Exporting leather fashion accessories to Europe
As economic recovery in Europe spreads and gains momentum, Europe remains an attractive market for leather fashion accessories. The best ways to succeed on this market as a developing country exporter are to expand and to differentiate offerings with designs and styles that are in line with current European trends. Sustainability issues are also becoming increasingly important to buyers.
Contents of this page
- Product description
- Which European markets offer opportunities for exporters of leather fashion accessories?
- What trends offer opportunities on the European market for leather fashion accessories?
- What requirements should leather fashion accessories comply with to be allowed on the European market?
- What competition do you face on the European leather fashion accessories market?
- Through what channels can you get leather fashion accessories onto the European market?
- What are the end market prices for leather fashion accessories in Europe?
Leather fashion accessories are a sub-sector of apparel that includes products that are generally worn with – or supplementary to – clothing items. Like many garments, leather fashion accessories have functional as well as aesthetic value. Leather fashion accessories often have a longer life-cycle than garments and typical (non-leather) fashion accessories, especially high-end products that gain value over time.
This sub-sector consists of the following product groups and products:
Figure 1: Leather fashion accessories product group definitions
Key factors contributing to the quality of leather fashion accessories include:
- Overall construction: this is all about how the product has been constructed. The hardware, such as zippers, buckles and latches, must be durable. Stitching must be neat and straight. Good edging is also important; edges must be turned and sewn.
- Leather quality: the type and grade of the leather you use are important, as is its texture. Dyeing and finishing are also important.
Quality expectations differ from customer segment or retail outlet to another.
- Always make sure that the quality of a shipped batch of leather fashion accessories is consistent and meets pre-agreed specifications.
Figure 2: Examples of leather fashion accessories
There is currently no European framework for the labelling of leather products, aside from footwear. Some European countries have introduced mandatory national labelling systems for leather and leather products; others have implemented volunteer standards and labelling systems. Still, until now the term leather is poorly protected in most of Europe.
- Keep track of European voluntary authenticity labelling schemes for leather and leather products.
- Check for national leather labelling legislation in European countries you are targeting, such as Austria, Belgium, France, Italy, Lithuania and Spain.
The main factors to consider when choosing materials are the type and grade of leather. Leather for fashion accessories typically comes from cows, because of the availability and the quality and piece sizes cowhide produces.
However, pig leather is the cheapest, and is often used for accessories in the lower-range segments.
Leather from sheep, deer, horse, ostrich, alligator, kangaroo, frog, fish, stingray, or elephant is considered more exotic, and may be used in products for niche segments.
As the quality of synthetic leather rises, consumers can no longer tell the difference between real and fake leather. This is causing pressure on prices for genuine leather.
- Select your leather type with careful attention for its end use and market.
- Consider synthetic leather as a means of reducing cost or presenting buyers with a trendy alternative.
Colour and design
Although fashion accessories are usually purchased to match apparel, a leather fashion accessory, especially at the high end of the market, might be a statement piece around which an ensemble is created. Often trims provide designers with a way of creating a unique product. This means it is crucial to source new designs.
Similarly, buckles, zipper pullers or metal details can make or break a product. In this niche, Italy and France are still the most innovative countries.
- Keep in touch with European – espscially French and Italian – trends.
- Give more attention to product development in order to differentiate your offering with design features and style.
- Consider investing in after-treatment technology for embossing, laminating or printing.
- Expand your product range beyond traditional colours, sizes, shapes and designs to become more competitive and attract the attention of buyers.
- Source trims in Europe for new product development.
Your packaging must comply with all European requirements. These requirements aim to prevent packaging waste, to promote the reuse of packaging, and as such to reduce the final disposal of such waste.
Retailers are primarily responsible for the way products are packed for sale in shops. Often they will ask suppliers to do this for them.
Each individual accessory is wrapped with plastic and provided with a sticker providing information on brand, size, and kind of accessory. Similar items can be packed together in boxes.
- Find out whether you can save cost by reducing packaging or add margin by providing your buyer with the right packaging for the shop shelf.
Europe is a leader on the global market
Europe is an important player in the international leather trade. With some 25% of the world's leather production and one of the largest and most dynamic consumer markets for leather articles, Europe is a leading force in this business. It has a turnover of nearly €8 billion, over 3,000 companies and some 50,000 people directly employed in the sector. Europe's tanneries are highly competitive on the global market (source: Euroleather.com). European leather has a good name in quality and fashionable design.
