These 11 countries together accounts for nearly 78.20% of India’s total leather products export.
Export of leather & leather products to Germany USA UK Italy France Hong Kong Spain Netherlands Russia New Zealand Canada South Africa UAE and Japan have shown positive growth during the period of April-January 2010-11.
Export of leather & leather products to Australia Greece Switzerland Portugal and Ireland have shown a decline in exports during the period of 2010-11.
The latest data available now for the export of leather and leather products made during the period April –November 2010 i.e. US$ 2244.35 million as against US$ 1916.91 million in the corresponding period last year shows that there is a positive growth of 17.08% and Indian leather industry is marching forward leaving the recession behind.
Spain Overview
Analysis of the Spanish Leather Industry
The Spanish leather industry is mainly composed of Leather garments Leather goods including Luggage Bags and Footwear. We will analyze each section in detail but first we will explain the overall trade including export and import of Spanish leather goods.
Figure 3: Diagrammatic representation of Spanish Leather Industry
In Spain the leather and tannery sectors consists mainly of small and medium enterprises, most of which are by tradition family businesses. The Spanish tannery products have suffered a serious recession in the period 2000 – 2005. Out of 223 enterprises in 2000 only 156 were left by 2005 marking a significant reduction by 30%. The number of workers has dropped as well by 36% (out of 7,400 workers in 2000 only 4,700 were left by 2005) as well as the tannery industry production which was reduced by 34%.
Table 5: List of Leather products imported by Spain (thousand USD)
Sources: ITC calculations based on Euro stat statistics since January 2010. ITC calculations based on COMTRADE statistics until January 2010.
Spain ranked fourth in imports of leather behind Germany France and Italy and above the UK. In 2008 most Spanish imports of leather came from India Pakistan Turkey and China. 73% of Spanish imports came from these four countries.
Figure 4: Graphical representation of Spanish imports from 2006-2010
The tannery industry represents 1% of the Spanish GDP. It is worth mentioning that in the international market the Spanish leather products distinguish for their quality of materials and their excellent finishing. After a long transitory process the enterprises of the industry succeeded in adapting their needs to the increasingly competitive market recognizing that the only solution to deal with recession due to globalization was to focus on innovative designs and on the quality of products
Table 6: List of Leather products exported by Spain (thousand USD)
Sources: ITC calculations based on Eurostat statistics since January 2010.
ITC calculations based on COMTRADE statistics until January 2010.
Figure 5: Graphical representation of Spanish export from 2006-2010
The leather industry has marked a considerable increase of exports lately, mainly in 2001, when sales abroad increased by 15,6%. The rate of exports against the total production indicates that there is a trend of expanding abroad by 18%, a rate which increases continuously thanks to the international recognition of most enterprises. The Spanish enterprises in order to deal with the current economic recession due to the crisis in terms of consumption in all countries that were by tradition considered as having big purchasing power and to the currency exchange rate between dollar and Euro, became more competitive by applying the suitable development strategies.
Spanish Leather garments Industry
Consumption
Spain is the fifth largest leather garments market in the EU after Italy Germany the UK and France with a value of almost 468 million in 2008. Consumption of leather garments fell on average 0.2 % per annum in the period 2004-2008 but fluctuated more strongly. Spain is the second largest manufacturing country (Italy is no. 1) in the EU for leather garments. Leather garments accounted for 10 % of total leather garments production in the EU in 2008.
Table 7: Consumption of leather garments in Spain 2004-2010 in € million
* Average annual growth
Sources: Euro stat (2009) and Euro monitor (2009).
Spain ranked 5th in 2008 as EU´s import of leather garments were off almost € 151 million in 2008. Caused by the (international) financial and economic crisis and the Spanish recession consumer expenditure on leather garments decreased 3% in 2008; furthermore trade experts forecasted additional declines for 2009 (-3%) and 2010 (-1%)
Table 8: Leather garments consumption by gender in Spain 2004-2008 in € million
*Average annual growth
Source: Trade estimates
Trends in consumption
- The value-for-money concept is still an important factor in purchasing decisions for Spanish consumers. They are equally concerned with the quality of the products projecting a sophisticated appearance and are brand-conscious. However due to the recession the price factor became more important.
- Contrary to men’s wear women’s wear will be more feminine and will have fewer casual
details and Consumers become more aware of sustainability issues.
Production
Spain is the second largest leather clothing manufacturing country in the EU behind Italy and
before France accounting for 10.3% of total EU production. According to Euro stat/Prodcom
production of leather garments decreased almost 5% annually to an estimated € 190 million in
2008. Leather garments accounted for 3.6% of total clothing production in Spain in 2008. The number of companies and employees active in the leather garments industry has not been encountered.
