safari industries vs vip industries

The ups and downs of being VIP

In today’s Finshots, we explore whether VIP Industries is in a sweet spot to capture the tailwinds in the luggage industry

Two things are happening in a big way in India.

• Revenge travel is in full swing. On 24th December, we witnessed the highest-ever domestic air passenger traffic of 4.35 lakh people flying on a single day. The previous high was in December 2019 when 4.20 lakh passengers took to the air. More frequent short holidays, group tours, it’s all happening.
• Wedding bells are ringing. During November and December last year, 32 lakh weddings were scheduled to take place in the country. That alone would have generated ₹3.75 lakh crore worth of businesses for the industry — 50% higher than in 2019.

And when these two industries see a growth spurt, there’s another industry that grins ear to ear too. We’re talking about the luggage industry.

See, when people travel, they need their suitcases, trolley bags, and backpacks, right? And if you’re a keen observer and traveller, you would’ve noticed that the number of pieces coming off the conveyor belt in the past decade has risen tremendously. Gone are the days when a family of 4 travelled with 2 suitcases. Now everyone, including the kids, travels with individual bags.

And if you attended one of those 32 lakh weddings in December last year, you might have noticed at least 5–6 trolleys or suitcases being hauled about. They’re stuffed full with the bride’s and groom’s wedding attires. And not to forget that there’s the luggage that the bride and groom usually take when they move into a new home.

The end result? The luggage industry in India is having one of its best years ever .

And there’s one company in particular that’s poised to benefit from these tailwinds. We’re talking about VIP Industries, a name that’s synonymous with luggage in India. And a brand that dominates the organised luggage market with a 45% market share. In just the first 9 months of FY23, it has clocked the highest net profits in at least the past decade.

But getting here hasn’t really been an easy journey for VIP.

It all began in the 1970s. VIP started its journey with a capital of ₹1 crore and made briefcases priced at ₹50–100 for the office goer. This sturdy grey device was quite the rage for businessmen and political aides back in the day. And obviously, the name VIP gave it an aspirational high-status tag in young post-independent India too.

But things changed. The unorganized market mushroomed in a big way and started creating soft luggage with fabric. VIP specialised in hard luggage back then and didn’t foresee customer preferences changing. And while it launched a sub-brand called Skybags for soft luggage in the 1980s, it didn’t pump in enough money to build a brand and ward off competition.

Its market share began to drop.

Then came the liberalisation wave of the 1990s and it swept the rug from under VIP’s feet. Samsonite, a global brand, stepped into the Indian market. A new India with higher disposable income preferred a foreign brand over an ageing domestic one.

Its market share dropped further.

In between all this, VIP missed the memo that luggage wasn’t utilitarian anymore. It was a lifestyle product and a style statement. People didn’t want to be seen wheeling a boring brand. Luggage had become an extension of one’s personality and people didn’t mind shelling out the dough for what became oddly a status symbol.

And as its chairman, Dilip Piramal put it , “They [the customers’ want excitement. In my own circle, nobody uses a VIP product. In the beginning, I used to be a bit disappointed, but now I realise that if I was not the owner of VIP I would also not use its products.”

VIP’s market share tumbled from the 80% it once used to command to below 50%.

So, in 2008, when Radhika Piramal, the daughter of VIP’s chairman finally took the reins, she had her work cut out. She revamped the VIP image and positioned each brand distinctly. A brand called Carlton which VIP acquired in 2004 became the premium offering. Aristocrat was slotted into the mass market. She even brought back Skybags in 2011 but concentrated on design and vibrancy for the youth.

They also pumped up advertising. It jumped from around 4.7% of sales in FY09 to over 6.4% in FY18. Bollywood actors (Saif Ali Khan, Kareena Kapoor, Varun Dhawan) and Cricket stars (Rohit Sharma and Ravichandran Ashwin) were roped in for TV ads.

It also shifted its focus from selling only through its dealer channel to hypermarkets where people made impulse purchases. And soon enough, an entity like BigBazaar (while it was still around) actually contributed to 15% of VIP’s revenues.

All this meant their product mix also changed. Currently, the VIP brand contributes to 24% of the revenues, Aristocrat has a 32% share, and Skybags grabs the lion’s share with 33%

And you could argue that the runway is long for the company. Despite the introduction of GST, the unorganized market still holds a 60% share of the market. As India’s economy formalises even further, you could see unorganised vendors shrink and VIP will be in a sweet spot to pounce on their business.

The other thing is that the unorganised sector is known for churning out soft luggage variants. And there seems to be an increasing preference for hard luggage these days. Its market share is expected to rise from just 30% today to over 55% in the next few years. So even if GST isn’t the death knell, customer preferences can alter the landscape in favour of VIP quite quickly.