The upward trend of both imports and exports of European leather fashion accessories indicates that there may be significant re-export opportunities for developing country exporters.
Raw materials shortages mean higher prices
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 along to consumers. One example is the luxury handbags segment, in which prices are sky-high.
European imports of leather fashion accessories increased until 2009, but growth decelerated in the years after that. In 2016, France Spain, Portugal and Germany were Europe’s largest leather importers, all ranking among the world’s top ten leather importers (source: worldsrichestcountries.com).
Leather bags are by far the largest product group in this segment. An interesting trend in leather bags is the rising popularity of ‘man bags’ for male consumers. This trend is hottest in the United Kingdom (see also the section in this study on trends).
China and India are the main suppliers
China and India have long been the main suppliers of leather fashion accessories to Europe, but China’s exports are declining. Imports from the Philippines have grown rapidly. Indonesian exports to Europe are also growing.
One reason for the decline of exports from China to Europe is that the Chinese goverment in the next few years plans to close thousands of factories that have a negative environmental impact. This means many European buyers are looking for alternative sources in the developing world.
European exports rising
Despite price pressure, exports of leather fashion accessories from Europe continue to rise. The main reason is that Europe has a reputation for high quality and design.
Important countries in Europe
Italy and France are important trading hubs and creative centres for leather fashion accessories; their brands remain very attractive to both traditional and new consumer countries.
Germany, Spain, the Netherlands, and the UK are also important destination markets, because they have broad market reach both inside and outside Europe.
East and Southeast European countries, such as Romania, have access to Europe as well as Russia, Turkey, and the Middle East.
- Try to address any of these national markets directly, or address buyers from traditional manufacturing countries exporting to potential countries.
- Aim to match European quality and design levels; if you do, your products will have potential worldwide.
- Contact buyers still sourcing in China and offer your company and country as a viable long-term alternative.
- Encourage buyers to spread their sourcing risk by including you as a supplier.
- Make an assessment of how sustainable your packaging is. Is it recyclable, reusable, low-waste? If it is not, see how you can change this; if it is, communicate this to buyers as an extra benefit.
European producers are seeking low-cost sourcing options
European leather production, which has a good name worldwide, is under pressure and many manufacturers are looking for lower-cost suppliers in developing countries.
As a developing country exporter you can contact European producers offering them lower costing.
- Keep up with and embrace new production and processing technologies, as they are likely to heavily influence the industry in the years ahead, sometimes also helping you to reduce cost.
- If you can access additional materials, such as textiles or silk, experiment with blending to create new products and concepts, as mixed materials can be cheaper, place less pressure on the environment and offer more varied design and functional opportunities.
Sustainable leather is growing
Sustainability awareness in Europe is creating good opportunities for sustainable leather. Sustainability in this sector includes clean production and animal welfare. Sustainability initiatives also push for less overall leather consumption, as more leather means raising and slaughtering more cows. And that means more greenhouse gas emissions and less land for more sustainable farming.
- If your sustainability performance as a leather fashion accessories manufacturer is below standard, now is the time to start improving it, as sustainability is very likely to spread into the mainstream leather market in the coming years.
- Consider eco-certification (you can find an example on the website of the Institute of Quality Certification for the Leather Sector, ICEC) if you want target higher-end segments.
- Offer guaranteed original designs to reach higher segments.
Technology is creating new opportunities
In view of soaring production costs, leather product manufacturers around the world are investing in advanced automated machinery and operation systems to streamline the production process. This will make production and processing cheaper and faster.
Advanced processing techniques in leather manufacturing – think, for example, of digital cutting, more complex designs or blending with textile fabrics – are increasing the popularity and the versatility of leather consumer goods. These technologies are paving the way for new and more complex designs, responsible dying into more fashionable colours, and finer qualities.
For example, improved durability, softness, lightness and smoothness have made leather garments suitable for all seasons, with ultra-thin leathers with a thickness of just 0.2 to 0.3mm becoming a stylish choice for spring/summer fashion.
Another tech-related trend is the emergence of more blended materials, such as silk leather made from blending textile fabrics with leather.
- Keep up with quality development, for example thinner leathers, and find out whether you can tap into these opportunities, or whether you should focus on alternatives, such as thicker, more robust leathers.
Another important trend that makes Europe an interesting market for leather fashion accessories is e-business. European consumers no longer buy all their clothes or accessories in physical shops; increasingly, they buy them online. Sellers can be big and small brands, multi-brand web shops, retailers and apparel chains.