Table 9: Production of leather garments in Spain 2004-2008 in € million and ‘000 kg
* Average annual growth influenced by outsourcing policies adopted by companies.
Source: Eurostat/Prodcom (2009)
Major players
Torras ();
Confecciones Munper ();
Titto Bluni ();
Dyapell ();
Pell Xavier ();
Makari ();
Saga Ibáñez ()
Wholesale trade and Retail trade
An important wholesalers’ centre is located in the locality of Fuenlabrada a neighborhood of Madrid. Information about Spanish wholesalers can be found on the website a business-to-business market place for the fashion industry. A selection of Spanish wholesalers can also be made by searching through the several (free) available trade directories. Some wholesalers are: Acsa ().
• Inditex () operates with formulas like among others: Zara Pull &
Bear Massimi Dutti Bershka and Stradivarius; in a total of over 4264 stores in 73+ countries. The
major chain Zara operates through 1272+ stores (of which 330+ in Spain) and includes
leather garments in its assortment.
• Grupo Cortefiel () operates through its five brands (Cortefiel Pedro del Hierro Springfield Milano and Women’s Secret) in 27 countries through 1223 stores. The Springfield formula includes 545 stores of which 239 are located in Spain.
• Mango ( and part of the Punto Group) 253 general women’s wear
stores in Spain and is active in 94 countries with 1031 points of sale across the world
• Induyco () three women’s wear chains on franchise basis: Tintoretto (200 shops in 12 countries of which 152 in Spain) Sintesis (110) and Amitié
(101).
Spanish Footwear Industry
Consumption
Spanish consumption of footwear was € 4.1 billion in 2008 or 140 million pairs up by an annual average of 1.2% over the period while production fell by 4.7% to € 1.8 billion or 109 million pairs.
In 2008 Spain imported footwear valued at € 1.7 billion or 375 million pairs. Since 2004 values are up by 10% but volumes are up by an average annual rate of 20%.
The footwear market in Spain was valued at € 4.1 billion in 2008 in terms of retail sales registering an average annual increase of 1.2% since 2004 being above the EU average of0.3% over the same period.
Spain is the fifth largest EU market for footwear. It is smaller than Germany France the UK and Italy but Spain is well ahead of the Netherlands the next largest market.
In 2008 Spain accounted for 8.3% of EU footwear consumption (6.6% by volume).
Table 10: Consumption of footwear in Spain 2004-2008 € million / millions of pairs
Source: Euro monitor FICE (2010)
Increases in volume were particularly strong in 2005 and 2006 due to an oversupply of cheap imported footwear from Asia. Both specialist and non-specialist retailers were holding high stock levels. This has forced them to reduce prices to move stocks. Spanish consumers have benefited from this by increasing the volume of their purchases.
Product groups
-
Casual footwear with a steady increasing share now accounting for 51% of the market or € 2.1 billion. The dress codes at work are less formal and the quality and design of casual footwear have been improved.
-
Sports footwear accounted for over 22% of the market or € 916 million and has increased by volume due to the popularity of sneakers. Particularly urban style sneakers have been a hot item among young Spanish people.
-
Formal footwear with a decreasing share accounted in 2008 for 20% of the market or € 818 million. However formal dressing remains important in some occasions or in some (professional) environments.
-
Evening footwear an increasing segment accounted for 7% of the market or € 288 million. Similar developments as in the other EU countries take place in Spain.
Brands
•The ‘Zapatos de España’ (Shoes from Spain) label. Next to the international brands the following brands are prevalent is Spain:
• Luxury segment: Carolina Herrera Christina Castañer Emanuel Úngaro Jaime Mascaró Magrit and Tony Mora.
• Fine and medium segments: Bitter Sweet Camper Dechics Fluchos Pikolinos Sendra Sancho Panama Jack Destroy Pura Lopez Yanko Farrutx Red Storm Silva and Wonders.
Trends in Consumption
Women’s footwear is the largest segment and was valued at € 2.3 billion in 2008. A survey that was published in 2007 by the Footwear Manufacturers Association claims footwear is the most valued accessory among Spanish women.
Even if the unemployment is high women increasingly tend to buy the right type of footwear along with clothing outfits. They place great emphasis on their outward and physical appearance for example during the evening walks in town and cities and increasingly at work.
Source: Euro Monitor 2009
Figure 6: Spanish footwear consumption by user % value 2008
Men’s footwear was valued at € 1.1 billion up from € 989 million in 2004. Men’s fashion has become more casual with well-designed combinations of casual and formal outfits. The Spanish
manufacturers offer more choices in stylish casual shoes boots (Western or Mountain-style)
and in sporty sneakers.
Children’s footwear was valued at € 711 million in 2008. Due to the economic recession and more availability of children’s footwear in supermarkets and factory outlets volume sales rose fast while value sales decreased since 2006.
Tourists coming from other EU countries and increasingly from Asia and Eastern EU countries composed another interesting segment. According to the Spanish Footwear Federation (FICE) they represented almost 90 million people in 2008. Assuming that a tourist buys one pair of either
fashionable footwear flip-flops slippers or sneakers this means a potential market segment
of 90 million pairs.
Production
Spain is the third largest producer of footwear in the EU after Italy and Germany.
Production has been falling for a number of years and activity was affected by various negative factors. These have included the dollar/euro exchange rate which has affected export sales in the USA and stagnant sales in France and Germany the two main EU markets.
Table 11: Production of footwear in Spain 2004-2008 € million / millions of pairs
Source: FICE (2009)
The Valencia region with the main centres of activity in Elche Elda and Villena in the province of Alicante and Vall de Uxo in Castellon account for two thirds of the industry followed by
production centres in Castilla La Mancha La Rioja Majorca and Minorca.
Although production is decreasing in this region design and marketing is still primarily controlled from here. Nearly 32% of all companies employed between 3 and 5 people.
Main and interesting players
• Coflusa is the main manufacturer owner of the Camper brand ().
• Bunker located in Almansa ().
•Romu’s located in Salinas makes comfortable and fashionable footwear. ().
• Footwear Circus located in Monovar produces leather footwear. They are specialized in the
production of moccasins ().
• PieSanto located in Elche Alicante is a manufacturer of comfortable and formal footwear for
women. ().
• El Naturalista located in Multiva Alta is a designer and producer of leather and natural
footwear. ().
Statistics and Summary about Spanish footwear industry Export and Import data
Import
6.5% of all EU imports 12% by volume. This represented an average annual increase in value of 10% since 2004 from almost € 1.2 billion (20% in volume from 178 million pairs).Spain was the sixth largest importer of footwear after Germany, Italy, France, UK and Belgium. Countries with similar levels of imports were Belgium and the Netherlands. It ranked fourth in volume terms, behind Germany, UK and France. This growth in imports contrasted with a 1% fall in exports (a decrease of 17% by volume). Import values were slightly greater than export values but import volumes were 1.9 times greater than export volumes. Production continued to fall in Spain and the consumer market has grown at a rate above the EU average.
On the surface, Spain does not appear to be a country of re-exports, but there may be some re-export with Portugal. Imports have taken an increasing share of local consumption, particularly for lower-priced footwear. Falling production has resulted in falling exports, but also a loss in domestic share for Spanish producers. The share of imports by developing countries was up from 41% in 2004 in value, and down from 75% or 134 million pairs in volume. Increases were registered in the footwear supplies of China, Vietnam, India, Morocco, Brazil, Bangladesh and Tunisia. There were falling supplies from Indonesia and Thailand.
Exports
In 2008, Spain exported footwear valued at € 1.7 billion, or 198 million pairs. This represented an average annual decrease in value of 1% from € 1.8 billion, and an average annual increase of 16.9% in volume since 2004 from 106 million pairs. In 2008, Spain was the fourth largest exporter by value after Italy, Germany and Belgium. Its value was also close to the Netherlands. It was second in volume, behind Italy. Re-exports from Spain exist but are not significant in the same way as Belgium or the Netherlands. Around 75% of Spanish exports were intra-EU (89% by volume). In terms of product groups, leather footwear was valued at € 1.2 billion or 84 million pairs, down an annual average of 3.2% from € 1.4 billion and up 7.9% by volume from 62 million pairs in 2004. Outdoor leather footwear with other outer soles dominated this group of exports.
The main destinations were France, Germany, Italy and the UK. The next largest group of exports were textile footwear, which was valued at € 272 million or 29.5 million pairs, up 10% from € 186 million and up 0.7% by volume from 29 million pairs in 2004. Textile outdoor footwear with rubber or plastic was the leading sub-group. France, Italy and USA were the main destinations. Other footwear accounted for € 144 million or 3 million pairs. This was unchanged from the value accounted for by other footwear in 2004 but up 11% by volume from 2 million pairs.