VIP seems to have got everything going for it.

But…there’s risk lurking in the shadows too. And that’s primarily in the form of competition.

We’re not just talking about Samsonite which has a 90% share in the premium segment. Or its sub-brand American Tourister which has captured people’s imagination in the mid-segment. The mass market features Safari Industries which has been around since the 1980s. While it doesn’t probably have as much brand recall as VIP, it doesn’t seem to matter in the mass market category. Safari seems to hit the sweet spot for India’s brand affinity and value pricing. And in the past couple of years, its market share in the mass market segment has risen from 19% to 26%.

Investors seem excited about Safari too. So in the past year, while VIP’s stock has risen only by 30%, Safari has returned a whopping 100%.

The other thing is that VIP’s bets on expansion haven’t played out as expected.

For starters, there’s the women’s handbag brand called Caprese. It was launched nearly a decade ago and it even roped in Bollywood star Alia Bhatt as its brand ambassador. But it contributes a measly 4% to VIP’s revenues. And while the management is certain that it’s a segment that they’re going to put all their efforts into over the next 5 years, the past experience doesn’t inspire a lot of confidence.

VIP’s international plans have also fallen flat. Back in 2017, it said that it planned to increase its exports to make up 25% of revenues, it is still stuck at a measly 5%. And while VIP is making noise about its intention to produce white-label luggage for retailers in the US and UK (which they can stamp with their own brand name), it’s too early to say how this will play out.

So yeah, while there are tailwinds in VIP’s favour, it may not be smooth sailing for the 50-year-old luggage brand.

Until then…

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Ditto Insights: Why Millennials should buy a term plan

According to a survey, only 17% of Indian millennials (25–35 yrs) have bought term insurance. The actual numbers are likely even lower.

And the more worrying fact is that 55% hadn’t even heard of term insurance!

So why is this happening?

One common misconception is the dependent conundrum. Most millennials we spoke to want to buy a term policy because they want to cover their spouse and kids. And this makes perfect sense. After all, in your absence you want your term policy to pay out a large sum of money to cover your family’s needs for the future. But these very same people don’t think of their parents as dependents even though they support them extensively. I remember the moment it hit me. I routinely send money back home, but I had never considered my parents as my dependents. And when a colleague spoke about his experience, I immediately put two and two together. They were dependent on my income and my absence would most certainly affect them financially. So a term plan was a no-brainer for me.

There’s another reason why millennials should probably consider looking at a term plan — Debt. Most people we spoke to have home loans, education loans and other personal loans with a considerable interest burden. In their absence, this burden would shift to their dependents. It’s not something most people think of, but it happens all the time.

Finally, you actually get a pretty good bargain on term insurance prices when you’re younger. The idea is to pay a nominal sum every year (something that won’t burn your pocket) to protect your dependents in the event of your untimely demise. And this fee is lowest when you’re young.

So if you’re a millennial and you’re reading this, maybe you should reconsider buying a term plan. And don’t forget to talk to us at Ditto while you’re at it.

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3. Select Term Insurance

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VIP, Safari Industries: Luggage stocks will take a long time to get going

Market analysts hope the industry would recoup from the covid-19 slump by fy22. historical trends, they say, suggest that luggage industry sales witness strong rebound after two consecutive weak years.

VIP Industries, Samsonite and Safari Industries form nearly 90 per cent of the organised luggage industry – which is only 40 per cent of the entire sector -- in terms of market share.

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How 2Point2 Capital’s bet on Safari got it a suitcase full of returns

Synopsis Under industry veteran Sudhir Jatia, Safari’s topline has recorded a CAGR of 29% over the last decade. In comparison, this stands at 10% for market leader VIP. Despite being a mass-market brand, Safari not only survived the pandemic but also has emerged stronger, eating into the market share of unorganised luggage makers as well as premium brands.

When Savi Jain, co-founder of 2Point2 Capital Advisors, a portfolio management service (PMS) fund, took a bet on Safari Industries in 2016, the company had a market capitalisation of less than INR400 crore. As a value investor, Jain always looks for stocks trading at a lower valuation but have huge potential to do well in the future. He typically hunts for small-cap stocks where he can take a concentrated position for a longer period and wait

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VIP Industries shares underperform: Managing Directors packing their bags drag its wheels

Over the course of 2023, while vip industries has lost over rs 100 crore in market capitalisation, safari industries has added rs 4,400 crore to its overall market capitalisation and is now just rs 1,000 crore less than vip's market capitalisation..

To read this content please select one of the options below:

Please note you do not have access to teaching notes, safari industries ltd. – driving through the fast lane.

