Leather Bags and Wallets

Exports of leather bags and wallets from China are expanding fast. Annual output could top 800 million pieces by the end of 2006.

But manufacturers in the industry are facing a challenge as their traditionally low prices are threatened by rising operating and raw-material costs. Will price hikes be next?

With profiles of 77 suppliers, this China Sourcing Report answers that question and more, and shows you how to uncover new opportunities in this mature industry.

At your fingertips, you'll also get a comprehensive industry overview, including information on QC, design trends, R&D spending and "hot spot" production hubs.

What you'll get

Deep profiles of 20 leading manufacturers against which you can benchmark other suppliers that you contact

Short profile tables of 57 additional producers containing core sourcing information such as production capacities, output ratios and export capabilities

Results from Global Sources' latest leather bag and wallet supplier survey that summarize manufacturers' projections for the next 12 months

Analysis of how producers in northern China increasingly offer comparatively cheaper prices as a result of lower labor, material and transportation costs compared to suppliers in the south

This report covers: genuine and synthetic leather handbags, small travel bags, shoulder bags, portfolios/briefcases, men's and women's wallets

How you'll benefit

Discover the latest trends in synthetic — as well as genuine-leather — bags and wallets from China

See which suppliers are taking the biggest steps to improve quality and produce cutting-edge original designs, while keeping prices low

Understand which manufacturers are capable of meeting strict EU environmental standards

Save time and money by pre-qualifying suppliers before your next sourcing trip to China

Executive summary

With an estimated 2,000 to 2,500 export manufacturers in the line, China is one of the world's leading producers of leather bags and wallets, in both genuine and synthetic leather models. The country offers a range of suppliers, from small-scale specialists to high-volume makers, and the global market's lowest prices.

China produced US$17 billion worth of leather bags and wallets in 2003, and annual output could top 800 million pieces within three years.

This report covers makers that are producing handbags, shoulder bags, small travel bags, portfolios, backpacks and wallets in real leather and treated PU and PVC.

Women's handbags are the industry's strongest line, accounting for nearly 30 percent of production. Asia is the largest market for China-made women's handbags, absorbing 35 percent of suppliers' exports in this line. North America and Western Europe purchase 29 percent and 24 percent, respectively. Eastern Europe accounts for only 5 percent at present but is seen as an emerging market for China handbags.

Our report examines what is driving the country's export industry for genuine and synthetic leather bags and wallets. We provide an in-depth look at products made and prices offered, R&D and design trends, raw materials, production capability, the main manufacturing hubs, and projections for the year ahead — information that can help your company formulate its sourcing strategies.

The report includes in-depth profiles of 20 export manufacturers. These suppliers were selected to be featured companies because they are leading makers from the country's main production hubs of Guangdong, Fujian, Zhejiang, Shanghai, Jiangsu, Hebei and Beijing. They offer lowend, midrange or high-end designs, and together represent a cross-section of the suppliers available in China.

There are also 57 short profiles for a broader look at the range of makers operating in China. A Product Gallery highlights the industry's latest design trends, including more compartments, brighter colors, azo-free models, bolder embroidery and embossing, and budget-conscious models with combined materials.

The report also analyzes the findings of our survey of 77 China suppliers, providing a forecast of pricing and production trends for coming months.

China suppliers are producing models in a range of leathers, including cowhide, sheepskin, pigskin, exotic materials such as crocodile and ostrich, and synthetic versions. While high-end leathers are mainly imported from Italy, China is virtually self-sufficient now in the supply of low-end and midrange leather materials.

Industry overview

China produces US$17 billion worth of leather bags and wallets annually, in genuine and synthetic leather models. With an estimated 10,000 to 12,000 makers in the line, one-fourth of which export, the country currently turns out more than 650 million pieces as a formidable production center, and output will climb to 800 million pieces in two or three years.

The industry is expanding. Most makers registered sales increases of 10 percent to 15 percent last year, and some are estimating 30 percent growth for 2004. Output and revenue are increasing as many suppliers open new plants to meet demand. Most of the country's producers have monthly capacities of 20,000 to 100,000 pieces. Some of the industry's biggest players featured in this report can manufacture up to 300,000 bags per month.

The strengths of China's export industry for genuine and synthetic leather bags and wallets are low prices and high volumes, both a result of the country's abundant cheap labor. Low-end and midrange models will continue to dominate production. But as the industry moves toward better quality, the number of suppliers specializing in high-end models will increase.

OEM work represents 60 percent of China's leather bag and wallet output, a relatively low figure compared with most of the country's fashion product industries. Because China's leather bag and wallet suppliers have a relatively high degree of design capability, ODM orders account for 25 percent of their output and in-house designs take up 15 percent.

Private companies dominate China's export industry for leather bags and wallets. There are very few state-owned enterprises left in this sector largely because SOEs, with their bureaucratic management structures, would be too slow to react to the ever-changing design trends and market demands. The vast majority of suppliers are locally owned, but there is also an element of Hong Kong and Taiwan investment in the industry. Guangdong province has a number of companies either wholly or partly owned by Hong Kong enterprises, and the same is true in Fujian province for Taiwan investment.

Samples of supplier profile

Asia Eagle Far East (Panyu) Co. Ltd
Asia Eagle Far East (Panyu) is a Hong Kong-funded leather products supplier, specializing in the manufacture of midrange leather bags and wallets. Seventy percent of products are made from synthetic leather, while the rest are made of genuine leather.

The midsize company provides Hong Kong-style OEM/ODM services to chain and department store buyers and importers in the United States and Europe. Its OEM clients include the MGB Group (formerly Gemex) and the OBI Group of Germany.

The company has a Hong Kong sales office where buyers' orders can be processed. Operations follow a Hong Kong management style, which Asia Eagle claims helps it to understand buyers' precise needs better than traditional companies in mainland China. Asia Eagle emphasizes service, communication, product R&D and QC.

The 1,000-worker company has two factories located in Guangzhou and Dongguan, Guangdong province. These factories produced US$8 million worth of leather bags and wallets in 2003.

Asia Eagle used to focus production on genuine leather bags and wallets. However, as global market consumption in that line has weakened over the past seven years, the company has shifted the bulk of output to synthetic leather models.

Products and prices
PU and PVC leather are sourced in Guangzhou. Genuine leather is purchased mostly in Germany and Italy, but 20 percent comes from local suppliers.

Sample of product gallery

Genuine leather bags Changfeng Leather Product Co. Ltd Model: J-1002 Release date: 2004 Minimum order: None Delivery time: 30 days FOB price: US$1 Description: Geniune leather bag made of pigskin; natural finish; waterproof; size is 7x4inch

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Global Sources Industry-specific China Sourcing Reports

All this column of information contained in China Sourcing Reports is the result of original, independent and impartial research conducted by Global Sources analysts.

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