023-24.

Despite the projected decline, demand remains stable, supported by the growing penetration of hard luggage, as well as steady tourism and corporate travel. However, increased competition has led to aggressive pricing strategies, impacting average selling prices, particularly in the economy segment.

The report highlights that the organised luggage industry's margins have been affected by falling realisations, with operating margins declining by 150 basis points in 2023-24. Yet, some impact has been offset due to increased domestic manufacturing of hard luggage and stable raw material prices.

(With inputs from agencies.)