MARKET OVERVIEW- ASIA-PACIFIC LEATHER GOODS MARKET
Leather goods are articles, clothing, accessories, and other products made with animal hides or other natural or synthetic materials. These can be consumer products created with specially treated animal skins like pigs, cows, sheep, and more. Leather goods vary in size and quality, from everyday wallets and purses to luxury furniture. Various goods can be made with leather, from clothing and accessories to furniture and car interiors. Leather products are widely used by most consumers. Diverse goods and production techniques are utilized by the leather industry. In the process of tanning leather, raw materials, i.e. leather transformed from raw hide or skin into a finished product that can be used to make a variety of consumer goods. The rising consumer disposable income, rise in export of leather goods, and increasing demand for trendy, and fancy leather apparel, footwear, and accessories is anticipated to drive the growth of the market over the forecast period. Also, an increase in brand awareness is anticipated to provide an ample opportunity for the market players during the forecast period.
MARKET DRIVERS
The growth of the market is driven by rise in in export of leather goods in the Asia-Pacific region. According to the India Brand Equity Foundation, India is the second-largest exporter of leather garments, the third-largest exporter of saddlery and harness and the fourth-largest exporter of leather goods in the world. The garments sector accounted for 7.03% of the country’s total leather exports in 2021-22. During 2021-22, India exported total leather and leather products of value US$ 4.87 billion, a 32% increase from the previous year. In August 2022, the total leather exports stood at US$ 473.87 million. Thus, high exports of leather goods are expected to drive the growth of the market. Also, rising consumer disposable income is expected to drive the demand for luxury leather goods. According to McKinsey Global Institute (MGI), Asian consumers are expected to account for half of global consumption growth in the next decade, offering a $10 trillion opportunity. The number of households below the middle class with limited discretionary consumption power is expected to fall by 60 percent. Thus, growing consumer disposable income has stimulated the demand for luxury leather goods. It is anticipated to boost the market growth over the estimated time period.
MARKET OPPORTUNITIES
The market is expected to have new opportunities with the use of exotic leather to manufacture products, which has enabled manufacturers to cater to the demand from high-end and premium customers. Also, the implementation of new designs and advanced manufacturing techniques and growing government support are key factors that are expected to create lucrative opportunities for key players in the market. For instance, in India, 100% FDI is allowed for the manufacturing of leather products through an automatic route. Between April 2000 and September 2021, the cumulative foreign direct investment (FDI) inflow in the case of the leather, leather goods, and pickers industries was USD 218.69 million.
MARKET RESTRAINTS
In recent years, many leather and leather goods exporting countries, the Asia-Pacific region have had to raise the prices of their products due to an increase in the costs of raw material and shipping. This is expected to acts as a major hurdler for the market’s growth over the forecast period.
MARKET GROWTH CHALLENGES
A key challenge that may affect the growth of the market is the rising awareness regarding the negative effects of unethical practices in producing leather goods. Also, the lack of skills, technology, intermediate inputs, and processing equipment is expected to pose key challenges for the market growth over the forecast period.
CUMULATIVE GROWTH ANALYSIS
The report provides an in-depth analysis of the Asia-Pacific Leather Goods market, market size, and compound annual growth rate (CAGR) for the forecast period of 2023-2029, considering 2022 as the base year. A rise in demand for leather goods in Asia is anticipated to stimulate the growth of the market and due to this factor, the market is expected to witness the growth at a specific CAGR from 2023-2029.
ASIA-PACIFIC LEATHER GOODS MARKET SEGMENTAL OVERVIEW
The Asia-Pacific Leather Goods market comprises of different market segments like product, distribution channel and country.
ASIA-PACIFIC LEATHER GOODS MARKET BY PRODUCT
By product, the Asia-Pacific Leather Goods market includes key segments like
- Small Leather Goods/ Accessories
- Handbags
- Apparel
- Footwear
- Home Decor and Furnishing
- Pet Accessories
- Others
Different types of handbags include purses, bags and tote bag among others. Apparel includes products such as jacket, shirt, pant and skirt. Footwear includes athletic shoes, dress shoes, sandals and boots while home décor and furnishing includes products like sofa.
The handbag segment is expected to witness high demand over the forecast period. The growth of the segment can be attributed to a rise in the export of leather handbags in Asia-Pacific due to high demand for different types of handbags. As per Volza’s India Export data, Leather bag export shipments from India stood at 1.7M, exported by 6,450 India exporters to 69,392 buyers. The top 3 exporters of Leather bag are India with 1,657,433 shipments followed by China with 90,149 and Vietnam at the 3rd spot with 53,664 shipments.