Not only do consumers shop online, they also use the Internet and social media to follow trends and develop their own styles and preferences. This means being active on the Internet and in social media is a must on today’s market.
One important advantage of e-business is that offers you an opportunity to reach consumers more directly on the Internet.
- Learn much more about e-commerce opportunities in our study on trends in European apparel.
Rising demand for small leather carrying products
Changing consumer behaviour represent another reason why Europe is an interesting market for leather fashion accessories. For example, the multiplication of handheld (digital) devices – smartphones, tablets, cameras and more – has boosted demand for small leather carrying products.
‘Yummies’, young urban males, are discovering accessories
Another consumer trend is the growing interest among male consumers – als known as ‘Yummies’, or young urban males – in (leather) fashion accessories. The ‘man bag’ (see above) is a good example. Other examples: bracelets, watch straps, belts.
Affordable luxury is growing
A third consumer trend is the rising demand for ‘affordable luxury’. So-called ‘It bags’ have become popular status symbols and statement pieces in consumer wardrobes. While demand for high-luxury is robust, many European buyers are trading down to more affordable luxury brands, which continue to expand in Europe.
The lower and middle segments are still focused on volume sales, with retailers like H&M and River Island copying catwalk couture brands. These design-focused bags are trimmed to resemble high-end ‘logo-bags’ and use materials and techniques that are on trend, such as coated and laminated leather and embossed patterns.
- Explore the highly diverse market for leather bags for (handheld) devices in Europe and find out which segment you can serve: from exclusive high-end design to low-cost bulk.
- Find out more about Yummies and the market for men’s accessories in our study on the European market for fashion accessories.
- Learn more about general apparel trends in ourt study on trends on the European apparel market.
4 . What requirements should leather fashion accessories comply with to be allowed on the European market?
The requirements for leather fashion accessories can be divided into (1) musts, or legal requirements; (2) common requirements, the ones you need to comply with in order to keep up with your competitors; and (3) niche market requirements for this segment.
- Product safety: applicable to all products
- Chemicals requirements: specific for leather
- Labelling: specific rules for garments
- CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora): applicable to products made from wild plants and animals
The replacement of chrome in tanning
Currently there is a movement towards using replacements for chrome in the leather tanning process. The use of chromium VI content in leather products is already restricted in Europe; as of 2020, many large garment brands want to replace chrome entirely. The challenge is that very few replacements substances can deliver skins with the same handfeel as those tanned with chrome.
- Involve your chemicals supplier in trying to develop a tanning process with reduced or zero chrome.
- Check the sites of the chemicals firms mentioned above to get an idea of replacement solutions for chrome in the tanning process.
- If you use chrome in your tanning process, focus on removing it in the coming years.
- Check the extensive sustainability and general requirements in our study on buyer requirements on the European apparel market.
- For an overview of all legal requirements set for your product, see the http://trade.ec.europa.eu/tradehelp/ here you can identify your product code to get a list of requirements applicable.
- Study safety legislation and use your common sense to ensure your leather product does not tear, catch fire or cause any other danger in its normal use. These things may not be outlined in specific legislation, but are covered in the General Product Safety Directive in the EU Export Helpdesk.
- Familiarise yourself with the full list of restricted substances in leather products marketed in Europe by checking out restricted chemicals in textile and leather products in the EU Export Helpdesk.
- Read up on legislation regarding CITES in the EU Export Helpdesk and check the links to find out how CITES affects your business.
Common requirements are requirements regarding care labelling, sizing standards and good sustainability performance. Most buyers will expect you to comply with them, but they are not mandatory.
- Visit the GINETEX website to get an idea of common care labelling practices in Europe.
- As long there is no EU-wide legislation on sizing, use a recognised standard for your products.
In the leather fashion accessories market, there are many different niches. They can be defined by specific sustainability aspects they centre on, leather origins and qualities or other factors.
Certification, codes of conduct
One clear way of acquiring niche status is to get certification. There are many certification schemes for leather products and sustainable apparel, but the use of them is still a niche activity.
A good example is the OEKO-TEX Leather Standard, a global testing and certification system for leather and leather products. The Leather Working Group (LWG) also audits and rates leather producers; the organisation promotes the selection of rated suppliers for more sustainable leather. The Business Social Compliance Initiative (BSCI) is a broader supply chain management system that supports companies to drive social compliance and improvements within the factories and farms in their global supply chains.
