competition and higher raw material costs have made
it crucial for luggage suppliers in China to improve
the quality of new releases.
Speculations of US anti-dumping measures and a
reduced tax reimbursement rate early last year for
textile luggage in China were also among the reasons
behind the move to produce midrange and high-end
designs. But higher production costs and keen
competition have driven most makers to cut or stop
manufacturing low-end designs.
The majority of materials used in making luggage
are petroleum-based and heavily affected by the
fluctuation in crude oil prices in the world market.
The cost of ABS for example, the main material used
for the frames, increased 20 percent at the start of
the year while that of PVC and EVA grew 30 percent.
With the continuing increases in raw material
costs, makers have had no choice but to raise
prices. However, heightened competition is making it
difficult for these companies to offer the same
product type and quality at a higher price. As a
result, many suppliers have started producing more
upscale luggage, which commands a higher price. At
present, an estimated 30 percent of the country's
luggage suppliers are already focusing on high-end
Many of those that have shifted production focus
are now reaping the benefits. Export sales at these
companies have been growing at a healthy pace, and
many of them have had to boost capacity to meet
demand. Assembly lines at some factories have
already doubled in order to meet growing orders.
The majority of companies that kept their focus
on low-end luggage production, however, are
operating on razor-thin profit margins and a few
have already stopped operations.
China makers' move to upscale manufacture has
considerably raised export value. While the
country's outbound shipments in the line increased 7
percent in 2004, value grew by 18.5 percent with
average prices increasing 16.7 percent.
Prices are expected to climb by 5 to 15 percent
in the coming months as makers continue to expand
their upmarket product lines.
With export sales of 2.8 billion pieces worth US$3.8
billion in 2004, China is the world's foremost
producer of luggage, providing 75 percent of global
supply. Eighty-five percent of the country's luggage
exports is shipped to OEM/ ODM buyers, with the
balance sold under suppliers' own brands.
There are currently around 1,500 luggage
suppliers in the country, of which 70 percent export
directly or through trading companies. On average,
makers export 85 percent of output, mainly to the
US, the EU, and Japan. Many of these are shipped to
major luggage brands Samsonite, Delsey, Titan,
Roncato, and High Sierra.
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