Publication date: 28 May 2021

Teaching notes

Learning outcomes.

Understand the external environment and trends impacting customer preferences. Understanding the elements of customer segmentation and positioning for products such as backpacks and travel luggage. Understand the levers for turnaround management. Qualitative evaluation of an opportunity for investment – greenfield versus brownfield. Developing a marketing plan for growth.

Case overview/synopsis

Indian Luggage market has an oligopoly structure with three major brands – very important person (VIP) Industries, Samsonite and Safari Industries Ltd. (SIL), holding around 90% share of the organized market. The market had evolved slowly, with the players offering limited assortment and having limited manufacturing capacities in India. SIL, having been in business for nearly 25 years, had been registering a flat top line. In 2011, the top management shuffle at VIP Industries witnessed the exit of the then MD, Mr Sudhir Jatia. Mr Jatia decided to acquire the majority stake of 56.55% for Rs 29 crores for the struggling SIL. What followed in the subsequent years was the resurgence of SIL to a noteworthy position in the industry. From a merely 2% market share in 2011, SIL went on to hold nearly 16% market share in 2019. This growth in market share, along with CAGR of almost 15% for the luggage market overall, has boosted the revenue of SIL by nearly 10-folds from INR 620m in 2011 to INR 5.73bn in the year 2018. Several reasons had been identified behind the growth of this company, such as – Mr Jatia’s leadership style, focus on profitable stock keeping units, acquisition of other brands, operational efficiency and financial infusion. However, the larger question was that – Will SIL, which had been following a challenger strategy to date, be able to overcome the leaders in the industry? What strategies should it pursue now? And what obstacles can it expect on this anticipated journey of growth?

Complexity academic level

Undergraduate and post-graduate.

Supplementary materials

Teaching Notes are available for educators only.

Subject code

CSS 11: Strategy.

• Marketing strategy/methods
• Turnarounds
• Competitive strategy
• Corporate growth

Acknowledgements

Disclaimer. This case is written solely for educational purposes and is not intended to represent successful or unsuccessful managerial decision-making. The authors may have disguised names; financial and other recognizable information to protect confidentiality.

Tiwari, S.R. and Gupta, H. (2021), "Safari Industries Ltd. – driving through the fast lane?", , Vol. 11 No. 2. https://doi.org/10.1108/EEMCS-03-2020-0088

Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

You do not currently have access to these teaching notes. Teaching notes are available for teaching faculty at subscribing institutions. Teaching notes accompany case studies with suggested learning objectives, classroom methods and potential assignment questions. They support dynamic classroom discussion to help develop student's analytical skills.

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STOCK MARKET BLOG

• Jul 28, 2018

Indian Luggage industry- How the brands stack up?

Updated: Mar 11, 2022

Recently, I was reading an article on Safari Industries in  Outlook Business  that brought my attention to the Indian luggage industry.  The oligopolistic industry consists of 3 players: VIP, Samsonite & Safari with 2 of them publicly listed. Let’s see who Stands where.

The luggage industry segmentation

Before jumping on the company analysis its prudent to get some sense of the industry. Let me start with the types of luggage.

There are primarily 2 kinds of luggage:

Hard Luggage : Made up of  Polycarbonate ,   ABS or Polypropylene.  For Polypropylene, you can think of Old heavy suitcases, Polycarbonate or ABS will be current hard luggage which is sturdy as well as lightweight i.e. modern day hard luggage trolley bags (Images below). Consists of rolling totes, travel bags etc. To add to the above all these three materials are derivative of crude oil. 

Soft Luggage: Made up of Vinyl, Polyester & Cotton.  Consists of Backbacks, Duffle Bags, Shoulder bags etc  

Soft Luggage Vs Hard Luggage

How is the Indian luggage industry shaping up?

Indian Luggage Industry

I will delve a little into the CSD segment which is a significant contributor of sales.

CSD stands for Canteen Store Department. It comes under the Ministry of Defence & meant to provide quality goods at low prices for the armed forces & their families. 

How does these Canteen Store Department (CSD) work?

Retailers have to sell the product at the lowest cost. Can’t sell below this price anywhere

Sales tax is exempted

Although the company has to sacrifice on the MRP front but the cost of distribution is almost Zero making up on the lost MRP.

Chairman of VIP industries Mr. Dilip Piramal in a conference call with analysts talked about the not so bright future of this segment. Because of the misuse of CSD for commercial purposes & government losing out on taxes, they are slowly winding these CSDs down.

Lets look at the top players of this oligopolistic industry?

