"Samsonite is not luggage brand but travel solutions brand”
What brought you to Nepal this time?
I occasionally travel to India because I have a team of designers and engineers there. Whenever I am in India, I like to extend my visit to Nepal as well because Kathmandu has a mystic meaning in the west and I take visiting Nepal a great opportunity.
Also Nepal is an emerging market for Samsonite. It is interesting to come along and see the differences in regional needs, in country needs etc.
What does your position of Global Creative Director actually mean?
I joined Samsonite in February 2005. My role was to promote the brand. Samsonite then was a regional brand with different products in different countries. Now our products are gradually becoming global. When Samsonite started in 1910 it was a luxury brand because at that time traveling was luxury and very few people used to travel. Such practice was there till 1980s. Then we saw the arrival of budget airlines and more people began to travel. As a result, luggage became a commodity -a price driven product. So, we decided to offer premium service to the customers. Previously, the market used to have three levels – the low-end, mid-end and high-end. Now there are four levels with ‘luxury’ added above the high-end. We belong to the luxury-end because we are offering premium service. So, the idea behind my involvement in it was to pull out, in certain areas, from the commodity market and upgrade to a more lifestyle brand.
One reason people choose to buy Samsonite is because it is very reliable, durable and has good quality. But now the new generation people look not only upon these attributes. Instead they want something very fashionable that touches their heart. So we decided to be more fashionable. Most of our products previously were black and grey. When we wanted to be more fashionable we made it dark blue. But we never went beyond that. I was brought into Samsonite to make it more fashionable. I want to get inspiration from different cultures like that of Nepal to make our product more fashionable.
How has the experience of Samsonite in Nepali market been?
Nepal is an important market for us. We have been here for the last six years. The first two years were good. But later we had trouble years of two or three. Now we feel it’s right time to really go up. In the western world today there is nobody who doesn’t want to come to Nepal at least once in their lifetime. Our assessment is that in the next two years, there will be an explosion of tourism in Nepal. We have now four stores and one shopping place at Bhat Bhateni. We want to work out how we can expand our market beyond Kathmandu.
How do you accommodate cultures from different countries in your product?
We did some big research in the ethnography reports from three regions - the US, Europe and Asia. We wanted to know what the consumers there want in their luggage. There were differences but generally there were similarities on most important things. Based on this finding, our main aim is to make travel as easy as possible. I am a very visually stimulated person, with culture, with colours, with decorations and the like. We are trying to add some emotions to our products. We have a multinational design team representing 12 nationalities from Asia, Europe and US. We don’t really call ourselves a luggage brand anymore; instead we call ourselves a travel solutions brand.
What are the new offers from Samsonite for the Asian customers?
We normally launch one collection every three months. We have a number of projects. In Asia, everyone focuses on light weight luggage. We will be launching specially focused light weight suitcase that looks really attractive.
In how many countries do you have manufacturing operations?
Today we have manufacturing operations in 13 countries. Two of our largest manufacturing centres are in Belgium and India. Apart from these, we have manufacturing facility in Vietnam, China, Thailand, Mexico etc.
Do you have any plan for manufacturing in Nepal ?
Three or four years back we did look at it. To be honest, the reason was tax benefits. The size of the Nepali market is so small that it can’t sustain manufacturing. Manufacturing here made a sense then because of preferential duty arrangement between Nepal and India. But that arrangement is speedily changing. We can take the benefit of cheap labour in Nepal only when there is a free movement of goods to India from Nepal.
Then what are Samsonite’s plans for Nepal at present?
We want to increase our footprints in terms of retail store. We have a plan that in the next 18 months we should be able to add six more stores. We will make an aggressive introduction of our second brand “American Tourister”. On the top of it, we have redefined Nepal as one of the high growth countries within South Asia. For us the market with the highest growth potential next to India is Nepal. You will see heightened activities from our side in Nepal in the next six to 12 months.
Quentin Mackay Global Creative Director of Samsonite was in Nepal recently. He talked to the New Business Age. Excerpts:
We’re introducing quick & safe remittance service”
What are your plans in Nepal now?
Currently, we are planning to work in partnership with the Himalayan Bank for facilitating a quick and safe remittance service. We are building network in Nepal in partnership with the Himalayan Bank so that we can provide standard remittance service in a competitive market rate. Our main aim is to provide reliable service to the Nepalis staying outside of the country and at the same time we want to discourage the traditional hundi practice. We all know that the remittance has been the mainstay of Nepali economy since 2004/ 2005. Now a considerable amount of wealth is brought into the country through remittance. In such a scenario we should discourage the hundi as money coming into the country by that process is unaccounted. Moreover, the foreign exchange of such transaction goes to some other countries. Therefore, it is necessary to discourage such a practice.
What kind of agreement are you signing with Himalayan Bank?
We are signing a comprehensive agreement with the bank. Remittance would be a part of it. Besides facilitating remittance, we are trying to facilitate various loans, including the loans for the house purchase in Nepal for the Nepalis residing in the United Kingdom. They have to come to Nepal only for paper formalities for a short time. We would be providing other professional loans to the Nepalis citizens in UK.
How do you compare remittance service of Nepal with that of England?
Remittance service in England is of high standard. It is monitored by Her Majesty’s Revenue and Custom (HMRC) through its regulations. Here in Nepal the Nepal Rastra Bank (NRB) monitors the transaction. But everyone knows that there is an extensive practice of bringing money into Nepal through informal channels like hundi. The government is failing to curb the practice. So, there must be a flaw in the regulations itself.
What sort of regulation do you think the government should adopt?
NRB has its own regulation which is very good on paper; however, implementation aspect of the regulation is weak. For instance, approximately one million pound is sent from UK to Nepal per day, and the entire amount comes through informal channels. As there is no financial institution involved in such a large amount of monetary transaction, the country itself is losing a great amount of revenue as well as foreign exchange. Therefore, the NRB should initiate measures; even it should carry out raids if needed to discourage such practices. The regulation should concentrate on collection of the delivered money in the destination through only registered financial institutions, not from other channels.
Is the remittance service you are introducing in partnership with Himalayan Bank a new concept?
Remittance service itself is not a new concept. There are many institutions registered in UK which provide such service. But we will be the service provider with local partners. Through the agreement with Himalayan Bank we will deposit the collected foreign currency in the Himalayan Bank’s account and the bank would convert it into Nepali currency and deliver it to the beneficiary. By doing so, we can offer a standard and reliable service and the country will benefit from the increase in foreign exchange reserve.
How would your overall service operate?
Actually, we have already been in operation for the last seven months. We are the world partner of the Himalayan Bank and we have already sent more than one million pounds to Nepal. We have established nine contact points in UK in such places where there is a high concentration of Nepali people. A person who wants to send money to Nepal goes to the contact point, deposits the money and acquires a number. The sender then contacts the person to collect the money in Nepal and gives the number. Then the receiver is required to present the number to the Himalayan Bank. The bank would deliver the money after matching the number.
What are your plans to extend your service to the rural areas in the future?
Himalayan Bank has a network of 200 counters throughout Nepal with sufficient access to the rural parts of the country. Nevertheless, in future we may sign agreements with other banks too.
Bikram Joshi, is a Nepali chartered accountant based in London and he has recently started a remittance service to help Nepalis in UK send money to the relatives in Nepal. In a recent visit to Kathmandu, he explained his plans. Excerpts from an interview:
