The handbag market - Germany

1.1 Introduction

The handbag market encompasses many different types of products segmented into broad price ranges that cater to the needs of the masses. The most popular handbag models can be sold for astronomical amounts of money. The current world record handbag was sold for nearly $4 million. Yet, this product did find a buyer.

This shows us that the usual market segmentation into price ranges is not inalienable. Demand management is necessary to face the toughest competition.

However, for a first approach it is wise to understand the handbag market in the form of different price ranges. Among these we find in particular :

• Luxury handbags (more elaborate and sometimes in limited edition)

• Mid-range handbags (available in large ready-to-wear stores)

• Entry-level handbags (low demand in some markets)

The global handbag market is growing at an annual CAGR of over 5%. The best growing segments are luxury or high-end products with a good price-quality ratio. To gain market share, luxury multinationals are now turning more to Asian countries. Indeed, the demand for these types of products is particularly developed there. This is mainly due to the emergence of a new middle class who are showing conspicuous consumption to develop a sense of belonging to the wealthy class.

In Germany, the handbag market is one of those sectors that are evolving the most. This is mainly due to societal changes (increased purchasing power, structural changes in the labor market). However, inflation is at its highest in Germany, which has had a heavy impact on the handbag market. Paradoxically, high-end bags remain popular with customers because they are more durable.

International luxury brands of the LVMH Group are present in the German market. However, other brands such as MCM (German brand specialized in the production of high-end bags) are also very popular.

For cultural reasons, the handbag market in Germany cannot be directly compared to other Western European countries. Germans place great importance on the practicality of the products they consume. The challenge for a company wishing to join this market is to find a way to offer products with an interesting price-quality ratio and a beautiful aesthetic appearance.