Market Share- Organized Indian luggage industry

Organized luggage industry is dominated by VIP with a market share of 50%+, followed by Samsonite & Safari. Safari led with ambitious new management has rapidly increased their market share in the last 5 years.

While the market share of Samsonite is on a decline given their focus on profitability & the growth of Safari is mostly at the lowest of the transition of Unorganized–> Organized.

Let’s look at how these brands stack up?

VIP Industries Ltd

Brands of VIP Industries

VIP Industries is the market leader with a market share of over 50%+.

Very strong brands having the mindshare in each category.

The company is spending aggressively to create a brand recall in each category.

To deal with the rising cost in China, the company has set up 3 manufacturing facilities for Soft luggage in Bangladesh and that is running at 100% capacity.

S afari has hit them primarily in the CSD segment but as per the recent management call, it seems VIP is striving hard to get it back.

Brands of Samsonite

Samsonite is the 2nd largest player with a market share of 35%. 

Its brands are equally strong. But what I found from my research & what the numbers reflect is that Samsonite is more focused on profitability rather than growth. Because of this, their market share has been shrinking. 

VIP is making similar bags but at a price tad below them to capture the market share.

Coming to manufacturing, the company manufactures hard luggage at its Nashik facilities.

Samsonite financial performance

Safari Industries Ltd

The third largest player with a market share of about 14-15%.

New management under Sudhir Jatia acquired the company from the promoters in 2011. Sudhir Jatia had 22 years of experience in the industry with a few years as the Managing Director of VIP industries, the second largest luggage brand in the World.

Coming to the brand Safari:

Other than ‘Safari’, other brands names are unknown. 

Their website doesn’t have the names of brands to make people aware that it belongs to ‘Safari’. 

Even the names of the acquired brand Genie, Genius, Magnum sounds of very low quality.

Given the low competition in the school bags segment, Safari industries are trying to gain a foothold with the acquired brands ‘Genie’ & ‘Genius’

Although, the growth of the company has been exceptional but it has come at the cost of profit. Selling at a discount as well as pushing sales in CSD.  Because of the low profitability, the company has raised external capital from Tano Capital & Malabar fund to continue the sales growth.

However, 2018 can be said a different year where the profitability, as well as other margins, have improved. Given the very little information, the company’s management provides, it very difficult to gauge & understand what the company has been doing. Hopefully, the annual report of 2018 might throw some light.

Primary research:

I went to a few stores as well as searched into e-commerce platforms. This is my take on the 3 brands:

1. VIP & Samsonite dominate the store as well as front space. Safari has minor presence & is even absent in many stores.

2. I came across Safari Magnum Bags. Designs were bland compared to designer Skybags at the same offer price.

3. Even across the e-commerce platforms, its dominated by VIP & Samsonite brands with a very small presence of Safari thorium trolley bags getting some visibility.

Comparison- Financial performance of VIP, Samsonite & Safari

Based on the figures in the ‘Financials’ segment, you can find the below:

Safari leads in terms of sales volume growth.

All other segments such as EBITDA, PAT & Cash flow is dominated by VIP.

Samsonite’s financials are available only till FY16 in the database I use, from it it’s quite obvious that the margins are quite good but the growth is getting stagnant.

Safari has gained a lot in the last 4-5 years but that’s mostly on discounting rather than any branding. My two cents would be that the further growth would be very difficult.

I would personally think that VIP with its very strong brands & aggressive push would be the one leading the pack.

For luggage business, the biggest proxy to look at the air traffic growth.

VIP Industries: Q1’FY19 Quarterly Result Analysis

VIP Industries Vs Safari Industries- Q2 FY19 result comparison

VIP Industries Vs Safari Industries : Q4 FY19 Analysis

VIP Industries Vs Safari Industries- Q1FY20 result analysis

VIP Industries Vs Safari Industries- Q3FY20 Analysis

VIP Industries Ltd & Safari Industries Ltd- Q1FY21 Analysis

Shekhar Yadav

#SamsonitevsSafari #VIPIndustriesanalysis #SafariIndustriesanalysis #SamsoniteIndiabrands #Indianluggageindustry #VIPIndustriesbrands #VIP #luggageindustry #SafariIndustriesbrands

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Poor Economic Outlook and Lack of Security Undermine Kabardino-Balkaria’s Governor

Travel Tips to Kabardino-Balkaria: More than Mt. Elbrus!