Also, leather footwear is expected to witness high growth over the forecast period due to high export of leather footwear by Asian nations. According to the World Footwear 2022 Yearbook, In 2021, Vietnamese footwear and handbags exports resumed their upward trend, increasing by 4.6%, to 20.78 billion US dollars, on a comparable basis to the prior year. Footwear exports alone rose by 6.1%, totalling 17.77 billion US dollars.
ASIA-PACIFIC LEATHER GOODS MARKET BY DISTRIBUTION CHANNEL
The Asia-Pacific Leather Goods market finds key distribution channels like
The online segment is predicted to lead the market over the forecast period. The growth of the segment can be attributed to the expansion of e-commerce in the region. According to Euromonitor International, Asia Pacific’s e-commerce sales are expected to nearly double by 2025 reaching USD 2 trillion. In 2020, businesses receiving online orders recorded 37.6% growth and will reach 44% by 2025. In 2020, businesses receiving online orders recorded 37.6% growth and will reach 44% by 2025.
The offline segment is predicted to witness high growth over the forecast period. The availability of premium specialty stores, supermarkets and hypermarkets is driving the growth of the segment. In addition, the availability of cost-effective leather products in retail stores is expected to contribute to the growth of the segment.
ASIA-PACIFIC LEATHER GOODS MARKET BY COUNTRY
The Asia-Pacific Leather Goods market is studied for the following countries
- China
- Japan
- India
- Rest of Asia-Pacific
China is projected to lead the market during the forecast period. The growth of the market in China can be attributed to rise in customer spending, rising awareness regarding the excellent characteristics and properties of leather goods, and numerous innovations and technological advancements in the region.
India is expected to witness high growth over the projected time period. The high import rate of leather goods due to high demand from consumers is expected to contribute to the growth of the market. According to the India Brand Equity Foundation, during April-August 2022, the total export of leather products to USA was valued at US$ 598.8 million, an increase of 51.35%.
COVID-19 IMPACT ANALYSIS ON ASIA-PACIFIC LEATHER GOODS MARKET
Axiom MRC provides a 360-degree analysis of micro and macro-economic factors in the Asia-Pacific Leather Goods market. In addition, complete analysis of changes on the Asia-Pacific Leather Goods market expenditure, economic and international policies on supply and demand side is provided in this exclusive report. The report also studies the impact of pandemic on Asia-Pacific economies, international trade, business investments, GDP, and, marketing strategies of key players present in the market.
The COVID-19 pandemic has adversely affected almost all sectors. In 2021, the COVID-19 pandemic had a significant impact on sales and operations across all fashion industry segments. During lockdowns, many stores in the majority of Asian nations had to close. Some managed to survive thanks to aid from their governments, a combination of steep discounts, and a switch to online shopping. According to the Leather goods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB), as of April 2020, orders amounting to USD 316 million were cancelled due to COVID-19 outbreak disrupting the entire leather and leather products value chain in Bangladesh. However, despite the lower demand and cancelled orders, the global supply chain is eager to continue production in order to survive the crisis. It is expected to provide new growth opportunities for key players in the market.
COMPETITIVE LANDSCAPE ANALYSIS
The competitive landscape analysis of the Asia-Pacific Leather Goods market is primarily focused on expanding the growth of leather goods industry in the Asia-Pacific region through new product innovation, business expansion, increasing presence of range of manufacturer operating in leather goods sector has led to growing demand for the market. Besides, the market offers range of products in different application to fulfil the required demand of consumers, which further contributes to healthy growth in the market.
The key players studied in market are
- Adidas
- Kering SA
- Puma
- Chanel SA
- Prada
- Hermès International S.A.
- LVMH
- Saddles India Pvt. Ltd.
- CIMA LEATHER GOODS
- Capri Holdings
- Ralph Lauren Corporation
- Bata Corporation
- Samsonite International SA
- Nike
- Harrods Limited
- Longchamp
- Giorgio Armani
- Dior
- Bellroy
- Fossil Group
- Others
RECENT DEVELOPMENT:
January 2023: PUMA had decided to expand its offline presence by opening its new store in Omaxe World Street, located in Faridabad, India. The company has leased 5,159 sq. feet of retail space to the athleisurewear brand. The brand occupies the basement, ground floor, first floor and second floor of the building.
January 2021: Nike, Inc. launched its first SB Dunk sneakers made from vegan leather. The sneakers are cruelty-free and are part of the Zero Waste Initiative 2019 by Nike.
