Title: With Over 70% Global Production Share, When Will China's Bag Industry Truly Conquer the World?

Finding "Opportunity" in "Crisis"

Leather Industry Capital Going Global Emerges as New Trend

According to the Baggage and Leather Goods Committee of China Leather Industry Association, the traditional factors that once drove the growth of the luggage and bag industry are fading. However, new driving forces are taking shape, presenting opportunities amidst the current challenges. Bolstered by these new dynamics, premium product exports and industrial capital going global may represent a viable future development path.

Data from the China Leather Industry Association reveals that China is the world's largest manufacturer of luggage and bags. The industry is characterized by low market concentration among leading players, indicating it's far from an era of stock competition. In terms of business models, the industry is primarily divided into three types: OEM manufacturers, ODM manufacturers, and brand operators. The Chinese market is predominantly composed of ODM/OEM businesses, with production capacity distributed across Guangdong, Zhejiang, Baigou in Hebei, Shaodong in Hunan, and Nantai in Liaoning. China's bag manufacturing output already accounts for over 70% of the global share.

"Although the traditional factors driving the industry's growth are diminishing," the association notes, "new forces such as consumption upgrading, intelligent manufacturing, digital transformation, and regional coordination are emerging, creating opportunities within the crisis."

So, what are these opportunities, empowered by these new drivers?

In recent years, the sector for Chinese bags going global has heated up significantly. In just the first eight months of last year, China's cumulative export value of luggage and similar containers reached $22.78 billion, a year-on-year increase of 34%. Within this booming market, numerous differentiated, high-quality Chinese export brands have emerged. Furthermore, it's evident that the overseas expansion of China's leather industry is rapidly transitioning from product exports to industrial capital going global, represented by moving production capacity, brands, and entire supply chains abroad.

For expanding into overseas markets, besides relying on high-quality cross-border logistics services, companies can also consider promoting localized production strategies abroad. Many Chinese companies have already invested in setting up factories in Thailand. As an important economy in Southeast Asia with a relatively stable economic environment and labor costs approximately 40% lower than domestically, establishing production and sales bases in Thailand can significantly reduce production costs and effectively mitigate the impact of US tariff hikes.

China's bag industry holds advantages internationally due to its complete industrial chain, strong manufacturing capabilities, and innovation capacity. Leveraging these strengths to "go global" can be termed a significant "opportunity."

Additionally, many bag enterprises are participating in the design, development, production, and sales of products for internationally renowned brands. They are also increasing investment in product R&D and equipment upgrades, further expanding production capacity while better meeting market demand.

Recently, in the sampling workshop of Fujian Sharmate Smart Luggage factory, workers were busy rushing to produce the latest batch of electric rideable suitcases. A representative from the factory explained that larger-scale bag manufacturers like theirs are continuously enhancing product innovation capabilities to meet consumers' growing demand for functional features in baggage products. "For example, this rideable suitcase can be steered and have its speed controlled via a handlebar. It's very suitable for large exhibition halls and airports, and the 20-inch lightweight version can be conveniently taken onboard aircraft," they said. Reportedly, the company has already received orders for tens of thousands of units from both domestic and international clients.

The China Leather Industry Association states that currently, characterized by digitalization, green development, and integration, the new industrial revolution is deepening. Within the "technology-factor-industry" transmission, China's bag industry is accelerating the formation of new quality productive forces.

"We are witnessing transformations across the entire industry: from continuous improvement in design innovation to the relentless pursuit of excellence in production processes; from the rapid advancement of intelligent manufacturing to the integrated innovation of cultural heritage; from the courageous expansion into markets to the meticulous cultivation of brand building," the association commented. "Looking ahead, the bag industry must keep pace with technological development to meet the demands of consumption upgrading; adhere to innovation-driven strategies, deepen brand building, and enhance product added value; uphold green principles to construct a sustainable industrial ecosystem; and actively explore international markets, allowing the world to witness the charm and elegance of Chinese bags."