If you’ve traveled to the North Caucasus before, there is a good chance you’ve already been to Kabardino-Balkaria, and you didn’t even know it!  Kabardino-Balkaria lies in the center of the North Caucasus region, is home to Mt. Elbrus, but more than that is a treasure chest of travel possibilities.  Here is our guide to traveling through the republic of Kabardino-Balkaria, or 9 travel tips to this beautiful land:

1. How do I get there?

Kabardino-Balkaria hosts a large number of both foreign and Russian travelers every year, and has an improving infrastructure able to handle the incoming masses.  Let’s start with the obvious.  You might be a mountain climber or skier coming to enjoy the slopes of Mt. Elbrus.  That means you’re likely arriving on an airplane to Russia.  Here are your travel options:

A. Plane – We advise you fly into the Mineralni Vodi (MRV) airport in the Stavropol Region, which is about 45 minutes from the border of Kabardino-Balkaria.  MRV is the largest airport in the North Caucasus, and has daily direct flights to and from all 3 airpots in Moscow (SVO, DME, and VKO), direct flights from St. Petersburg, and several international flight routes as well, including from Istanbul, Dubai, Greece, Tel Aviv, and Bishkek.  The MRV airport has a growing infrastructure and is the most obvious choice to fly into if going to Elbrus.  From MRV, it’s a 2 hr. drive to Nalchik, and a 3.5 hr. drive to Mt. Elbrus.

That being said, the capital of Kabardino-Balkaria, Nalchik (NAL), also has a small regional airport with a daily flight to/from Moscow as well as weekly flights to Istanbul. As is to be expected in most smaller, regional airports around Russia, the service standard at a small airport like this will be minimal.  As a result, we recommend you flying in and out of MRV if able.  It’s a 2 hr. drive to Elbrus from Nalchik.  You can also fly into other regional airports which are 2 hrs. from Nalchik, such as OGZ in North Ossetia (Vladikavkaz) or IGT in Ingushetia (Magas).

B.  Car/Public Transport – If you have a car, are using a taxi, or are hitch-hiking your way to Kabardino-Balkaria, the region is accessible by a variety of roads and vehicles.  A major Russian federal highway E50 runs through Pyatigorsk into Kabardino-Balkaria, and can take you towards Mt. Elbrus, Nalchik, and deeper into the North Caucasus.  There are daily mini-buses, or “marshrutkas”, that travel to Nalchik from Pyatigorsk, Vladikavkaz, Grozny, and Magas, if you’re coming from a neighboring republic.  From the main Nalchik bus station, there is a marshrutka that goes to Terskol (i.e. Mt. Elbrus) daily around 12:30 pm; for that matter,  marshrutkas run daily into every valley of this beautiful republic.  For the seasoned international traveler, you can drive from the country of Georgia up the famed “Georgian Military Highway” through the heart of the Caucasus Mountains, cross the border into Russia at the “Verkhni Lars” border stop, and be in Nalchik in about 2.5 hours as well. 

Anyone traveling on their own should download the “Yandex” taxi app, which is Russia’s version of Uber, and has a very user-friendly app with affordable prices.  In smaller villages/towns where Yandex’s service doesn’t reach, just ask a local and they’ll direct you to a friend or relative who can taxi you where you need to go!

C.  Train – Kabardino-Balkaria is also very accessible by the famous cross-country Russian train system if that’s your preferred method of travel.  Almost all trains to the North Caucasus pass through Mineralni Vodi in the Stavropol region to the north, so make sure wherever you are coming from, Mineralni Vodi is one of the stops.  Despite Nalchik having a train station, the city is about 45 minutes from the main railway route that runs diagonal through the North Caucasus, and as a result it’s a bit convoluted to get a train directly to Nalchik.  That being said, the town Prokhladni is a regular stop on trains going to/coming from Baku, Makhachkala, Grozny, Nazran, and Vladikavkaz, so you can always hop off there and find your way by public transport or taxi.

2.  What are the best places to stay?

This list could get exhaustive, fast. 🙂  Let’s first look at an overview of the republic’s geography, followed by hotel recommendations:

A. Nalchik – This is the capital city of Kabardino-Balkaria, with a population of around 250,000.  Nalchik is growing and new, modern hotels are being built regularly.  Here are some of our recommendations:

-Modern and comfortable:  Azimut , Butik Otel

-Budget with less frills:  Hotel Rossia , Korona

You could comfortably spend a week in Nalchik, while doing day trips into Kabardino-Balkaria’s beautiful mountain valleys.

