Leather Goods Market Size, Share & COVID-19 Impact Analysis, By Source (Full Grain Leather and Synthetic Leather), By Product (Apparel, Luggage, Footwear, and Others), By End-user (Men, Women, and Kids), and Regional Forecast, 2023-2030

The global leather goods market size was valued at USD 440.64 billion in 2022 and is projected to grow from USD 468.49 billion in 2023 to USD 738.61 billion by 2030, exhibiting a CAGR of 6.7% during the forecast period. Europe dominated the leather goods market with a market share of 37.72% in 2022.

Different leather types, such as full-grain and synthetic leather, are used to manufacture goods of different qualities such as top-grain leather goods, bonded leather goods, and others. The source material is treated with chemicals to preserve and make it safe for products such as footwear, luggage, apparel, and others. Companies focus on launching new product lines and developing sales channels as rising demand for leather goods is observed among men and women. For instance, in September 2021, Roots Corporation announced the launch of its new collection, One. As mentioned by the company’s CEO and President Meghan Roach, One is the series of changes made in the company, such as an online channel to focus on a gender-free shopping experience and One leather products, all of which are handcrafted in Canada from premium Italian leather.

Leather has been a choice of material for products including shoes, furniture, apparel, and others due to its high durability and comfort. The growth of the leather material is increasing owing to its increase in use in making saddles, shoes, and furniture for decades, and the industry has further expanded into accessories such as wallets, belts, handbags, and others. Technology today has further allowed innovation such as advancement in chemicals and a sophisticated method of processing leather. Thus, leather from the hides and skins of animals continues to be a luxury material of choice in the automotive, aviation, and marine industries.

LEATHER GOODS MARKET TRENDS

Growing Product Innovation and Development in Synthetic and Vegan Leather to Propel Market Expansion

The awareness of eco-friendly and cruelty-free products has increased exponentially in recent years. Thus, consumers are gaining more consciousness while purchasing products that are animal-based or which may have caused harm to animals during the production process of different goods. In addition, the number of synthetic leather applications in the automotive, clothing, and furniture industry is driving the growth of synthetic leather. For instance, in July 2022, the synthetic leather supplier with 29 years of experience, Sage-ONF, launched its silicone synthetic leather serial production. The company’s Shanghai, China plant has started the product.

Furthermore, vegan leather is mechanically created from food industry waste, such as mushroom leather, apple leather, and others. These alternatives are suitable for footwear and apparel production as they possess a smooth texture and durability due to the combination of PV-based coating. The product has observed a rising number of brands and new product launches, further fueling demand. For instance, in March 2021, a popular lifestyle brand, Lug, which specializes in handbags and accessories, launched its first-ever vegan collection. In addition, market players are investing in lab-grown leather startups to further fuel product innovation. For instance, in May 2022, Kering announced its investment of USD 46 million in VitroLabs, a startup that produces lab-grown leather. The investment is to assist in the commercialization of this lab-grown leather. 

DRIVING FACTORS

Rise in Demand for Luxury Goods to Propel Market Growth

Luxury goods have observed a rise in demand in recent years owing to the industry's rapid digital transformation and the number of new product launches. The emerging market, which includes developing countries such as India, is a significant growth contributor. The growing prevalence of original natural leather as a luxury product and the rise in the use of original leather in fashion shows and by designers are further driving the global market. For instance, in October 2022, Dior launched its Cruize 2023 collection, which included leather accessories and products reinventing the traditional Andalusian spirit combined with modern Dior designs. The e-commerce sales channel of luxury goods has significantly contributed to revenue growth due to its convenience. In addition, companies' efforts, such as omnichannel sales, will further fuel the demand and attract a larger audience. The rise in social media marketing trends by luxury brands has widened its reach by covering a large geographical region. In addition, the trend of online distribution channels has widened the customer reach and also led to increased sales and revenue for large and small businesses. Furthermore, the rising demand for customized and handmade luxury goods contributes to leather goods market growth. For instance, in November 2022, the custom leather brand, ‘By The Namesake launched its first flagship brick-and-mortar store in Toronto, offering small, customizable leather goods alongside a fully custom leather studio.

