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The Market for Leather Garments in the European Union

1.0 Consumption
1.1 Market size
The global market for leather garments can be estimated at almost € 18 billion in 2008, of which the EU accounted for 32%, North America (including the USA) 30%, Asia Pacific (including Japan) 27%, Latin America 5% and other regions 6%.

Total EU consumption of leather garments amounted to € 5.7 billion in 2008.

Table 1 Consumption of leather garments in the EU, 2004-2010, in € million

 2004 2006 2008 AAGR* Share in 2010
    2004-08 2008 forecasts
Italy 1013.4 1105.5 1086.2 +1.8% 19.0% 1045.0
Germany 1048.3 1028.1 1013.1 -0.8% 17.7% 1000.0
UK 910.3 915.8 897.6 -0.3% 15.7% 890.0
France 832.2 813.7 818.1 -0.4% 14.3% 815.0
Spain 472.6 483.5 467.8 -0.2% 8.2% 450.0
Netherlands 176.2 184.4 189.1 +1.8% 3.3% 185.0
Austria 144.8 148.4 149.4 +0.8% 2.6% 145.0
Belgium 153.4 148.9 147.1 -1.0% 2.6% 144.0
Sweden 129.5 135.8 139.2 +1.9% 2.4% 134.0
Greece 119.6 127.4 117.2 -0.3% 2.0% 117.0
EU 5607.4 5768.3 5731.6 +0.6% 100.0% 5619.0

2.0 Market segmentation
Criteria for market segmentation of leather garments in the EU are;

•Socio-demographics- The size and age structure of the population is one of the basic determinants of which products will be bought and how much will be spent on clothing.
•Segmentation by type of product - Most of the items sold in the EU are jackets. The other products are coats, trousers, leggings, skirts, vests and dresses and, to a lesser degree shirts, shorts, underwear, bikinis etc.


•Segmentation by type of activity-In general, the leather garments market can be divided into several segments, e.g. formal, (smart) casual, leisure and active sports segments.
Segmentation by attitude towards fashion -Elements of fashion are: color, design, kind of leather, exclusivity and style.
•Segmentation by price/quality ratio decade.

2.1 The role of DCs
The EU member states imported 43.9 thousand tonnes of leather garments with a value of € 1.6 billion in 2008. Imports fluctuated slightly during the period under review and showed the biggest growth compared to the previous year in 2008 (+2.2%). DCs play a dominating role in EU imports of leather garments. In terms of value, 61% of total imports came from these countries

•Growing imports (2% in value terms) came from Asian DCs, like India (33%) and Pakistan (29%) and despite falling imports from China (25%). Other Asian countries accounting for increasing imports during the review period were Vietnam, Sri Lanka, Bangladesh and Thailand. Import from Asian DCs accounted for 80% of total imports from DCs.
•Imports from European DCs increased by 6% in 2006-2008. It should be noted that Turkish exports to the EU grew (+3% during 2006-2008). Other significant exporting countries from Europe were Ukraine (+39%), Croatia (-16%), Bosnia & Herzegovina (+102%) and new supplier Moldova. European countries accounted for 19% of total imports from DCs.

Table: 2 Imports of leather garments from developing countries

 2004 2006 2008
 1,000 1,000 1,000
 million tonnes million tonnes million tonnes
Total EU 1002.1 34.4 970.1 33.6 983.4 29.9
Germany 290.8 10.5 262.1 8.6 268.9 7.7
Italy 120.6 3.2 128.8 3.3 141.2 3.1
France 92.0 2.8 109.5 3.2 118.6 2.9
Spain 132.7 3.6 115.8 3.7 116.5 3.3
UK 112.4 4.5 93.3 4.3 86.8 3.2
Netherlands 63.3 2.4 72.9 2.8 71.6 2.7

 

 

 

 

 

 

• Imports from North African countries decreased by 6% in the review period. It should be noted that exports by Morocco and Tunisia fell by respectively 5% and 44%.
• Imports of leather garments from other area were very limited or zero.

3.0 Market access requirements
As a manufacturer in a DC preparing to access EU markets, you should be aware of the market access requirements of your trading partners and the EU governments. Requirements are demanded through legislation and through labels, codes and management systems. These requirements are based on environmental, consumer health and safety and social concerns. You need to comply with EU legislation and have to be aware of the additional non-legislative requirements which your trading partners in the EU might request.

3.1 Standards and requirements
There is no European Union standard or any other official standard for leather garments. Most of the importers, especially the retail organizations, work on the basis of certain minimum requirements. In view of this, they have formulated and stipulated minimum quality requirements, relating to both materials and manufacture. The main physical tests are tear strength, flex crack resistance of the finish (in normal and cold conditions) and dimensional stability to dry cleaning.
1.Packaging - Care must be given to the packaging of products, if one intends to export to the EU countries products should also be protected against the elements, changes of temperature, rough handling and theft.
2.Size marking - The following body measurements are used in the EU: body length, chest, waist and hip size. These four basic measurements determine the fitting of the garments.
3.Labeling - Basic information like brand name and size is extended with information about Materials used, Country of origin, Leather garment care instructions; to avoid claims, special (or professional) dry cleaning, the official language of the country has to be used on the labels, the mandatory requirements are mentioned in the relevant country surveys, the place of the label in garments varies (mostly neck or side-seam) and can be part of the importer’s requirements.

Exporters should discuss this in detail with (potential) clients, to obtain clear information.
•Tariffs and quotas
•Anti-dumping measures
•Anti-fraud investigations and actions
•Environmental legislation

4.0 Opportunities for DCs exporters
•The decrease of production in the major EU countries has led to a further sourcing of products in low-cost countries, including products with a higher design content. Besides the traditional lower range market segment, the largest middle range market segment may also offer good opportunities for exporters in DCs.
•There is a tendency to use more leather looks made of man-made fibres, at the expense of genuine leather in particular in the mid and lower segments of the market. Caused by economic developments, many consumers on lower incomes will continue to seek low priced clothes.
•It should be noted that exporters in DCs will be faced with demands for high quality, reliability in deliveries and ethical aspects about manufacturing. Effective competition by DCs requires knowledge of the legal, technical, quality and fashion requirements. In addition, they must make resources available, not only to monitor and understand developments in the target countries, but also to ensure that quality requirements are strictly met.
•Production strategies for exporters in DCs can be concentrated either on increasing volumes, based on experience and trying to obtain a higher degree of efficiency in production, or on shifting production profiles and specialize in higher-value products. Both production strategies have to be combined with the recommendations mentioned earlier.
•A start, which involves limited risks and is chosen by the majority of exporters in DCs, is to try to acquire fixed orders for products specified by the client. The latter is at home in his market and knows all the “ins and outs” of his permanently changing market place. The most important determining factors for exporters operating on this basis are the combination of price, product quality and reliability of deliveries and delivery times. More further-reaching forms of potential co-operation are joint ventures and co-makership agreements

 
 
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