B.  Baksan Valley – This is the most traveled road in Kabardino-Balkaria, the road to Mt. Elbrus.  If you have questions about its safety because of travel warnings, please see our detailed blog here of the drive to erase any doubts or fears.  Needless to say, because of the draw of Mt. Elbrus, there are a huge variety of lodging options at the end of this valley, from 4-star to mid-range to budget to hostel.  Here are just a few we’ll recommend from our experience:

-Modern and comfortable 4-star-ish:  Azau Star , Kristall 139

-Budget with less frills 3-star-ish:   Laguna , Povorot

If you’re a mountain climber with your sites set on the summit of Elbrus, you’ll have to spend at least 3-4 nights at Elbrus’s famous base camp at 13,000 feet.  The “barrel huts” are not easy to book directly with, and we highly recommend you do your climb (and hence, have your bookings handled) through a trusted climbing company.  Here are two shelters at base camp we recommend:

-Modern and comfortable:  Leaprus

-Budget with less frills:  Heart of Elbrus Lodge

If you’re interested in climbing Mt. Elbrus and staying in these barrel huts, click  here  to see our climbing itineraries, pricing, and group dates.

C.  Chegem Valley – Chegem Valley is the adjacent valley to Elbrus’s Baksan Valley, and is famous for its beautiful waterfalls as well as being Russia’s top paragliding location.  The “ Paradrome ” has modest accommodations for those wanting to get to know this beautiful valley for a longer period of time.

D.  Upper Balkaria, or Cherek Valley – This is another beautiful mountain gorge not too far from Nalchik.  There is an authentic lodging complex in Upper Balkaria called Tau-El, with amazing local food for meals as well.

E.  Border Zone lodging – Several of Kabardino-Balkaria’s mountain gorges run into the border zone with neighboring country Georgia, i.e. an area that foreigners cannot enter without a special permit from the local government (often taking 2 months to receive).  There is a famous mountaineering lodge in Bezengi Valley, where several generations of Russian mountain climbers have honed their craft in the Caucasus Mountains.  Perpendicular to Baksan Valley (about 25 minutes from the base of Mt. Elbrus) is Adyr-Suu Valley, where there is a lodge for back-country skiers to stay, while trying their hands (and feet!) on the untouched snow of that valley.  Both these valleys require border permits for foreigners, but are possible to access for the more adventurous!

3.  Top cities to visit?

Most locals would agree that Nalchik is the main city of significance to visit in Kabardino-Balkaria, but let’s be honest, even more would say, “Just go to the mountains!”  Tirnauz is the capital of the Elbrus district, and is an interesting town to spend some time in, with its unique location in the mountains and place in Soviet history as a once-booming mining town.  The main thing to consider in visiting Nalchik and other cities in the lowlands, is the chance to experience Kabardian culture and food.  Whereas the deeper you go into the valleys, the more you’ll encounter Balkar culture and food.

4.  Best local foods to try?

There are 3 types of food that come to mind, when spending time in Kabardino-Balkaria:

A. Khychiny – This is one of the staple national dishes of the Balkar people, and what you’ll inevitably be served if guests of local Balkars.  It’s a thin buttery flat bread, sometimes cooked with fillings of cottage cheese, fresh greens, or potatoes.  It is often slathered in butter, but wow is that some tasty greasy goodness! 🙂

B.  Shashlik – Shashlik is a MUST for any visit anywhere in the North Caucasus!  Most people would agree that it’s the national food of the entire region.  Shashlik is meat shish kabobs; while pork and turkey can be found in some parts of the Caucasus, lamb or chicken are the preferred shashlik meats of choice in Kabardino-Balkaria. 

C.  Soup – No matter where you are in Russia, you’re sure to find a local soup that people love.  Kabardino-Balkaria is no different.  Especially in the winter months in the mountain valleys, there’s nothing better than to come inside from the cold weather and warm your body up to a bowl of hearty Caucasus soup.  Whether Georgian kharcho or local Balkar lakhman, make sure to try your hand at one of these soups with a side of fresh baked bread/lavash!

5.  Top Hole-In-The-Wall restaurants:

Of course, for a republic of this size, we’re bound to leave at least a few great local joints off our list, but here are a few to get you started. ***Note:  Restaurants in the North Caucasus are much better known for their food than their service, so prepare for tasty food, but manage your expectations about service:

-Elbrus – Kogutai Restaurant at Mt. Cheget – While this isn’t a hole-in-the-wall restaurant per se, it’s one of many to choose from in the Cheget tourist village, and we have found them to provide consistently good food and service.  Kogutai has a nice interior, and maybe most important, an English-language menu with good pictures. 🙂  There also is a nice outdoor patio with fantastic views of the surrounding mountains.

-Nalchik #1 – Tameris Restaurant – This is a cafe with a relaxed atmosphere in the capital Nalchik.  Local tour company Elbrus Elevation has taken foreign groups there on multiple occasions and always had good experiences.  Address is ul. Kuliyeva 3. 