Other parts of footwear were the largest sub-group. Morocco, France and Germany were the principle destination countries. Rubber or plastic footwear was valued at € 128 million or 81 million pairs. This was up 1.4% from € 121 million and up 58% by volume from 13 million pairs in 2004. Outdoor plastic footwear was the largest sub-group. France, Portugal and Italy were the main destinations.
Table 12: Spanish imports of footwear 2006-2010
Source: FICE
Figure 7. Diagramatic representation of Spanish imports of footwear 2006-2010
Table 13: Spanish Export of footwear 2009-2010
Source: FICE
Figure 7. Diagramatic representation of Spanish exports of footwear 2006-2010
Spanish Luggage and Bags Market
Consumption
The Spanish market for luggage and leather goods was valued at € 1.1 billion in 2008 registering an average annual increase of 4.1% since 2004 ahead of the EU average of 3.4% over the same period. Spain was the fifth largest EU market behind Germany France Italy and the UK. Sales fell more sharply in 2009 as the global economic recession resulted in Spanish consumers cutting back sharply on sales of luxury goods particularly leather goods.
Table 14: Consumption of luggage and leather goods in Spain 2004 - 2008 € million
Source: Spanish Leather Goods Manufacturers Association (2009)
Luggage represented € 322 million of which suitcases accounted for € 211 million or 19% of the market. This sub-group was smaller in Spain than most leading EU member States with the exception of Italy.
Hard suitcases held a higher share but this is now changing. Both business travellers and tourists now look for compact and flexible cases of a better quality. Samsonite is the clear market leader. Travel bags and other bags which include hold-alls backpacks rucksacks sports bags shopping bags and all kinds of other bags represented € 111 million or 10% of the market.
Source: Euromonitor, Trade estimates (2009)
Figure 9: Spanish luggage and leather goods consumption by product % value 2008
Luggage
Travel and tourism has suffered badly in Spain during 2008 as unemployment increased steeply. Spain has long been a very popular tourist destination but one of the reasons why luggage sales were relatively small has been the lack of a significant outbound tourist market. Spaniards have traditionally taken their holidays at home in the form of short breaks. This has been encouraged by the development of the rail network and has implications for the mix of luggage products in demand. As a result of the economic situation the expected increase in more fashionable luggage sets has not materialised. There has been an increase in more casual travel bags and backpacks instead.
Trends in Consumption in Leather goods
Spanish consumers both men and women are particularly fashion conscious. This group of products has been driving this market sector forward in the last few years. The key development has been the changing fashions. Previously the classic leather handbag had been popular for generations of Spanish women. Now there is a greater variety of styles and materials to choose from as well as different price points.
Younger women have been buying less expensive but more innovative styles but increasingly older Spanish women have shown an interest in the latest fashions in handbags and belts. Brands becoming more popular. Unlike some other countries Spanish consumers are taking to branded goods in this time of economic difficulty. A study by market research specialist Nielsen has found that Spanish consumers look to traditional values and the heritage of a brand as a form of reassurance in difficult economic times. They want to be sure of what they are buying.
The other important aspect of choosing a brand is convenience. Well known brands tend to be more widely distributed and easily available. However it is the cheaper brands that have benefited most from this trend.
Spanish consumers have been relatively slow to take to the Internet but now the Internet is increasingly being used as a source of information and communication about products in this sector as well as a purchase medium.
The other important change to how people shop is the growing use of the Internet. Over 70% of Spanish households now have access to the Internet and usage is growing at one of the fastest rates in the EU.
Production
Spanish production of luggage and leather goods was valued at € 434 million in 2008. This
represented 8.9% of the value of all EU production down from a share of 10% in 2004. As
the Table shows Spanish production has increased by an annual average of 1.4% but
production volume has declined. This is explained by some improvements in competitiveness
and a focus on higher quality exports. Italy and France dominate EU production but Spain was the third largest producer.
Table 15: Production of luggage and leather goods in Spain 2004 - 2008 € million / ‘000 tones
According to the Association of Leather Goods Manufacturers 78% of all production in 2008 was accounted for by medium-high quality goods. 21% of production was classified as luxury leather goods while just 1% was classified as low quality.
In 2008 half of all production valued at € 215 million consisted of handbags (47% in 2004). 25% of production valued at € 107 million was small leather goods such as wallets and purses (26% in 2004). 16% of production valued at € 70 million was belts (14% in 2004) while 9% valued at € 42 million was cases and other types of travel bags (13% in 2004).
Trade channels for market entry
Trade channels
Interesting importers and wholesalers in Spain include:
• Benzi - - located in Santa Cruz de Benzana is an importer/wholesaler that deals with sports bags handbags travel bags and accessories.