RESTRAINING FACTORS

Adverse Effect of Leather Production on the Environment to Restrain the Market Growth

The leather production process from animal skins and hides is currently linked to various sustainable issues such as deforestation, water wastage, gas emissions, and others. Furthermore, clearing different forests, such as Amazon, for cattle ranching for leather production contributes to climate change. The tanning process, while in production, is one of the significant contributors to environmental pollution as a higher percentage of production units still use chromium tanning.

For instance, in 2019, at the Copenhagen Fashion Summit, various fashion leaders, policymakers, and creative directors raised a demand for immediate action sustainability in the fashion industry. In addition, it was mentioned that if immediate actions are not taken, the industry will be a significant contributor to climate change and shall hinder achieving the Paris Agreement’s goal.

Multiple chemicals and gases are produced due to the tanning process. There are strict regulations for carcinogenic chromium (IV), which has forcefully closed the tanneries in Europe and the U.S. According to the EPA, 70% of the water pollution in the U.S. comes from factory farms. In addition, tannery workers are exposed to the risk of severe side- effects such as skin reactions, digestive problems, liver damage, cancer, and others.

SEGMENTATION

By Source Analysis

Rise in Applications of Synthetic Leather to Fuel the Market Growth

By source, the market is divided into full-grain leather and synthetic leather. Synthetic leather, also referred to as faux leather, has observed rapid penetration in this market owing to the rise in cost for full-grain leather and raising awareness of animal cruelty. Synthetic leather applications have steadily grown in automotive, aviation, accessories, and others. In addition, synthetic leather is cost-effective, due to which the demand for synthetic leather in the apparel and footwear industry is rising, further contributing to this market growth. In addition, market players are focused on acquisitions to meet consumers' fastest-growing demand. For instance, in April 2022, Coronet Spa, a synthetic leather producer, announced the acquisition of Synt3. The deal adds the three factors of Synt3, which will now aim to cover a larger market and further build a vast manufacturing process.

By Product Analysis

Rising Footwear Demand to Drive the Market Growth

By product, the market is divided into footwear, apparel, luggage, and others. The footwear segment has a significant share in the market owing to the high prevalence of more durable footwear from the consumer. In addition, market players focus on launching new products and are continuously involved in innovation in their product line-up, which further fuels market growth. For instance, in July 2022, Nike launched five new sneakers, including the Air Force 1 Low '07' 'Fresh, Air Max 97 Coconut Milk and Black, and Air Trainer 1 'Midnight Navy, which are made from different types of leather such as upper and premium leather. The growing demand for luxury and custom-made footwear significantly contributes to market growth. Thus, to cater to the increasing demand, in March 2020, La Marca, one of the leading brands in India, launched its store in Chennai. Furthermore, the apparel segment has shown rapid development in new designs, and the prevalence of designers toward full-grain leather in fashion shows further fuels the demand for leather apparel such as jackets, pants, skirts, and others.

By End-user Analysis

Rising Demand for Leather Goods Amongst Men to Fuel the Market Growth

By end-user, the market is divided into men, women, and kids. The men's segment has a higher market share owing to the higher requirement for leather shoes, formal wear, jackets, and other leather goods. In addition, the men's segment has seen a rise in demand for fashion apparel and luxury leather products. Thus, luxury brands and manufacturers are focused on the launch of new collections for men. For instance, in September 2022, Christian Dior launched the men's winter 2022 collection as the QueensPlaza. The luxury brand mentioned this to be its first launch at this scale for men's wear to fulfill the growing demand for men's luxury apparel.

Furthermore, the women's segment is also a significant contributor to the market growth owing to many products such as footwear, handbags, apparel, and other accessories. Handbags have observed a growing demand, making manufacturers launch new manufacturing units. For instance, in February 2022, Hermes International announced the launch of its two new manufacturing units in France. The two new plants shall further assist in catering to the growing demand for women's handbags. The kid's segment has shown steady growth, and new product launches will further bring more market opportunities.

REGIONAL INSIGHTS OF LEATHER GOODS MARKET

The regional analysis includes North America, Europe, Asia Pacific, South America, and the Middle East & Africa. The European region has a highly diverse consumer base with a growing demand for footwear, whereas the North American region has a substantial demand for luxury goods. The majority of manufacturers with high market share in luxury leather goods are present in the Europe region. In addition, with the higher tourism rate, the Europe segment can generate significant revenue in luxury leather goods.

