The evolution of the Bags industry under the financial turmoil – ABS Yoga Netipot
China luggage market has always been export-oriented and domestic market demand, a relatively small proportion, but in the face of the new economic environment, this situation may be adjusted in the future. The world’s leading growth consulting company Frost & Sullivan, recently pointed out that, due to China’s economic situation has improved, post-Olympic period and the 2010 World Expo will bring opportunities for tourism growth, the domestic luggage market demand for faster growth; while the export of environmental degradation, subject to certain overseas markets, the impact of . Overall, the luggage market, though still in a growth period, but the growth rate slowed.
China luggage Although the development of a relatively short history, but its rapid growth, it has become the world’s biggest bag production base in the domestic consumer market is also very great future potential. According to Frost & Sullivan to statistics, in 2008 China’s output of nearly 700 bags industry billion, of which the domestic market capacity of nearly 20 billion yuan. Exports are still the luggage industry is the primary means of living space, China’s supply of more than a quarter of the world’s supply of bags, most of which export Europe and North America. However, according to Chinese customs data show that January-July 2009 exports of China’s luggage was 69.8 billion U.S. dollars, compared with the same period last year fell 7.2%.
Other hand, domestic markets, growth factors from the industry point of view, sustained economic growth and rising domestic demand, one of the most important reason. Optimistic economic data showed improving people’s lives to drive the retail and tourism development, and directly contributed to the domestic luggage industry. To improve the quality of life of consumers of products and services are more popular, such as travel bags and back bags of these products have gradually become an indispensable part of daily necessities. While the international financial crisis on the domestic economy to a certain degree of impact, but the domestic market has become global market leaders to lead growth factor out of the predicament, the domestic economic situation is gradually returning to normal high-speed development. The foreseeable future, the domestic market for luggage industry, demand will rise, and indeed, could in the future than it exports to become a major market demand.
In addition, China’s growing tourism industry will also greatly promote the luggage industry. 2008 Olympic Games brings to consumers the “post-Olympic effect”, people still have a certain inertia luggage market demand, the Olympics has changed a lot of people’s spending habits, people’s travel preferences gradually. Understanding by foreign countries against China by the Olympics have been deepened and tourist trips to China on the rise. 2010 will be held in Shanghai World Expo will also attract more and more foreign tourists came to Shanghai in China, domestic tourists travel trips are also bound to be increased considerably. The vigorous development of the tourism industry and will certainly drive demand for the product on the luggage, luggage industry is expected to find a new growth point.
The Challenges and Opportunities in China luggage industry, while also facing greater challenges. The biggest challenge is the deteriorating export environment. In general, exchange rate fluctuations, a drop in demand abroad, and trade barriers within the health impact or triple bag the Chinese enterprises are facing deteriorating export environment, gradually lower profit margins, small and medium-scale processing on behalf of the business model in order to make the weak processing costs The businesses were hit, many companies directly out of the market.
Second, the ever-increasing cost of production has become a key factor constraining development of the industry. The majority of our luggage is taking the low-cost expansion of business in order to win the amount of development model, the price is low, profit margins, price competition is often the small and medium local manufacturers vying for market share of the primary means. However, in recent years, leather, nylon, polyester fiber and other raw materials prices are rising, the future growth trend is also more obvious, which to some extent, to suppress the profit margins of these companies and growth strategy, its role in the development of block produced. However, the industry’s leading enterprises are less affected, mainly because of its stronger bargaining power of suppliers, and suppliers is relatively stable, the cost is usually less able to control to some extent. In addition, China luggage on the market flooded with a large number of fake and shoddy products to the domestic manufacturers to bring the image of a certain negative impact on low level of industrial technology, which will have a deterrent effect on the development of the industry.
So, in such an opportunity and challenges of the industry, these bags manufacturers how to become bigger and stronger then? Frost & Sullivan suggested that
First of all, in the consolidation of a good low-end market conditions and take the brand innovation. Improve the market price system, and avoid vicious competition, qualified enterprises should gradually began to establish their own brand or increase brand investment, and gradually in the regional markets as well as the domestic market to win recognition.
Second, do product innovation and product upgrades. Material selection and further diversification, more attention to the latest international trend information to enhance their design capabilities. Should be to break the traditional pattern of small workshops, the introduction of advanced equipment, increase the technological input.
Finally, the improvement of sales channels. More and more luggage manufacturers have begun to directly face the end-consumer, integrated production, distribution and sales of the Trinity, “channel is king” concept has become increasingly recognized as an industry person. Physical stores in broadening sales channels, while also actively promoting the new network of sales channels, looking for new business development direction.
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