-Nalchik #2 – Cafe-Bar Oasis – You have to know where this restaurant is to find it, but once inside, you won’t regret it!  There is a unique cafeteria-style ordering process, that includes several dishes being cooked on the spot once ordered.  You can sample local Kabardian dishes here.  The seating area is very modern and a pleasant atmosphere to have a meal in.  Address is ul. Kuliyeva 2. 

-Upper Balkaria – Tau-El Restaurant – This is the restaurant part of the Tau-El Tourist Complex in Upper Balkaria.  Whether spending the night or just passing through, make sure to stop here for a meal!

6.  Must-See Sites

This republic is so chock full of “must-see” destinations, it’s impossible to narrow the list down.  Here are just a few suggestions to get you started: (***Mt. Elbrus is a no-brainer and we’re assuming that’s on your list)

A. El-Tyubu and Paradrome – This is an amazing area towards the end of Chegem Valley.  Many tourists visit the famous Chegem Waterfalls and don’t drive any further down this gorge, which really is a shame.  El-Tyubu is a picturesque Balkar village with several historical sites to see, including some ancient mausoleums.  The real gem of the area, though, is the Paradrome , which is Russia’s premier paragliding destination.  The combination of the scenic surrounding mountains and constant winds produces almost daily conditions to sail through the beautiful Caucasus sky.  Highly recommend!

B.  Upper Balkaria – Also known as Cherek Valley, the entire drive to the actual village of Upper Balkaria is one big destination.  First, you can spend time at the 3 consecutive “ Blue Lakes ”, one of which is one of Russia’s deepest lakes with an underground spring.  Then, the drive itself becomes an adventure, as you pass by steep rock walls with a huge drop-off on the other side.  If you’re able to walk this part of the road, that is a bonus!  Once you’ve made your way through the valley walls, the region opens up into a beautiful panoramic view.  Many years ago, there were multiple villages in this region, but they’ve since been condensed into one main village.  You can see some of the ancient Balkar towers that their ancestors used to live in as well.

C.  Djili-Suu – Although hard to pronounce and not easy to get to, Djili-Suu is one of those places in the North Caucasus that people rave about that you “have to” visit.  It’s actually on the North side of Mt. Elbrus, and more accessible from the Mineral Waters region (2 hrs. from Kislovodsk).  The base camp for Elbrus climbers summiting the mountain from the North side is at Djili-Suu.  This area is famous in Russia for its numerous natural healing springs, as well as unique climate conditions that make for beneficial, long holidays for seeking a respite from their daily grind.  There are wide swaths of land available for camping, with probably the most unrivaled views of Mt. Elbrus in the North Caucasus.  Make sure to check this out!

7.  Off-the-beaten path destinations

A. King’s Waterfalls (Tsarskie), or Gedmisht – Probably the valley in Kabardino-Balkaria with the least amount of hype is the Malka Valley, which is the northernmost valley and mainly runs through the Kabardian lowlands.  At the point where the villages end, though (Khabas), the asphalt turns into dirt and the hills start to rise, culminating with the incredible King’s Waterfalls, or as one friend put it, Avatar Waterfalls.  These stunning waterfalls are best visited in the early summer, when everything is lush green and the water flow is strong, with many streams of water flowing down the earth’s surface.  The different colors are incredible and it’s hard to look away.  Once you’ve enjoyed the waterfalls, enjoy a meal of shashlik at one of the nearby lunch huts.  Having an off-road vehicle is ideal to visit these falls, but worth the time and effort!

B.  One-seater chair lift at Elbrus – As the infrastructure at Mt. Elbrus has modernized, some of the more “authentic” experiences have gone to the way-side.  This is one experience still available, though!  From the 2nd (11,000 ft.) to 3rd level (12,500 ft.) of Mt. Elbrus (whether skiing, going to base camp, or just touring), there is a single-seater chair lift for 100 rubles each way (less than $2).  This is an amazing experience if you have the time.  It’s 8-10 minutes each way, and a surreal experience of the majestic Caucasus mountain range surrounding you, skiers silently passing you by underneath, and in general enjoying the silent expanse of nature all around.  The chair lifts are from the Soviet times and so it feels like something from a different era.  For mountain climbers, the newer group cable car gives better access to most of base camp, but several huts are pretty close to this chair lift, so it still may be a good option for you.

C.  Abandoned Mines above Tirnauz – Tirnauz is about 1 hr. from Mt. Elbrus, and a town everyone drives through to and from the mountain.  Although today it looks old and half-abandoned, it was a booming mining town in the 20th century.  About a 45-minute drive above the city with an off-road vehicle, you can see the remains of the mining operations.  Learning about this history combined with the breath-taking views of the Baksan Valley and even into Georgia, you’ll wonder why more people aren’t visiting this place.  This is a great spot to see eagles soaring in the sky, as well as admire the Soviet city plan of Tirnauz from above.

