July 13, 2024
Leather Goods Market

Leather Goods Market is Estimated To Witness High Growth Owing To Consumers Shifting Preference Towards Premium and Luxury Products

The leather goods market is estimated to be valued at US$ 324.69 Bn in 2023 and is expected to exhibit a CAGR of 5.1% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:
The leather goods market comprises products made from leather, including purses, handbags, wallets, shoulder bags, clutches, luggage, footwear, apparel, upholstery, and accessories. Leather is a durable material that can last for years with proper care and maintenance. Leather goods are considered as luxurious and premium products adding style and personality to one’s outfit.

Market key trends:
The growing preference of consumers towards premium and luxury products has been a major driving factor for the Global Leather Goods Market. According to a study, around 60% of global luxury goods sales are accounted for by millennials. The increasing spending power of middle-class population especially in developing countries is positively impacting the sales of luxury leather goods. Furthermore, continuous innovations in design, style, and technology by market players to cater to changing consumer preferences has increased the demand for leather accessories and apparel. The launch of vegan leather alternatives by companies has also attracted the attention of environmentally conscious consumers. However, volatility in raw material prices remains a challenging factor for sustainable growth of the market.

Porter’s Analysis

Threat of new entrants: The threat of new entrants is moderate as the market is global and mature in nature. However, the key players have strong brand image and distribution network which act as a barrier.

Bargaining power of buyers: The bargaining power of buyers is high as the market has numerous established brands and the products are differentiated. Buyers can bargain for prices and offers.

Bargaining power of suppliers: The bargaining power of suppliers is moderate as key raw materials like leather are commoditized. However, suppliers of premium and unique materials have some bargaining power.

Threat of new substitutes: The threat of new substitutes is low as leather goods have strong brand image and are not easily replaceable. However, vegan and eco-friendly substitutes pose a minor threat.

Competitive rivalry: The competitive rivalry is high due to the presence of global established brands and frequent new product launches and marketing strategies.

SWOT Analysis

Strength: Strong brand image and loyalty, wide distribution network, focus on quality and craftsmanship.

Weakness: High operational costs, dependency on seasons and fashion trends, risk of counterfeits.

Opportunity: Emerging markets growth, online retail boom, demand for premium and sustainable products.

Threats: Macroeconomic slowdowns, geopolitical issues disrupting supply chain, increasing raw material costs.

Key Takeaways

The global leather goods market is expected to witness high growth, exhibiting CAGR of 5.1% over the forecast period, due to increasing preference for fashionable luxury items. The market size is projected to reach US$ 471.27 Bn by 2030 from US$ 324.69 Bn in 2023.

The Asia Pacific region dominated the global market in 2023 with over 35% share and is expected to maintain dominance through 2030, driven by strong growth in China, India and other developing Asian countries.

The Europe market accounted for around 30% share in 2023 and will grow steadily due to demand from Italy, Germany, UK and France which are major hubs of luxury leather goods producers.

Key players operating in the leather goods market are LVMH Mo«t Hennessy Louis Vuitton SE, Kering S.A., Adidas AG, Hermà ̈s International S.A., Dolce & Gabbana Luxembourg S.Ã., Overseas Leather Goods Company Pvt Ltd, Tata International Ltd, Chanel International B.V., Prada S.p.A, and Ralph Lauren Corporation.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it