Leather goods never go out of trend, especially accessories like briefcases, suitcases, jackets, footwear, and more. In the leather goods segment, bags or handbags are the most popular and the top-selling items and are expected to have significant growth, mainly because of two reasons
(1) the rise in the number of women working these days
(2) the increasing purchasing power of consumers.
The overall global leather goods market is forecasted to reach USD 121.16 billion by 2022 at a CAGR of 4.47% during this period. It is a highly advanced and growing market in which retail stores hold the dominant share of over 90%, but, with the emerging growth in e-commerce - there is an existing threat from online sales, which will increase during the same period.
Industry Structure and updates
As the competition is high in the industry, leather bags and handbags retailers need to regularly think of new strategies like expansion and acquisition, to be able to increase market presence and expand the customer base.
Drivers and constraints
Global economic power and a higher disposable income are two significant drivers in the leather bags & handbags industry, both, in the domestic and international markets.
The input costs for leather products have increased, which has declined the profit margins. The amounts in this market can be high, especially for the luxury leather products, which does not target on a vast consumer base, which can sometimes cause a constraint in this market.
What do retailers and manufacturers need to understand?
• There needs to be a good understanding about how to perk up the leather production process from when it is at the raw stage up to the finishing
• Quality management of leather, how to select the right tanners, leather grading, measures to improve the cost efficiency of leather
• Managing the supply chain in a better way
• Improving quality control
E-commerce has revolutionized how artisans and makers sell their handmade items. It has become increasingly more comfortable for creative DIY entrepreneurs to build and grow a handmade goods business, from scratch, online.
Merchants that create their leather goods and accessories by hand invest much more in their products. They are passionate about them and pour their heart, soul, and energy into each item they produce.
So, for some artisans, it might not just be a business opportunity or the opportunity to make a living or side-income from their passion. Instead, they may see it as an opportunity to build a real brand from their creations, not just selling one-off products. The key here is - to pay attention to detail and be as organized as possible to work towards your passion which is a unique idea in the market.
Some entrepreneurs have turned their passion into an online store, trying to penetrate in the markets, building their brand, their identity, product values – rightly - Right from scratch! Thereby, achieving a competitive edge.
Competing with large businesses is not their primary goal. The purpose is their passion, and they strive hard towards it each day. When starting a new business, our recommendation is first to create a product and business model , if not done yet. It is not required to reinvent the wheel at this point, but it is how you use your creativity to establish something that is genuinely different, and unique.
Along with all this, having a professional website and being very active on social media, even planning for the possibility of your product gaining quick popularity can be very successful. Focus on networking (online & physically) and build online or social media communities. With all this, do your best to accommodate towards the demand and always remember - just because you start off small doesn't mean you should think small. Think big, and others will feel the same about your business.…