• Bolma - - located in Fuenlabrada is an importer and exporter of handbags. It has a wide product range.
• Marroquineria Pinero - - located near Cadiz deals with
leather accessories such as purses cases for glasses or document folders. Its products are
hand made by highly skilled craftsmen.
• Regalos Alcazar - - imports gift items and publicity
materials including bags and travel goods.
• Funrey - - located in Seville is a wholesaler of leather handbags
cases and belts. It supplies high quality and fashion items and was established in 1968.
• Goya - - located in Trapani is an important importer and wholesaler
of leather and synthetic bags and handbags.
Table 16: Retail distribution of luggage and leather goods in Spain 2008 % value
The leading retailer for the sector is the department store chain El Corte Ingles - - which has 68 outlets around the country. This group is the principle non-food retailer in Spain and is the dominant player in many sectors.
Clothing retailers now sell many leather goods such as handbags belts and purses.
The dominant chains in Spain are the locally owned Inditex group - - which includes Zara (514 outlets) Bershka (262 outlets) and Stradivarius (265 outlets) amongst others and the Cortefiel Group - - which has 785 outlets.
Finding a suitable trading partner
• A good website to find producers and suppliers is
• The Spanish Fashion portal - - has links to companies as well as information on trends. A similar portal is
• Spanish contacts can also be found at trade magazines for the leather goods industry.
• The International Trade Centre - - and the Spanish Chambers of Commerce - or - are also useful organisations to find Spanish contacts.
• Moddo - - is the leading electronic site for companies involved in footwear and accessories. Other links to operators in this sector can be found at and via
• A fashion blog for the leather goods sector can be accessed at
• The organisation that promotes investment in Spain - - and
the Spanish Institute for Foreign Trade - or - are good information sources for doing business in Spain.
Imports
In 2008 Spain imported luggage and leather goods valued at € 779 million or 109 thousand tonnes. This accounted for 8.3% of all EU imports by value or 11.2% by volume. This represented an average annual increase in value of 10.6% since 2004 from € 520 million (4.3% in volume from 92 thousand tonnes). Spain was the fifth largest importer of luggage and leather goods by value and fifth largest by volume behind the UK Italy Germany and France. France had similar levels of volume imports. (Note imports of ‘made of leather’ items in this group were valued at € 190 million or 6.4 thousand tonnes. These imports grew by 17% in value from € 101 million and 15% in volume from 3.7 thousand tonnes over the period
between 2004 and 2008).
Imports by product group
Bags
This was the largest luggage and leather goods product group. Valued at € 512 million in 2008 this represented 66% of all luggage and leather goods imports to Spain (58% by volume). This compared with a share of 66% in 2004 (57% by volume). Hence this product group was broadly unchanged in significance in its contribution to imports. (Note imports of ‘made of leather’ items in this group were valued at € 100 million or 3 thousand tonnes. These imports grew by 18% in value from € 51 million and by 19% in volume from 1.5 thousand tonnes over the period).
Handbags was the largest sub-sector valued at € 350 million or 40 thousand tonnes in 2008 an Increasing share since 2004 (‘made of leather’ handbags valued € 96 million or 2.9 thousand tonnes).
Cases
This was the next largest luggage and leather goods product group. Valued at € 144 million in
2008 this represented 18% of all luggage and leather goods imports to Spain (34% by
volume). This compared with a share of 20% in 2004 (36% by volume). Hence this product
group was decreasing in significance in its contribution to imports. (Note imports of ‘made of leather’ items in this group were valued at € 15 million or 0.6 thousand tonnes. These imports increased by 8.1% in value from € 9 million and were unchanged in volume over the period). Intra-EU trade accounted for 41% by value and 14% by volume and this has decreased from 40% by value and from 21% by volume in 2004.
Table 17: Spanish imports of bags 2004 - 2008 share in % of value
Source: Euro Stat
Developing country suppliers represented 58% of all imports by value (84% by volume) up from 53% in 2004 (76% by volume). See Table 3 in Annex 1 for more detail. (Note share of ‘made of leather’ imports from developing countries decreased from 33% or € 2.9 million to 23% or € 3.5 million by value and from 56% or 0.4 thousand tonnes to 34% or 0.4 thousand tonnes by volume). Suitcases was the largest sub-sector valued at € 114 million or 31 thousand tonnes in 2008 a marginally decreasing share since 2004 (‘made of leather’ suitcases valued € 9 million or 0.3 thousand tonnes).
