With the rise of Internet marketing, people's consumption habits and lifestyles have undergone tremendous changes. Especially under the influence of the COVID-19 pandemic in 2020, live-streaming sales, content marketing, and new retail have become common sales models for people. As a result, people have higher demands for the quality of life, product quality and other aspects.
Compared with the deep brand accumulation in the international luggage industry, China's luggage industry started relatively late. However, with economic globalization and the continuous growth of China's economic level, the brand awareness of the domestic luggage industry has awakened. Riding on the favorable wind and adapting to the trend, it has carried out a brand-new transformation and upgrade, reshaped brand value, and ushered in a new development opportunity in the post-pandemic era.
The market is polarized, presenting an opportunity for Chinese luggage brands to break through
Today, China's luggage industry is not only the global manufacturing center but also the world's largest consumer market. China has tens of thousands of luggage manufacturing enterprises, which produce nearly one-third of the world's luggage. The recovery of the tourism market after the pandemic will further drive the development of the industry. It is expected that the global market size will reach approximately 211.2 billion US dollars by 2025. It is evident that the market volume of luggage in our country is huge and has been in a period of accelerated growth in recent years.
However, for a long time, the business model of the domestic luggage industry has mainly been dominated by professional manufacturers (ODM) and processing manufacturers (OEM), with the industrial chain concentrated on upstream auxiliary materials and midstream contract manufacturing. Processing manufacturers are generally small in scale but numerous in number, with low added value of their products and extremely fierce homogeneous competition. Professional manufacturers are relatively large in scale, possess certain R&D and design capabilities on their own, and most of them also operate their own brands. The operators of luggage brands mainly come from abroad and control the R&D design and sales links with the highest product profit margins.
The distribution of the domestic luggage industry chain is reflected in a serious polarization in the market. On the one hand, the domestic luggage industry is generally low-end, with weak brand power and low markup rates, and the unit price is generally below 500 yuan. Second, overseas brands dominate the high-end product line, with unit prices ranging from several thousand to tens of thousands of yuan, and the markup rate is high. The brand gap has become a good opportunity for the development of domestic high cost-performance luggage brands such as Aihua Shi and 90 Fen. Their suitcases priced between 300 and 1,000 yuan are selling extremely well. Before them, it was rather difficult to find a luggage product with high appearance standards, high cost performance and high quality in China. The current downstream consumer market is relatively fragmented. Consumers in third - and fourth-tier cities are still in the process of upgrading their consumption, while those in first - and second-tier cities are gradually becoming more rational in their consumption concepts, paying attention to high cost-performance products and personalized products. Changing the business model and innovating product thinking are the winning keys for the domestic luggage industry to further deepen the brand and expand the market.
