Samsonite regional leader prefers the realistic approach

Ramesh Tainwala is someone who relates to the spiritual even in business, embodying his personal values of a “triple bottom line”: people, planet, and profit. It’s a lesson for marketing and, indeed, life. In the Middle East, which he oversees in addition to the Asia-Pacific region, the authorities told Samsonite  it was the only Shariah-compliant advertiser. Although this means the luggage brand ends up running campaigns especially for Muslim countries, it has helped the business in Malaysia and Indonesia. Tainwala claims it has helped raise the brand’s credibility above competitors there.

“I proposed that after getting intrigued by Islam,” Tainwala says, warming up rather quickly on the topic of spirituality. There are commonalities in Islamic religious practices, and even tastes and buying habits between Indians and Arabs — that led Samsonite to include Central Asia and Africa in Tainwala’s Middle East remit. “That’s how we are organised internally. Many companies put Middle East and Africa under the EMEA regional designation, but we felt these markets have more similarities with Asia than with Europe,” he says. 

 In terms of revenue, Asia is the fastest growing part of the pie at 40 per cent (the US accounts for 35 per cent, Europe 25 per cent) for an obvious reason: wealth has shifted to the region. That correlates with why Asians are suddenly much more confident of their identities, Tainwala says. 

In the past, Samsonite had more global products that were sold across the world, but now they tailor more to their various markets. And they want their luggage to be seen as less utilitarian and more about personal statement. Functional attributes, such as a security lock, are still important, but apparently not as important as “the proud feeling you get when you carry this luggage and everybody’s watching you”, according to Tainwala.  “When I was growing up, it was more of standing in — conformity to the group. And when I started working at Samsonite 18 years ago, almost 85 per cent of our sales were black. Steel grey or navy were the most exciting colours we made then. Now black sales have dropped to 10 per cent,” he says. Consumers are willing to experiment more with colours and shapes, so Samsonite made a product nicknamed “Marshmallow”, an edgy (if one can apply the term to a suitcase) piece of “sittable” luggage yet to be launched. “It was as if we’ve flashed back to the 60s, when my brother wore green trousers and had long hair. Even serious Goldman Sachs guys tell me they want to buy the Marshmallow,” Tainwala laughs.

 Product-driven ads for Samsonite Red and Black Label feature actors Song Joong Ki from Souh Korea and Chen Dao Ming from China. “Young men want to be like Song Joong Ki so young girls will gush over them, and older men want to be like Chen Dao Ming so they are associated with taste.” 

When asked to respond to criticism about recent Cannes-winning Samsonite ads being conceptual rather than consumer-oriented, Tainwala admits they made a bigger impact on industry professionals than the public. “The average consumer doesn’t have the mindset of the jury at these advertising festivals, and doesn’t understand the creative process. It’s like a Picasso painting. An ordinary person looks at it and asks ‘why is it so expensive?’, whereas an art critic will be wowed by its greatness.”

 Tainwala’s business proposition is pragmatism: if a consumer doesn’t get it, why spend money on media buys? Comprehension among target audiences for the celebrated ‘Heaven and Hell’ print ad, which earned JWT Shanghai the Grand Prix in the 2011 Press Lions category at Cannes, was less than 1 per cent, though it was “visually very nice”, according to Tainwala. 

“They just care about whether the luggage is durable, and if flight prices are going to come down,” he says. “We can’t just depend on impactful Cannes-winning ads all the time; there are the shareholders to please and the quarterly results to report, so simpler product advertising that overlaps with overall branding is needed”.

 Tainwala does dole out the cash, not for the lofty award ambitions of advertising agencies, but for worthier causes. He started the Tainwala Foundation that focuses on education for girls and environmental preservation in India, Africa and China. One partner was the Happy Feet Foundation that gives shoes to poor children living in mountainous regions. “I have put [a large proportion] of my wealth into it. When I look at the expressions of the children receiving those shoes, it is way better than Samsonite’s share price rising 10 per cent,” he says.

 That stellar performance would make any investor drool, of course, and Tainwala has opted for short-cut growth through acquisitions. Samsonite, over time, has become one of the few companies in the durables segment to achieve reach comparable to the fast-moving consumer goods sector. “Now we’re using that big machine to convert ourselves from a single-brand, single-category luggage-tailer to a multi-brand, multi-category one, with the same platforms of designing, sourcing and distributing.” He believes the approach will be more effective than organic growth, and will allow Samsonite to expand faster than its closest listed rival Tumi. 

The Samsonite brand primarily targets business travellers and occupies the mid-range segment. “We have nothing in the affordable-luxury level, and can’t reach it with Samsonite, because our size itself is a hindrance to exclusivity,” Tainwala says. Samsonite has close to 3,000 points-of-sales in Asia, and with such wide distribution, is not seen as prestigious or luxurious as Tainwala would like it to be. The newly-acquired US brand Hartmann fills that gap. 

His intention is to introduce it to other parts of the world where the premium brand is weaker: China, Korea and Japan, primarily because these are the markets that are “ready to buy luxury”. And since the company has the financial capability to spend as much as US$1 billion on acquisitions, Tainwala sees Samsonite becoming a “house of brands” in the next five to seven years. All the brands, including American Tourister and High Sierra, will be treated differently in terms of the design and marketing support they get. “It’s like parents bringing up more than one kid: you have to create an environment for each to flourish in his or her own way and still retain their distinct personalities,” he says. 

Be it managing sub-brands or markets, it’s telling that Tainwala has learnt his lesson about parenting. Japan was Samsonite’s number-one market in Asia (second in the world after the US) until 12 years ago, when the management decided to terminate the partnership with the country’s licensee. “From a $150 million dollar business to a $3 million one — we almost killed it,” he recalls. “Back in those days, our global design director said the products for the Japanese market were ugly. We tried to sell what we felt were better products, but the Japanese didn’t like them. They can’t figure out why our luggage wheels were so big. In Japan, ground surfaces are very smooth so they are used to a maximum wheel diameter of 15 millimetres, whereas our wheels were three inches across, designed for European cobblestone streets and American subways,” he says. 

 There is an easy conclusion to this: consumers are more different than they are similar. So as long as Tainwala addresses this, the final report card may be worth it, even if the general go-to market process is lengthened from one year to one-and-a-half years. As self-contained as Tainwala is, who operates mostly on the road as he travels almost 25 days in any given month, he still draws inspiration from customers and competitors alike. “We don’t want to be an inward-looking company”.