Leather Products Market Profits, High Business Opportunities Attractive

The business is so good that even the luxury LVMH group is competing for it.

Let's have a look.

According to the information of Paris banking and securities department, the global market of luxury leather accessories in 2014 has increased from 18% in 2003 to 30% now.

With many fashion brands squeezing into the accessories market, luxury giants such as LVMH, Kai Yun and Herm s have been competing fiercely for leather enterprise control. No luxury brand is firmly in control of the supply chain.

Controlling the supply chain means getting better leather quality.

In the past ten years, the success of leather products market has made the enterprises change their faces, make the brand revitalize, and contribute significantly to the double-digit growth rate of the whole luxury industry's revenue.

Competition in this category is fierce and the market is very crowded.

If a brand has the ability and ambition to convey the message that it wants to use the best material, it can get a very high price increase.

For example, handbag products actually contribute extremely important gross margins to luxury goods companies.

According to the data of Paris banking and securities department, 10 to 15 years ago, Louis Vuitton and Gucci were the only super luxury brands in the market with the emphasis on accessories. Herm s and Coach respectively dominate high-end and light luxury markets. Now Chanel, Bottega Veneta, C line, Veneta, hex, cable, and almost all other fashion brands, such as Lu Wei Ming Xuan group, Kai Wan Group and X. Feng Group, have entered the market.

In late June this year, some bloody pictures of crocodiles were shown in international fashion media.

News is about

They said they killed the animals in the farms of the United States and Africa in order to make handbags.

French media Challenges reported that over the years, a French foundry called Arman on has been producing Hermes, Louis Vuitton and Chanel's high-grade leather products, which are not all produced by Hermes leather.

This surprised the Chinese public, especially when it was mentioned that leather goods were cheap when they came out, but the price was much higher at the retail end.

The company's 2014 annual report plainly wrote: 2/3 of Hermes's products were produced in factories inside the company - which means that the remaining 1/3 may come from other ways, such as foundry.

It also shows that if you control the supply chain, you can guarantee that you can get all the high quality leather you want, and keep the leather business running properly, and sell the inferior quality leather to the third party.

Excessive profits of luxury brands, consumers began to turn to light luxury.

The booming growth of accessories business has become a key driver for the recent retail expansion of brands such as Louis Vuitton, Burberry, Gucci and Prada.

Besides obtaining high profits, leather products, especially handbags, are also attractive retail business categories.

They are not only efficient in sales (sales per square foot), but also in full price sales.

At present, the high-grade leather needed by luxury enterprises can only be purchased from Europe.

France is the world's largest producer and consumer of cowhide and is also the most important manufacturer of luxury leather goods.

Traditionally, because of the high profits and the rising price of luxury leather goods, the increased cost of leather can easily be pferred to consumers.

According to the data of the Bank Securities Department of Paris, the annual compound growth rate of Louis Vuitton's Keepall Bandouli Bandouli re plus shoulder strap travel bag and Herm s s Leather Handbag price has reached 6% over the past 30 years, and the annual compound growth rate of Chanel 2.55 sheepskin handbag prices has reached 13% over the past 10 years.

At the same time, approachable brands such as Michael Kors, Kate Spade and Tory Burch have taken part in the market share of high-end brands.

The market share of Michael Kors in leather goods increased from 1% in 2008 to 6% in 2013.

According to the data of Paris Bank Securities Department, the super brand has basically abandoned the market of 500 euros (3402.6 yuan).

However,

The profits of leather goods may have been overimproved.

Unlike traditional luxury brands, light luxury giants do not seem to have to adopt the best quality leather, or more freely use smaller areas but perfect leather.