8.  What do I need border zone passes to visit?

In Russia, any area within 5-10 km of a neighboring country, without a clearly delineated border (i.e. in the mountains) is considered a special border zone, and patrolled by Russian border guards.  This area IS accessible to all Russian citizens with their passports, but is NOT legally accessible to foreign citizens UNLESS you have a special permit from the FSB (Federal Security Bureau).  These permits are accessible, either through a tour operator or local friend, but require you to submit your application 45-60 days in advance.

Areas in Kabardino-Balkaria that are worth a visit if you have a border zone pass:

A.  Bezengi Wall – This is at the end of the Bezengi Valley, and holds a place of lore among Russian mountain climbers.  Many mountain guides go through training in this valley.  Five of the Caucasus Mountain’ range’s highest seven peaks are a part of the Bezengi Wall, so you can imagine the draw it has for climbers. There are great areas for trekking and camping in this area. 

B.  Adyr-Suu Gorge – This remote valley runs perpendicular to Baksan Valley and is about 25 minutes from the base of Mt. Elbrus.  It’s marked at the entrance by a relic of the past, a car lift from Soviet days that auto-cranks your car (and you) about 50 meters up the mountain.  After 45-60 minutes of driving on gravel road, the gorge opens up into a flat valley with a beautiful view of the surrounding mountains.  The Adyr-Suu Alpine Lodge is at the end of this valley and where back-country skiers base out of during the acclimatization phase of their Mt. Elbrus ski tours.  This is truly a place where you can experience untouched powder!

C.  Mt. Cheget (Elbrus) – Cheget is a neighboring mountain to Mt. Elbrus and where many climbers will acclimatize, both at its base and while doing some hikes.  It also is famous in Russia for its free-ride terrain for more experienced skiers.  Standard access to the chair lifts and mountain are available to all (i.e. mountain climbers don’t need to worry about accidentally crossing into the zone), but anyone wanting to summit the peak of Cheget OR visit the beautiful Cheget Lake needs a border permit. 

Foreigners violating the border zone areas is considered a serious offense in Russia; make sure to do your due diligence if wanting to visit one of these areas!  We highly recommend using a local tour operator and always traveling with a local person if visiting one of these areas.

9.  Any cultural “do’s” or “don’t’s” to be aware of

Kabardino-Balkaria is a fascinating republic with a combination of traditional and modern society.  The more you interact with local people, the more you’ll see a mixture of Muslim faith, post-Soviet mentality, and ancient local traditions all wrapped together.   

Kabardians mainly live in the lowlands (Nalchik, Baksan, and lowland villages), while Balkars primarily live in the mountain valleys (Elbrus, Chegem, Upper Balkaria, etc.).  There is a large population of Russians in the region as well.  Foreigners visit every area of the region regularly, and so local people are used to and will welcome your presence.

Come with an open mind to learn about these peoples, their traditions, and their land.  You won’t regret your trip to Kabardino-Balkaria!

***Want to learn more?  Here are several self-published resources from the podcast “ CaucasTalk ” related to Kabardino-Balkaria:

– Travel Tips to Kabardino-Balkaria (audio version of this blog)

– History of Mt. Elbrus (Part 1)

– History of Mt. Elbrus (Part 2)

– Interview with Local Elbrus guide

– Climbing Elbrus: Interview with American guide

– Who are the Kabardians? (Part 1)

– Who are the Kabardians? (Part 2)

– Skiing in the North Caucasus (Elbrus and more)

READY TO EXPERIENCE KABARDINO-BALKARIA FOR YOURSELF?

Where to find us.

• +1 704-810-4296
• [email protected]
• 1578 Pine Creek Rd., Gastonia, NC 28056

Travel Information

• We no longer offer travel services to Russia. See Caucasus Quest Tours for new destinations
• Is it Safe to Travel to the Caucasus in 2024?
• Climbing Kazbek & Kilimanjaro: Comparing two 5,000+ meter peaks
• How to Train to climb Mt. Kazbek in Georgia

Our Elbrus Climbing Tours

• Climb Elbrus South Route
• Climb Elbrus North Route
• Climb Elbrus & The Capitals
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Russia Cultural Tours

• Capitals of Russia
• Lake Baikal on Ice
• Delightful Dagestan
• Heart of the Caucasus

ALL Travel Services to Russia and Mt. Elbrus have been indefinitely suspended as of Feb. 2022.

Explore our new tour branch Caucasus Quest to climb Mt. Kazbek (5,054 meters) in Georgia or for immersive cultural touring experiences in Georgia, Armenia, and Azerbaijan.