Table 18: Spanish imports of small accessories 2004 - 2008 share in % of value
Developing country suppliers represented 52% of all imports by value (78% by volume) up from 51% in 2004 (down from 86% by volume). (Note share of ‘made of leather’ imports from developing countries increased from 40% or € 16 million to 47% or € 35 million by value but decreased from 69% or 1.1 thousand tonnes to 68% or 1.6 thousand tonnes by volume). China (€ 41 million or 6 thousand tonnes) and India (€ 15 million or 0.6 thousand tonnes) dominated the developing country supply of small accessories.
Trade magazines
Advertising or publicity in trade magazines can be a useful way to reach new customers. The main publications in Spain are:
• Marroquineria Espanola - or - is published four times a year targeting major
retailers and wholesalers.
• Modapiel - - targets wholesalers and retailers of footwear and leather goods from a design fashion and market perspective. This publication is also part of Prensa Tecnica.
• Lederpiel - - is a technical journal for manufacturers of leather
goods published monthly by Mundipress. It also publishes other guidebooks for the sector.
• Prensapiel Marroquineria and Punto Moda are published in Barcelona by Edicions Sibil-La -
You can view their titles at
Statistics and Summary about Spanish Luggage and Bag industry
Table 19: Spanish imports and leading suppliers of cases 2004-2008 € million / ‘000 tones
SWOT Analysis of Indian and Spanish leather Industry
Table 20: SWOT of Indian and Spanish Leather Industry.
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
COMPETITORS´ANALYSIS
China
China has made unimagined advancement in the leather industry. It has in-land spread in different countries ranging from Paris to New York and from Tokyo to London. It has a large spectrum of shoe manufacturing capabilities and a sizable proportion of its leather goods lining high street products.
China and exports 36% of its leather goods.
China has a strong control over the supply chain for shoe and bag distribution in Spain from Point-to-Point with a distribution base in Elche and another in Fuenlabrada Madrid. Chinese leather businesses not only import directly from their own factories in China but in many instances have also set up local manufacturing in the former Spanish leather production regions as they have done in Italy and many other Western European nations in many sectors.
Chinese businesses in Spain import distribute manufacture wholesale retail leather products thereby competing effectively from point of origin to point of sale. Additionally in most instances the Chinese also are a part of the real-estate sector whereby the retail store is bought re-designed renovated stocked owned and operated by the Chinese community members. This control allows the Chinese to have the best control of the pricing and sales strategy.
in 2009 China’s leather industry export value reached more than USD 56 billion leading the world market just ahead of Italy and Vietnam. Like other successful industries in China such as textiles and toys the leather industry is labor intensive. As such the availability of a relatively cheap workforce and an integrated supply chain has given it a competitive edge and also a comparative advantage.
Vital Statistics for China
Figure 9: China´s export to Spain
Morocco
Morocco’s leather industry is a big revenue earner commodity for the country thereby earning large foreign exchange for the nation. Moroccan leather industry has a centuries old tradition especially in tanning and curing leather. Among the most important types of Moroccan leather Goat skin is the main type. Another important kind of hide in Morocco is the vegetable tanned leather. Its specialty is the characteristic pinhead grain pattern which develops either through natural processes or by boarding or graining the surface.
The major production comes from the Moroccan cities such as Fez Meknes Marrakech Rabat Tetouan and Tangier. In some of the cities like Fez and Marrakech we can still find entire neighborhoods with colorful tanks where many tanners can be seen traditionally curing the hides.
Morrocco is an important center of production for many European brands including Spanish ones. There are many advantages to producing leather goods in Morocco. It’s traditional leather industry knowledge close proximity to Europe low cost labor and production time including the ability to communicate in French Spanish English and Arabic make it an easy production center for the Europeans to work. Additionally the prevalence of favorable trade agreements between the European Union and Morocco make it very advantageous to produce.
In the case of leather bags leather apparel and footwear production there can be as low as a 15 day turnaround time from placing the order to receiving the merchandise in the client’s warehouse. This quick turnaround time makes it very favorable for the Spanish manufacturers to order their outsourced production in Morocco especially for those who have clients such as Zara El Corte Inglés Cortefiel who can order repeat production on high-selling items.
