The research study covers the present scenario and growth prospects of the global leather goods market for 2017-2021. The market is segmented based on distribution channel (specialty stores, department stores, hypermarkets, supermarkets, convenience stores, and clubhouse stores, and online) and geography (the Americas, APAC, Europe, and MEA).
The global leather goods market has been growing exponentially in the emerging and developed markets over the last five years and is shaping up to become one of the leading competitive markets at the global level. With increased globalization, the scope of growth of the global leather goods market is widening. The growing export of leather products continues to play a key role in driving the growth of the market. In the US, manufacturers of raw materials export approximately between 91% and 95% of the total unit production annually, which makes the country one of the key leading suppliers of the raw materials of leather, globally.
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Technavio consumer and retail research analysts highlight the following three factors that are contributing to the growth of the global leather goods market:
- Premiumization of leather goods
- Durability of leather goods
- Product branding influences customer purchase decision
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Premiumization of leather goods
The demand for leather products with high aesthetic appeal is on the rise because leather-made products, unlike products made of other synthetic fabric, carry a premium impression about them. They are also highly durable and reliable, thereby offering value for the money invested in them. The innovation and variations in designs and the use of exotic leather have helped manufacturers cater to the demand and aspirations of the high-end and premium customers.
Tamal Saha, a lead retail goods and services research analyst at Technavio, says, “Growing disposable income and the expansion of the luxury market are aiding the demand for leather goods. In 2015, the leather accessories market contributed between 25% to 30% of the net sales of the luxury goods market. The growth in the luxury leather market has also led to the expansion of the retail market of the leading vendors such as Louis Vuitton, Burberry, GUCCI, and Prada.”
Durability of leather goods
Customers seek value for money, especially while purchasing expensive products. In developed regions such as Americas and Europe, the replacement cycle of luxury goods is higher than it is in the developing countries of APAC such as India and China. In these countries, consumers do not purchase luxury products very frequently as they are more inclined to spend on products that meet their needs.
“The buying decision of consumers plays a significant role in the quality and branding over price because the procurement of leather goods are essentially status-driven purchases. One of the key factors that customers seek in a product is durability, which along with strength is an important characteristic of leather. In the fashion and luxury goods industry, the improvements in leather processing technology, manufacturing capabilities, and productivity, without compromises made on the durability, form, shape, stability, and comfort invite demand for leather products,” adds Tamal.
Product branding influences customer purchase decision
In the international market, leather products remain a major style statement. The rising demand for luxury products and brand positioning are also responsible for driving the leather goods market. This is because leading players position their products in ways that enable consumers to become aware of them through brand names. This helps consumers develop brand entity for the products and vendors.
Brands such as LVMH and Hermès are acquiring crocodile farms and tanneries to secure supplies of exotic and other standard-quality leather as the preference for exclusive handbags among key customers is on the rise. Premium customers in the key countries such as the US, the UK, and Germany are willing to make high investments in designer brands such as Prada and GUCCI.
- Adidas Group
- Gianni Versace
- Giorgio Armani
- Ralph Lauren
- VF Corporation
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