- Visit the websites of some of the standards organisations mentioned above to get a clear idea of requirements and trends regarding sustainability.
- Consider certification not only as a means of making clear to customers what you stand for, but also a means of giving direction to your own sustainability development.
- Discuss with buyers which (sustainability) aspects matter most to them and try to match.
- Remember sustainability itself is not a selling point, but an added feature, on the mainstream market: always keep design, price and saleability in view as top selling points.
- If you are looking to focus on the ethical niche market, find business partners. These can range from large companies with sustainable product lines to specialised apparel buyers.
- For an extensive overview of legislative, common and niche requirements for the sustainable apparel market, read our study on sustainable apparel in Europe.
New entrants competition is moderate
If you want to enter the European fashion accessories market as a new supplier, your chances are reasonable. As a new entrant, you can start small by setting up an independent retail store specialising in one or more segments of the market, such as handbags.
Availability of raw materials tends to fluctuate. High hide prices and export or trade restrictions may present barriers to new entrants.
East Europe is expected to show stronger growth in the years ahead. This means it may be an attractive market for new entrants.
Substitution is moderate
For European buyers it is quite easy and cheap to swtich from one supplier to another. This means that as a supplier you have to be alert to competition from other players who want to take your place.
Substitutes to buying from third-party retailers can include buying directly from manufacturers through their websites or own retail shops.
A significant threat also comes from counterfeit and second-hand products.
Accessories made with new synthetic materials are also a potential substitute for leather fashion accessories.
The degree of rivalry is high
The market is highly fragmented and the degree of rivalry is high. Larger players, such as department stores, benefit from economies of scale that allow them to negotiate better, cheaper deals with suppliers.
The low cost of switching to other suppliers the relative ease of expansion fuels rivalry.
The leather accessories market also faces competition from other markets, such as clothing. Many consumers may as easily spend their money on fashion as they might on accessories.
Supplier power is moderate
The key suppliers in the leather accessories market are manufacturers and wholesalers, with retailers able to source from both. The manufacturing and wholesale field is highly fragmented, which makes supplier power moderate.
The ability of retailers to source from foreign manufacturers results in greater supplier fragmentation. A low level of differentiation further weakens supplier power.
Some manufacturers sell directly to consumers through their own retail shops; such suppliers hold considerably greater power over retailers.
Buyer power is moderate
Overall, buyer power in the leather accessories market is moderate. Handbags are more often influenced by fashion trends than other accessories. A greater degree of differentiation weakens buyer power when only select retailers stock certain products.
The manufacturer or designer of a leather handbag may enjoy greater brand loyalty than the retailer, which means retailers must stock that product to meet end-consumer demand.
The growth of ‘discount retailers’ allows more price-sensitive consumers to opt for discount rather than premium outlets.
- Identify as clearly as you can which leather segment you are best in – think, for example, of grade, quality, finishing or sustainability – and use your distinctive features to strengthen your competitive position.
- Create product differentiation using style and design in order to increase the competitive advantage of your product offering.
- Develop additional dimensions of sustainability as you move forward, for example waste reduction, or social engagement in your local community.
- Learn more about alternative materials and fibres in our studies on natural fibres on the European apparel market and man-made fibres on the German apparel market.
- Learn more about competitive forces in our study on competition on the European apparel market.
Generally speaking, the market channels and segments for leather fashion accessories are comparable to those of the wider (leather) apparel sector in Europe. The best opportunities for leather fashion accessories in Europe are in the mid- to high price levels. Here, volumes are low and quality levels are high. Handcraft is highly appreciated by European customers in these segments and is a strong selling point.
With moderate market-entry barriers, importers and wholesalers are the best way for small-to medium-size enterprises to bring products into Europe. Contact them directly via their representative and terms will be negotiated.
- Learn more about Europe’s apparel market in our study on channels and segments in European apparel.
The retail price for apparel in general is, typically, 4.5 to 6 times the Freight on Board (FOB) price Free on Board (FOB means the cost of delivering the goods to the nearest port is included but the buyer is responsible for the shipping from there and for all additional shipping fees).
Because leather production and the design and manufacturing of leather accessories is more costly than the segment average, prices also tend to be higher than they are in other fashion segments; there are significant margins on leather fashion accessories exported to Europe.
Environmentally conscious consumers are sometimes willing to pay up to 10-20% more for sustainable products.
- Whichever approach you choose to add value to your product, make sure you communicate it effectively in order to ensure appropriate margins.
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