The digital battle of the leather goods market in China .?

Economic growth in China is a huge driver of the luxury goods market and the demand for high quality products is increasing accordingly.

In 2021 alone, revenue from sales of luxury leather goods reached US$8.541 billion. Younger generations are more likely to buy fashion items and the importance of social media to customers has increased as their tastes are expressed through the purchase of high-end items. The emphasis on an omnichannel strategy for distribution, combined with the willingness of younger generations to share their buying decisions, means retailers need to find ways to improve distribution.

Potential of the Chinese leather goods market

Comparing domestic production and imported foreign products, China itself is a huge exporter of leather products worldwide, generating 25% of the world’s annual leather production. The Chinese leather industry is well known for the heavy hide made for making belts, straps, and soles, as well as the lightweight leather used for shoes, bags, and jackets. In 2019, China contributed 40.8%of the world value of exported leather articles, followed by Italy (14.8%) and France (11.5%). As reported by the China Leather Organization, Chinese leather manufacturers will sell footwear (64.8%), luggage and bags (13.46%), leather (11.22%), apparel leather (5.55%) and derived products (5.08%) in 2021.

Regarding the potentials of the Chinese market, there is a growing demand for imported leather of all kinds for manufacturing and overseas-made finished products such as quality shoes and fashion leather handbags. Imports of leather and finished products reached US$ 9.8 billion , an increase of 10.7%.

Chinese luxury leather goods market

In 2014, leather goods accounted for almost 30% of the personal luxury market. Luxury handbags and leather goods drive sales across all age groups, as do luxury jewelry, footwear and apparel.In 2021, revenue from the luxury leather goods segment is expected to reach US$8.541 million and is expected to grow 5.83% annually over the next 5 years.

Consumption of bags and leather goods in China

In 2021, the annual revenue of luxury leather goods in China is expected to reach US$8 billion with a growth rate of 7%. The famous luxury brands that sell leather goods in China are Hermès, Chanel, Louis Vuitton, Gucci and Dior. Customer buying factors include design and materials, as well as brands. Among these buyers, 68% of them collect at least one handbag every other season and 36% even buy one per season.

Leather goods consumers are getting younger

Currently, a quarter of Chinese customers buying leather goods are between the ages of 18 and 24, followed by working-class women aged 25-34 (22%) who have higher purchasing power on average. Some people buy fashion bags and luxury bags to express their fashion taste, as a gift and because of their preference for certain brands, designers, quality products, etc.

For example, classic French luxury shoe brand, Roger Vivier, is launching new categories and trending colors targeting younger generations. Roger Vivier collaborates with Chinese celebrities, such as Nana Ouyang, to promote its luxury bags in China targeting its young clientele. They choose their digital presence on one of the most used social networks in China, Weibo, to reach Chinese people who frequently spend their time on social networks.