May 2015 W www.insidefashionLive.com34

The leaTheR gOODs market is not very optimistic. Manufacturers and brands report that the business has been decreas-ing during the last two years.

“business is okay, but nowadays the margin is very thin. it is very difficult for us to deal with the price pressure. it costs a lot of extra money to do all the compliance work, but buyers are not willing to pay for this,” said Jashim Uddin, managing director at lalmai Footwear ltd. (bangladesh), speaking with Inside Fashion during Fashion access (hong Kong, March 30-april 1).

“The market is not as good as before.

The economy is down, but costs keep rising. We see decreases in every major market,” added Masayasu Kawai, manager of sales Div. at akio shoes co., ltd. (Japan). “The only market that witnessed increases last year was Myanmar.”

The company manufactures in asakusa, Japan and the weak Japanese Yen has also hurt them. The cost of importing raw materials went up, but buyers are asking for a lower price because of the weak yen, so ultimately our export price went down, Mr. Kawai explains. “in the end, we have more customers, better sales figure, but the profit margin decreases,” he said.

the Search for new MarketsWith the traditional markets still in a

slump, companies are looking to diversify now more than ever before. not surpris-ingly, all eyes are on china.

“in the future, bangladesh may export to china. chinese company can produce in bangladesh in a cheaper rate,” said Mr. Uddin.

“The weak euro is big problem right now. We’re trying now to sell to china. We haven’t

been able to sell our finished products, but they are willing to buy leather from our tan-nery because our price is competitive,” said adeel ashraf, director at Muhammad ashraf & sons. The company is a fully integrated leather goods manufacturer based in Pakistan.

“new markets like australia, new Zea-land, and south africa are growing very quickly. We always try to diversify our market. currently, we are selling to more than 10 countries. in the coming year, we

will put our efforts on developing new markets,” said Valentina cruciani, sales ex-ecutive at lsR international ltd.

“at the moment, the e.U. market is still our main market, however compared with the [potential] market in china the eU will be a small potato,” said Raaj Kumar, managing director, at ace exports. The company is manufacturing middle priced leather garments for european brands such as Zero and bogner.

the High End Market is Still Booming“The low end market might have

tanked, but from what we see, the high

end market is still increasing quickly. There is still demand for high quality leather bags,” said Ding guorong, President at guangzhou Dipi leather goods co, ltd. (china). The company started as an ex-porter in 1992, then shifted to produce its own leather products. now the company is selling expensive leather handbags in the china domestic market at the prices from ¥5000–¥3000 RMb (Us$ 807- $4840).

Dipi is not the only one that is seeing the opportunity in the high-end market. “People should look at the long-term pic-ture. it is very easy to let short-term cir-cumstances cloud your judgment. in the next few years the high-end market will increase a lot, especially in asia,” Valentina amidei, sales manager at silvano biagini told Inside Fashion. The italy-based com-pany makes luxury python handbags and sells them in europe and asia.

I trade Fair Forum: FaSHIoN aCCeSS I

Leather goods Look for New strategies as Competition intensifies

“It costs a lot of extra money to do all the compliance work, but buyers are not willing to pay for this.”

— Jashim Uddin, managing director at Lalmai Footwear Ltd.

“Right now, our biggest

challenge is how to reinvent

our image – to appeal to a

younger customer group.” — masayasu Kawai,

Sales Manager at Akio Shoes

Masayasu Kawai from Akio shoes co., Ltd

Luca santoni (left) and Valentina cruciani (right) from Lsr

Jashim uddin, managing director at Lalmai Footwear Ltd

Valentina Amidei from silvano Biagini

raaj Kumar from Ace exports

Ashish Vijh, managing director at Maliks export

35 www.insidefashionLive.com W May 2015

“i think it is time to re-launch our iconic stephane Kélian brand. Fashion al-ways goes in cycles; so we think it is time to bring our signature molded platform heel design back to the market – especially now that the asian market is starting to grow,” said carole Debris, sales director at ste-phane Kélian (France).

new Age, new Challenges“Producing in italy is not as easy as be-

fore,” said luca santini. “We can bring our technique know-how and produce in china.” lsR international ltd. is a family-owned middle to high-end leather shoes

manufacturer from italy. after four genera-tions of manufacturing in italy, in 2008, the family made a strategic decision to move their company to guangzhou, china.

“The biggest challenge is to communi-cate with local suppliers and teach them to follow the italian standard. sometimes, this can be a huge headache. luckily, we’ve

been in china for some years now. The new generation management has learned to speak Mandarin, so we can communi-cate with our workers and local suppliers,” added Valentina cruciani, sales executive at lsR international ltd.

The company positions itself as “entry level high-quality shoes”. it’s own brand, Massimo santini, sells leathers boots that retail from Us$50.

“People say that wage increases are a big problem, but actually real challenge is the lack of talent. There are very few people who know how to market and sell high-end products. sometimes it can be very

frustrating. almost every company is looking for tal-ents to fill its management positions,” said Ding guo-rong at Dipi leather goods.

in addition to looking for better sales staff, Dipi is trying new marketing strat-egies. “We put our bags in department stores, sell in our own stores and also on-line. interestingly, we find that when we put our bags in clubhouses they sell really

well,” he added.“Right now, our biggest challenge is

how to reinvent our image – to appeal to a younger customer group. in high-end footwear market, we face fierce competi-tion from italian companies. We want to cater to a younger customer group that also thinks comfort and quality is important.

We have techniques that other manufac-turers don’t have. We are in the first tier in terms of quality. now we need find a way to make customers relate to us,” said Masayasu Kawai at akio shoes.

pakistan finds new AdvantagesWhile most manufacturers are struggling

to maintain their customer base, Pakistani mills are enjoying a strategic advantage of low cost labor, a local supply of raw materials and preferential government policies.

“Pakistan is still the cheapest place for leather goods production. We use raw ma-terials from local suppliers as well as im-porting leather from iran. The labor cost in Pakistan has increased a quite a bit, but that isn’t a big problem for us. We pay our worker on piecework basis. On aver-age, a worker earns Us$5 per piece,” said Waseem ashraf cheema, sales manager at Firhaj Footwear (PVT) ltd. The company makes leather jackets for international brands including Mango and inditex. “We are mainly doing volume business with big european players now, but in the future we want to target more high-end brands and enter U.s. market,” he added.

“skins prices are going down,” said ad-eel ashraf, director at Muhammad ashraf & sons, who uses local raw materials, as well as importing from the Middle east. “We also enjoy a 4 percent government tax rebate on exports of leather garments, and 1.5 percent on leather footwear and 2.5 percent on leather bags.”

Just like in the garment industry, manu-facturing continues to shift to the lowest cost producers. however cost advantages can be short lived, especially in a market that is now demanding better quality and more innovation.

Leather goods Look for New strategies as Competition intensifies

“from what we see, the

high end market is still

increasing quickly. there

is still demand for high

quality leather bags.” — Ding guorong,

President at Guangzhou Dipi Leather Goods Co, Ltd. (China)

ding Guorong, President at Guangzhou dipi Leather Goods co, Ltd

Waseem Ashraf cheema, sales Manager at Firhaj Footwear (PVt) Ltd

s. Mahamudul haque, sales Manager at Banbiz (PVt) Limited

Ashish Vijh, managing director at Maliks export

Maurizio Bacchi from Michelle (hK) industrial Ltd

Priyam Asthana from Klodennex

Jala Ahmed, managing director at Peacock crafts Ltd

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