I researched into the Chinese (PRC) Affordable Luxury Luggage & Travel Baggage Market, as one of our top brands, JUMP Paris, competes in this space.

Samsonite is one of the most dominating luggage brands currently in the marketplace, with its diverse product offerings (suitcase and soft travel bags) and massive marketing budget. Samsonite operates as the largest luggage brand in the world, taking a significant market share of China’s suitcase and travel luggage industry (6/30/2017 TTM net sales ~ ¥1,684 million in PRC / ~¥912 million in HK). Just a quick search online yields evidence to Samsonite’s immense investment into China, hiring some of this generation’s most famous local celebrities, which most likely, don’t come cheap.

“Samsonite International SA, the world’s largest branded-luggage maker by market share, is pinning its hopes on e-commerce and social media to fuel growth and make China its biggest market within five years.”

Samsonite’s CEO, Ramesh Tainwala, claimed its sales in China are likely to double by 2022 driven by the dramatic rise in travel by Chinese. As a result, the opportunity for us isn’t just to win over existing customers from mature competitors, but to take advantage of the continued expansion of market opportunities in the travel market, winning new customers.

In China; Samsonite, Rimowa, and Tumi are the most popular, high-end suitcases. Starting from anywhere from 2,000 RMB for “budget luxury” lines, to well exceeding over 8,000 RMB for high end models; much higher than its average price in more mature markets and commanding higher margins.

However, not all popular global brands have had the same “luxury” marketing strategy for their brand in China. Another popular French luggage brand broke into China’s market by pricing cheaper compared to competitor prices. To remain profitable, the brand sacrificed material quality (SKUs on JD.com can be found online for 299RMB, prices about the same as budget grocery store Chinese brands). Now in China, the brand is known as a cheap, affordable brand; a contradicting label compared to its more luxurious global brand.

Cheap no-name Chinese brands will always be a tough competitor in China, however, there’s always a reason why the products are so cheap, quality is always sacrificed. Being able to sell a suitcase for 199 RMB at retail price makes you wonder what day that suitcase is going to fall apart.

Price is key in selling, but there’s no right answer, whether you want to sell in volume at a cheaper price or generate higher margins at a higher price, the customer will always pay what they deem to be a pair price for the product or brand. However, this leaves a sizeable gap in between these two price points that brands such as JUMP can take advantage of.

OMEIA’s strategy for JUMP is to keep its pricing strategy the same as in Europe (mid-upper) – in-line with its “global price;” while marketing its history, quality, and French style to attract consumers. This strategy aligns with the core values that have made JUMP successful in its local markets. A strategy we’re confident that’ll push JUMP to new heights in the Chinese market.

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