The growing demand for smart luggage equipped with various technological features such as utility in the baggage and provision for increased level of security is expected to revolutionize the global luggage market in the coming years. The global luggage market is expected to expand at a CAGR of 5.8% during the period between 2014 and 2020 and reach a valuation of US$43.4 bn by 2020. These luggage products are particularly popular among the HNWI population. Connectivity features added to the luggage make them easy to trace and more secure while travelling. Nowadays, smart luggage is equipped with features such as bluetooth-enabled lock, Global Positioning System (GPS), and a USB port for recharging electronic devices such as mobile phones.
Key Players in Global Luggage Market Face Stiff Competition from Unorganized Players across Developing Countries
Unorganized luggage market across the developing countries such as India and China has emerged as a key challenge for the enterprises operating in the global luggage market. Counterfeit products launched by the local players at cheap prices in these regional markets are cutting down the profits of the global players. The local unorganized players are able to offer their products at low costs as they save on the costs of raw material, advertisement, branding, and research and development. The low and medium-income populations in developing countries are the largest consumers of such relatively inferior products.
The key players in the global luggage market are launching new product lines with advanced features. For example, in March last year, Samsonite announced the launch of GeoTrakR, a new line of suitcases equipped with a cellular-enabled baggage tracking system. The U.S.-based luggage manufacturer ANDIAMO Luggage LLC, has launched a baggage line with battery charger, Wi-Fi Hotspot, and other features. Rimowa GmbH, in partnership with Airbus Group and Deutsche Telekom AG, is developing Bag2Go, a smart suitcase line that would interact with sensors in the cargo holds of Airbus aircraft to identify their location.
Latest Development in Global Luggage Market: Samsonite Acquires Rival Tumi Holdings
Some of the prominent brands in the global luggage market are Tumi Holdings Inc., Samsonite International S.A., VF Corporation, VIP Industries, Rimowa GmbH, Briggs & Riley Travelware, Louis Vuitton Malletier S.A., MCM Worldwide, Goyard, and ACE Co. Ltd. The key players are focussing on developing smart luggage while looking out for acquisitions.
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This week, Samsonite International confirmed that it has agreed to acquire rival Tumi Holdings Inc. for US$1.8 bn. This is Samsonite’s biggest acquisition since listing its shares in 2011. Samsonite is the largest luggage manufacturer across the globe. Through this tie-up, the Luxemborg-based company will gain a foothold in the premium luggage segment while Tumi Holdings will get a chance to expand across Europe and Asia with the help of Samsonite’s distribution channels.
It is estimated that after the deal, Samsonite will gain a combined share of 14% in the overall luggage market. In the past, Samsonite has acquired other high-end luggage makers such as High Sierra, Rolling Luggage, and Hartmann and Lipault.