Baggit, which has been within the purse enterprise for 3 a long time, has now set its sights on the mass market. Nina Lekhi talks to Venkata Susmita Biswas about introducing an reasonably priced vary of purses to offer “Chinese products a run for their money”, foraying into the journey baggage section, and extra.
Baggit is at present providing a 60% low cost on its web site. What’s the form of restoration you’re seeing in gross sales, after the stoop final yr?
While the monetary losses are plain, we’ve got been engaged on stimulating demand and bettering gross sales month on month. One of the important thing modifications through the yr was that we shifted our focus from offline retail to on-line platforms to drive gross sales. At the tip of January, our gross sales quantity is 80% that of January 2020; and in worth phrases, it’s at about 70%.
Our common promoting worth has dropped, as our common low cost has elevated by 7-8%. We have needed to low cost our merchandise as a result of we wanted to offer patrons, who’re presumably shopping for their fourth or fifth bag, a motive for buy. Since September, we’ve got seen a gradual revival. For occasion, in August, we have been at 30% of 2019 stage. As we start FY22, we count on to return to pre-Covid stage.
How a lot are on-line platforms contributing to your total gross sales now?
We now earn about one-third of our gross sales from e-commerce platforms. As offline retail picks up tempo, our e-commerce gross sales will settle at 25-30% of total gross sales. We are current in 400 multi-brand shops, 64 unique model shops and 500 mom-and-pop shops. Offline retail will proceed to be a robust gross sales channel for us.
How do you propose to develop the enterprise, provided that individuals are much less inclined to buy equipment throughout these occasions?
Going ahead, we don’t need to low cost the model. We are reengineering our design and fabrication processes to guess on giant volumes by decreasing the typical promoting worth. We are rediscovering ‘Bharat’ or middle-India, the place the patron has restricted budgets and none of the present manufacturers are catering to that demand. This is a market the place a purchaser is probably not prepared to spend Rs 2,000 on a purse, however are searching for sturdy merchandise for about Rs 700. At this worth level, we give customers — who have been presumably shopping for unbranded merchandise from roadside sellers — an possibility to purchase a branded product that may final seven to 10 years at a pocket-friendly worth. Our estimate is that the chance within the mass market is thrice that of in city cities.
How do you intend to straddle the Rs 700 to Rs 3,000 worth factors?
We plan to introduce a brand new model, tentatively by autumn-winter. Once we crack this mass market, we can provide the imported Chinese merchandise a run for his or her cash. As this market is probably not greatest served via on-line — since customers might not have bank cards, web entry or different instruments for on-line procuring — we plan to tie up with worth format stores reminiscent of Spencer’s and Metro Cash & Carry, to distribute our merchandise.
Baggit has at all times focused on purses and wallets. Will you be foraying into different product classes?
We might add journey baggage, each the trolley variety and backpacks appropriate for solo journeys and mountain climbing, to our combine. This is to cater to the rising demand from kids who journey for pleasure and journey.
Your newest advertising and marketing marketing campaign positions Baggit as a ‘Made in India’ label. How massive a promoting level do you suppose that is, contemplating Xiaomi, a Chinese model, has remained unaffected regardless of the unfavorable sentiment?
I imagine the query is whether or not a client has the emotional attachment to purchase an Indian product if all different parameters are the identical. If a Chinese product is superior in options and worth, naturally the patron has fewer incentives to decide on an Indian product. We need customers to purchase Baggit merchandise as a result of they’re higher than Chinese merchandise, and produced regionally; not simply because they’re made in India. Therefore, we’re focussing on making sturdy merchandise, and aiming at reducing the typical promoting worth by rising scale.