Countries such as China and India are the major raw leather manufacturers that cater to the demand in Europe and North America. The footwear segment has seen substantial growth in demand in Asia Pacific. Furthermore, the rise in disposable income, urbanization, employment opportunities, and others are expected to drive market growth in this region. South America and MEA have been observing sustainable growth in recent years owing to the launch of new stores and infrastructural developments. North America, Europe, and Asia Pacific have shown a significant increase in new product launches and developments in vegan leather, also called synthetic or faux leather. Thus, growth in awareness and demand for vegan leather products can be observed in this region.   

KEY INDUSTRY PLAYERS

Key Industry Players Strongly Focus on the Launch of Innovative Products

Market players in the industry focus on innovations and product developments tailored to customer requirements and advanced technological adaptation. Manufacturers and developers are launching new footwear, apparel, and handbags to cater to the growing demand. Furthermore, new technological innovations such as plant-based and manufactured synthetic leather have increased competition. The manufacturers focused on growth investments in the development of vegan leather. For instance, in February 2021, Allbirts, a sustainably focused shoemaker, announced its investment of USD 2 million in Natural Fiber Welding. The investment is in the focus of developing shoes with vegan leather. Furthermore, key players are launching leather footwear to cater to the growing demand.

LIST OF KEY COMPANIES PROFILED:

• Hermes International (France)


• LVMH Moët Hennessy Louis Vuitton (France)


• Kering (France)


• Prada (Italy)


• Capri Holdings (U.S.)


• Vf Corporation (U.S.)


• Kuraray Co., Ltd. (Japan)


• H.R. Polycoats Pvt. Ltd. (India)


• Adriano Di Marti (Mexico)


• Broke Mate (India)

KEY INDUSTRY DEVELOPMENTS:

• January 2022 - Thrasio-Style Mensa Brands announced the acquisition of Estalon. The acquisition is to fulfill the rising demand for leather products, with the help of expanding the Thraiso-Style Mensa Brands footprint with the expertise of Estalon in data-based insights, digital marketing, and enhancing operational efficiencies.


• October 2021 - Roots announced the launch of new limited-edition leather jackets and handbags in collaboration with Révolutionnaire. The products are focused on inclusivity and social justice to cater to a larger audience.


• April 2021 - Adidas Ag announced the launch of its new shoes Stan Smith sneakers made from vegan leather for which a mushroom-based material is used. The new launch is a part of the company’s broader sustainability goals to fulfill the growing demand for sustainable products in the market.


• March 2021 - Hermès announced the launch of the new mushroom leather product line. After three years of making and developing in collaboration with MycoWorks, the company launched its products from Fine Mycelium. The material will be used to make Victoria’s Bags. This product innovation and development shall further help in gaining a competitive edge in the market.


• March 2021 - Stella McCartney announced its new product line of garments from Mylo, a leather made from mushrooms by Bolt Threads. This new product launch and collaboration in the vegan leather segment shall further build awareness and increase the demand for vegan leather products.

COVID-19 IMPACT

Market Observed a Decline in Product Demand During the COVID-19 Pandemic

The COVID-19 pandemic significantly impacted the global economy and multiple industries. A peak in the virus spread was observed in the second quarter of 2020, further resulting in lockdowns and restrictions the governments imposed around the globe to control the spread of infection. These government restrictions and regulations further halted the industries as all the manufacturing units except essential goods were shut down. In addition, as the borders were closed and travel restrictions were active, this further disrupted the supply chain. Thus, the closedown of manufacturing units, supply chain disruption, and economic slowdown severely impacted the leather goods industry.

As the rate of infection and spread was reduced and the restriction began to ease gradually, the economic activities bounced back later in 2020, particularly in Asia Pacific. The recovery was gradual in the second half of 2020, with manufacturing units and the supply chain returning on track. In addition, the large-scale recovery plans announced by the U.S. and the European Union additionally assisted the recovery and improved sustainable consumer spending.

REPORT COVERAGE

The global leather goods market research report analyzes the industry in-depth and highlights crucial aspects such as prominent companies, competitive landscape, source, product, and end-users. Besides this, the report provides insights into the market trends and highlights significant industry developments. In addition to the aspects mentioned earlier, the report encompasses several factors contributing to the market growth.

Report Scope & Segmentation