The European market potential for leather bags

The Leather Bags market is worth approximately €3.5 billion in Europe. The market grows at an average rate of 3.2% each year.

The European Leather Bags market follows the general apparel trends related to sustainability, technological innovation, and increased emphasis on corporate and social responsibility. For more information, see the CBI study on Trends and Opportunities in the Apparel market. In addition to these general trends, the Leather Bags market has its own, segment-specific trends: raw material shortages cause producers to seek low-cost sourcing options, the use of sustainable leather is growing, rising popularity of leather ‘man bags’, and technology is creating new opportunities.

1. Product description

Leather Bags are carrying items made of leather that are generally worn with or supplementary to other clothing items. They typically have a functional as well as an aesthetic value. They typically have a longer life-cycle than garments and non-Leather Bags, especially when it comes to high-end products that gain value over time. The statistics in this document comprise Handbags, whether or not with shoulder straps, incl. those without handles, with outer surface of leather, composition leather or patent leather (HS Code: 42022100).

Figure 1: Leather Bags examples

Photo Source: Unsplash

2. What makes Europe an interesting market for Leather Bags

Europe is one of the more significant importers of Leather Bags in the world. In 2021, the value of leather bag imports to Europe accounted for €3.5 billion, up from €3.0 billion in 2016. This corresponded to roughly 37 million units of Leather Bags clothing in 2021 (down from 47 million in 2016). Between 2016 and 2021, the value of the European Union’s Leather Bags imports grew by an average of 3.2% annually.

The European Union is also a large re-exporter of Leather Bags. In 2021, it exported €9.6 billion worth of Leather Bags apparel (up from €6.4 billion in 2016). EU Leather Bags exports grew at an average yearly rate of 8.3% between 2016 and 2021. The biggest EU exporters in 2021 were Italy (€4.2 billion), France (€4.0 billion), the Spain (€330 million), Netherlands (€314 million), Germany (€274 million), and Belgium (€80 million). Together, these six countries represent over 97.2% of the EU’s Leather Bags apparel exports. Germany, France, and Spain have seen the strongest export growth within this group, with an average yearly increase of between 9.2% and 14.2%. However, just behind in the seventh position, Poland grew by an average yearly rate of 16.7%. In comparison, Italy, Belgium and the Netherlands have experienced slower average growth rates of between 5.0% and 1.2% annually.

In 2021, 34.0% of European Leather Bags imports originate in extra-EU countries and 66.0% originate in Intra-European Union countries. In 2021, suppliers from developing countries contributed 14.3% to all Leather Bags imports into the European Union in terms of value (down from 19.9% in 2016) and suppliers from the rest of the world accounted for 19.7% of the import value (up from 18.8% in 2016). The value of European Union Leather Bags imports originating from developing countries corresponded to €503 million in 2021 and decreased at an average yearly rate of 3.5% since 2016. This demonstrates that there is a lower demand for Leather Bags from developing countries.

Europe’s extra-EU Leather Bags imports are dominated by Switzerland, China, and India. Together, these three countries account for 23.3% of all Leather Bags imports into the European Union. Switzerland is the single largest Leather Bags exporter to the EU, with 14.1% of the total EU imports value in 2021. It is followed by China with 5.0% and India with 4.2%. Other extra-EU Leather Bags exporters have market shares of less than 6.5% of the total Leather Bags import value. Exports from Cambodia (+91.4%), Hong Kong (+12.8%) and Indonesia (+10%) grew significantly between 2016 and 2021. Cambodia’s imports reached €17 million (in comparison to €0.7 million in 2016), while the average Extra-European Union country experienced an average growth rate of 0.5% during the same period.

The Intra-European Union Leather Bags trade is dominated by Italy, France, and the Netherlands. 51.6% of the total Intra-EU Leather Bags imports originate in these three markets. They are followed by Germany with 4.3%, Spain with 4.3%, and Poland with 1.4%. All these countries have increased their market shares within the last 5 years.

Table 1: Top 10 Extra-EU and Intra-EU Leather Bags exporters to the European Union, 2021 EUR value; average yearly growth

Source: Eurostat

The British market after Brexit

The United Kingdom left the European Union in 2020. As a result, new trade agreements for all product categories, including apparel, were needed to maintain business partnerships with countries located in the European Union and other partners worldwide. Following its withdrawal from the European Union, the UK no longer shares its official trade figures with Eurostat. This makes an exact and official comparison of product segments and product quantities impossible, but the overall approximate import market values are still available from the ITC Trademap. 