Vital Statistics for Morocco
Articles of leather animal gut harness travel goods
Figure 10: Morocco´s exports to Spain under Articles of leather animal gut harness travel goods
Portugal
In Portugal there are traditional chains of leather and footwear industries. These industries include animal breeding tannery and leather finishing (raw material) footwear and leather items manufacturing units. In the leather – footwear industry there are 2000 enterprises:
Leather (tannery leather processing) 120
Footwear Manufacturing units and Industries 1450
Leather items construction 135
Footwear auxiliary material production 295
Figure 11: Enterprises in the Portuguese footwear industry
Market description: consumption and production
Consumption
The Portuguese market for luggage and leather goods was valued at € 208 million in 2008 in terms of retail sales unchanged since 2007. This represented an average annual increase of just 0.6% since 2004 one of the lowest in the EU and well below the EU average increase of 3.4%. This poor performance was due to low growth rates in the economy as a whole. Portugal was the ninth largest EU market similar in size to Austria and now also quite close to the market values of Sweden and Greece. See EU survey for ranking of all EU Member States by value.
Table 21. Consumption of luggage and leather goods in Portugal 2004 - 2008 € million
Source: Euro Stat
Despite the economic slowdown there still remain a proportion of Portuguese consumers that continues to purchase high quality branded handbags belts and other accessories. There has been a reduction in the frequency of purchase but nevertheless these consumers have not traded down. The other healthy segment is for men’s accessories as younger men have become much more fashion conscious. The broader growth in interest in fashion has come the increasing number of retailers that have made fashionable accessories more affordable. Fashions change quickly and quite radically in Portugal but recently not all consumers have been able to afford to keep up with the changes. Demand for formal handbags still exists but younger Portuguese women are increasingly choosing more casual styles.
Consumption by product group
A detailed breakdown of consumption was not available although based on import export and production data the apparent Portuguese consumption was divided accordingly: bags of all types (54%); all cases (24%) and small leather goods including belts (22%).
Market outlook
The growth enjoyed in this market in 2007 was short-lived. This continued into the middle of 2008 but the market has contracted since then. The market contracted strongly during 2009 and this contraction will continue into 2010. The Portuguese economy continues to be weak with low levels of consumer confidence. It is hoped that with the global economy improving the Portuguese will start spending on consumer goods again at higher levels from 2011 onwards. This forecast is currently uncertain.
Production
Portugal is a small-medium sized producer of luggage and leather goods in the context of total EU production. Portugal represented less than 0.5% of all EU production in 2008. Production value was € 23 million an average annual decrease of 0.3% since 2004. Values and volumes have been broadly maintained throughout the period suggesting that the industry continues to produce average quality products despite attempts to increase exports.
Table 22. Production of luggage and leather goods in Portugal 2004 - 2008 € million / ‘000 tonnes
Source: Euro Stat
There were 5% fewer companies in this sector in 2007 compared with 2005. The Portuguese leather goods industry has struggled to maintain international competitiveness both in its exports and in its domestic market as low cost imports have attracted Portuguese consumers. Portugal is traditionally skilled in working with leather products but despite modernisation and restructuring has lacked new design and innovation.
34% of production was for suitcases other cases and containers a decreasing share since 2004. 28% of production was for belts an increasing share since 2004 followed by 26% for handbags. The remaining 12% was small leather goods such as wallets and purses.
Some interesting manufacturers in Portugal include:
• Decorpele - http://www.decorpele.com - located in Alcanena is a manufacturer of small leather goods such as belts and purses.
• Leirialgarve - http://www.leirialgarve.com - located in Faro is a manufacturer of leather products. This company offers leather handbags and purses and has nine shops.
• Ferratti - http://www.ferratti.eu - located in Joao de Madeira designs and produces fashionable leather handbags for women. It also manufactures belts and wallets.
Vital Statistics for Portugal
Articles of leather animal gut harness travel goods
Figure 12: Portugal´s exports to Spain under Articles of leather animal gut harness travel goods
Research Findings for Spain Leather Market
RETAIL STRATEGY IN TOUGH ECONOMIC TIMES:
Given the current economic scenario in 2011 retailers have shrunk their margins in order to be able to sell. They are seeking cheaper pricing options so they can have sales. The all-leather collections are being reduced and being supplemented by other materials such as silks faux leather to keep the retails margins. The large department stores are ordering few quantities and few patterns so as to keep a low inventory. At all levels the pricing multiplier is now 1 or 1.5 x prior to the 2.5x or more in boom years.
FEWER INVENTORY TURNS:
Earlier the large retail chains offered greater inventory turnover with Zara offering as many as 3 times a week. In today’s downturn the retailers are seeking the best options to minimize losses and thereby have fewer inventory turns. The boutiques are no longer creating extensive product lines and are now offering fewer products to avoid stocks of unsold merchandise. This is affecting all levels of merchandise: leather apparel shoes bags belts luggage and other leather accessories.
Table 23. Average prices of various types of footwear euro different retailers 2009
Table 24. Development in Spanish average import values/prices 2004-2008 euro
Source Euro Stat.