The 2021 value of the UK’s leather bags imports was €535 million, which would make it the third largest market in the European Union, after France and Italy, if it was still a member of the Union. 15% of the UK’s leather bags imports originates in the developing countries, 83% in the EU27 and 2% in the rest of the world. ITC Trademap figures show that the United Kingdom has deeply felt the consequences of both Brexit and the Covid-19 pandemic. The overall leather bags imports decreased from €719 million in 2019 to €535 million in 2021, which is an average annual decrease of 13.8% over two years. Although the UK leather bags market is expected to recover over time back to its 2019 value, due to the rising inflation, the recovery may take longer than initially expected.

At this point, the long-term consequences of Brexit cannot yet be foreseen. However, in 2021, the country experienced dramatic shortages in supermarkets and in the workforce. This hampered the country’s recovery from the pandemic and could turn out to be some of the long-term consequences of Brexit. In the meantime, the European Union initiated an EU-UK Trade and Cooperation Agreement. This is intended to facilitate trade between the countries of the Union and the United Kingdom, but cannot fully replace the trade relationship that the UK enjoyed with the EU before Brexit. In 2021, the United Kingdom signed various trade agreements with non-EU countries.

Impact of COVID-19 on the European apparel market

The COVID-19 pandemic strongly influenced the sales and processes within all segments of the fashion industry in 2021. In most European countries, many local shops had to close during lockdowns. Some survived thanks to support from their governments, a mix of heavy discounts, and a shift to digital sales. Overall, Leather Bag sales experienced a sales decline in 2021, although it was not as severe as in other apparel segments.

According to industry experts, the pandemic may change all market dynamics in the long run. Asian countries are expected to lose stakes due to local lockdowns and delivery problems, while companies in Africa or other regions could potentially win market share by being a reliable and present partner. Additionally, the pandemic created new trends and demands among consumers. E.g., some Chinese manufacturers have been observed providing buyers with antibacterial and antiviral fabrics.

Further information about the impact of the coronavirus and how to respond have been collected and can be found in the CBI market information about the impact of the Coronavirus.

3. Which European countries offer most opportunities for Leather Bags

Western European markets are much larger and better developed than Central and Eastern European markets in terms of supply chain organisation and quality control. The top Leather Bags import markets in the EU are France, Italy, Germany, the Netherlands, Spain and Belgium. These top six countries together account for 86.5% of Leather Bags imports in the EU, and grew at an average rate of 2.7% per year between 2016 and 2021.

Table 2: Top 10 European Union importers of Leather Bags, 2021 EUR value; average yearly growth

Source: Eurostat

Table 3: Top 10 European Union importers of Leather Bags from developing countries, 2021 EUR value; average yearly growth

Source: Eurostat

France

France is the largest Leather Bags import market in Europe. In 2021, the value of its Leather Bags imports amounted to €1.1 billion (up from €974 million in 2016). This corresponded to approx. 7.4 million units of Leather Bags. Between 2016 and 2021, the value of France’s Leather Bags imports grew at an average rate of 3.2% per year, while the import volume declined by 4.6% per year. During the same time frame, the value of imports from developing countries declined by an average of 0.4% per year, with Leather Bags from developing countries currently constituting 11.2% of France’s imports in this product segment. The average unit price of Leather Bags imports is at €154, which is €50 higher than in 2016.The main French leather bag brands include Louis Vuitton, Longchamp, Chanel, Celine, Hermes, and Goyard.

Italy

Italy is the second-largest import market for Leather Bags in Europe. In 2021, the value of its Leather Bags imports amounted to €851 million (up from €619 million in 2016). This corresponded to approx. 5.7 million units of bags. Between 2016 and 2021, the value of Italy’s Leather Bags imports grew at an average rate of 6.6% per year, while the import volume declined at 4.0% per year. During the same time frame, the value of imports from developing countries increased by an average of 1.1% per year. Leather Bags from the developing countries currently comprise 12.6% of Italy’s imports in this product segment. The average unit price of leather bag imports is at €149, which is €61 higher than in 2016. The main leather bag brands include Gucci, Armani, Furla, Prada, Fendi, and Bottega Veneta.