PRODUCTION STRATEGY
At the high end level leather manufacturing still continues to be in-house. Large brands like Zara and El Corte Inglés’ and Cortefiel’s top brands prefer to have their high-end leather product manufacturing in or near Spain. The reason being the short-turnaround cycles for fashion-forward items that do well in the retail market and need to be replenished quickly. In many instances the local manufacturers although considerably more expensive than the manufacturing in India or China are able to work with short timelines of 30 days for instance whether they produce in their own workshops or in Morroco. These tend to be shorter production runs but with higher cost per item.
Another additional feature that must be noted is that the design team at the client site has complete comfort in having the producer in the same area with easy accessibility. This gives them the confidence to create immediate prototypes that can be produced quickly by the producers.
CONCLUSION
For Indian manufacturers to get greater inroads in sales in Spain it must be noted that a local presence is irreplaceable. The closer the access to the client the better the sales realationship resulting in greater sales.
A strong design team that understands global and local Spanish fashion trends cannot be emphasized enough.
The ability to translate prototypes into working models with innovations suggestions is highly appreciated by the Spanish clients.
The Spanish buyers prefer to have long term loyal relationships with their buyers for which meeting frequently is a necessity.
Speaking the Spanish language without a doubt creates a deep lasting relationship and makes way for easy communication.
Emphasizing that Indian brand means quality would be priceless.
Appendix
In Spain-On the 17th of February 2011 a new Business Park was inaugurated in locality of Fuenlabrada after 4 years of work and more than an investment of Euros 43 million. The Plaza Oriente Business Park houses over 80 businesses and employs over 1000 people directly or indirectly.
The Plaze Oriente in Fuenlabrada Madrid and the business locality of Carrús of Elche Alicante both form the principal distribution nucleus of shoes bags and textiles from China.
It is believed that around 80% of the low cost shoes from China that come into Spain are distributed from one of these two industrial parks named above.
Spanish Market access requirements
As a manufacturer in a developing country preparing to access Spain you should be aware of
the market access requirements of your trading partners and the Spanish government.
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 that your trading partners in the EU might request.
Labelling
Main aspects to the labelling of leather garments besides basic information like brand name and sizing are:
• Legislation in Spain refers especially to products made of tanned leather (with or without hair) consisting for more than 20% of the surface or total weight of the article including all kinds of garments except gloves accessories made of leather and footwear. Authorized
designations are piel (skin hide); cuero (leather); curtido (tanned) and piel curtida para peletria (tanned fur). Parts of the animal (tail neck paws loins etc.) have also to be
mentioned except for suede fur lambskin and double face articles.
• Labelling has to be formulated in the Spanish language.
• Imitation leather: the name of the animal which is imitated can only be used if this name is
followed by the words ‘imitation’.
• Mandatory for products made in an EU country: manufacturer or seller’s name or trade
name and address and for products made in a non-EU country: importer’s trade name.
• The label shall be attached to the inside or lining of the garment
• Optional labelling includes care labelling i.e. the inclusion of cleaning instructions is not
mandatory in Spain. However it is strongly encouraged. It is recommended to use Ginetex
symbols the system used throughout Europe (see: ). Leather
garment care can give information like storage drying cleaning advice to prevent
damage.
• Country of origin labelling is generally speaking not compulsory. However it is necessary
to have an origin label if without such a label the consumer would be misled as to the true
origin of the garment.
Packaging
Leather garments are usually individually placed in ventilated bags and then packed in a
cardboard box containing several items. The box is wrapped in a plastic foil and put into a
waterproof textile bag. The use of anti-fungus chemicals on the finished product is
recommended. Additional information on packaging can be found at the website of ITC on
export packaging:
Tariffs and quota
Information on import tariffs and quota can be found at
Trade association
The trade association in Spain Fedecon can be reached at
Trade fairs
Important trade fairs in Spain are:
• Barcelona Fashion Week for men’s and women’s wear ()
• SIMM in Madrid covering women’s fashion (Imagenmoda) ready-to-wear (Intermoda)
jeans and street wear and sportswear ()
• Fimi Valencia for children’s fashion ()
References
1.
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6.
7.
8.
9.
10. http://www.intracen.org/trade-support/Stat_import_product_country/
11.
12.
13.
14. http://www.fashionfromspain.com
15. http://www.pinkermoda.com;
16.
17.
18.
19.
20.
21.
22. National Statistical Service of Greece (General Secretariat)
24. European Statistical Service (EUROSTAT)
25. .
26.
Business Intelligence Report of Leather Industry Page
by
rahul4u (student)