Germany

Germany is the third-largest import market for Leather Bags in Europe. In 2021, the value of its Leather Bags imports amounted to €481 million (up from €443 million in 2016). This corresponded to approx. 5.2 million units of bags. Between 2016 and 2021, the value of the Germany’s Leather Bags imports grew at an average rate of 1.6% per year, while the import volume declined by 9.4% per year. During the same time frame, the value of imports from developing countries declined by an average of 9.5% per year with Leather Bags from developing countries now constituting 11.5% of Germany’s imports in this product segment. The average unit price of leather bag imports is at €93 which is €41 higher than in 2016. The main leather bag brands include Aigner, Picard, Liebeskind, and Braun Büffel.

The Netherlands

The Netherlands is the fourth-largest import market for Leather Bags in Europe. In 2021, the value of its Leather Bags imports amounted to €278 million (up from €261 million in 2016). This corresponded to approx. 5.6 million units of Leather Bags. Between 2016 and 2021, the value of the Netherlands’s Leather Bags imports grew at an average rate of 1.3% per year, while the import volume grew by 1.6% per year. During the same time frame, the value of imports from developing countries declined by an average of 5.1% per year. Leather Bags from developing countries currently comprise 39.5% of the Netherlands’s imports in this product segment. The average unit price of leather bag imports is at €50, which is €0.9 lower than in 2016. The main Leather Bags brands include Ecco, Ellen Truijen, O My Bag, Bear Design, and Laauw.

Spain

Spain is the fifth-largest import market for Leather Bags in Europe. In 2021, the value of its Leather Bags imports amounted to €195 million (down from €217 million in 2016). This corresponded to approx. 3 million units of Leather Bags. Between 2016 and 2021, the value of Spain’s Leather Bags imports declined by an average rate of 2.1% per year, while the import volume declined by 9.8% per year. During the same time frame, the value of imports from developing countries declined by an average of 10.1% per year, with Leather Bags from developing countries comprising 19.5% of Spain’s imports in this product segment in 2021. The average unit price of leather bag imports is at €65, which is €23 higher than in 2016.

The main leather bag brands include Loewe, Cartujano, Iriarte Iriarte, and La Portegna.

Belgium

Belgium is the sixth-largest import market for Leather Bags in Europe. In 2021, the value of its Leather Bags imports amounted to €95 million (up from €85 million in 2016). This corresponded to approx. 2.3 million units of Leather Bags. Between 2016 and 2021, the value of Belgium’s Leather Bags imports grew at an average rate of 2.3% per year, while the import volume declined by 3.7% per year. During the same time frame, the value of imports from developing countries declined by an average of 8.1% per year. Leather Bags originating from developing countries now constitute 14.6% of Belgium’s imports. The average unit price of Leather Bags imports is €42, which is €11 higher than in 2016.

The main leather bag brands include Delvaux, Uitdenaad, Fashion club 70 and Rubinstein.

4. What trends offer opportunities or pose threats for the European Leather Bags market?

The Leather Bags market follows the general apparel trends related to sustainability, technological innovation and increased emphasis on corporate and social responsibility. For more information, see the CBI study on Trends in the Apparel market. Aside from these general trends, the Leather Bags market has its own, segment-specific trends: 

Raw material shortages cause producers to seek low-cost sourcing options

A global shortage of leather is affecting all levels of the supply chain. Manufacturing costs are rising and margins are shrinking. As supply struggles to meet demand, costs are being passed on to consumers. One example is the luxury handbags segment, in which prices are extremely high. Many manufacturers are looking for lower cost suppliers in developing countries.

Sustainable leather is growing

Sustainability awareness in Europe is creating good opportunities for sustainable leather. Sustainability in this product segment includes clean production and animal welfare. Sustainability initiatives also push for less overall leather consumption, as more leather means raising and slaughtering more cows. Companies are also increasingly using leather alternatives, such as leather-like materials produced from paper, cork, recycled rubber, waxed cotton, tree bark, apple waste, pineapple waste and mushrooms.  

Rising popularity of leather ‘man bags’

There is a growing interest among male consumers in leather fashion accessories such as ‘man bags’, bracelets, watch straps and belts. The trend is most popular in the United Kingdom.

Technology is creating new opportunities

Leather manufacturers are investing in advanced automated machinery and operation systems to streamline the production process and to make it faster and cheaper. Advanced processing techniques in leather manufacturing, such as digital cutting, more complex designs or blending with textile fabrics (e.g. silk leather) are increasing the popularity and the versatility of leather consumer goods. These technologies are paving the way for new and more complex designs, more fashionable colors and finer quality. Improved durability, softness, lightness and smoothness have made leather garments suitable for all seasons.

This study was carried out on behalf of CBI by M-Brain GmbH.

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