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Summary of our market study
The global handbag market is on a growth trajectory, expected to expand from a valuation of US$ 49.1 billion in 2021 to US$ 81.6 billion by 2030, progressing at a CAGR of 5.8%. Despite a significant setback due to the COVID-19 pandemic, causing a 38.2% decline in U.S. market sales, recovery efforts are underway with digitalization, eco-responsibility, and the burgeoning second-hand market as key drivers. The luxury segment, particularly, is flourishing, projected to hit US$ 35.4 billion by 2031. The U.S. remains a net importer of handbags, with imports dominated by Italy (26.0%) and a notable domestic shift towards vertical integration in the value chain. Online sales, while currently accounting for 23.51% of total U.S. fashion item sales in 2021, are expected to see a slight decrease by 2025 to 22.23%. Social media platforms such as Instagram are propelling e-commerce, influencing purchasing behaviors especially among the younger generations. Regulations mandate compliance with labeling, certification, and safety standards, with California's Proposition 65 setting stringent warnings for chemical exposures.
Diverse Demand Dynamics in the Contemporary Handbag Market
In recent years, the handbag market has seen a vibrant ebb and flow caused by various factors. The investment value of luxury bags has been a significant driver, with secondary markets witnessing an impressive 430% increase in demand for Hermès bags as an example. Despite handbags being recognised traditionally as women's accessories, notable growth in demand among men's handbags signifies a shift towards functionality and style in male consumer preferences. This diversification isn't limited to demographics, as the demand spans across age groups from teenagers to retirees. The US market, in particular, has faced its set of challenges, with sales experiencing a sharp decline after the 2008-2009 financial crisis and again in 2020 due to the pandemic, indicating the market's sensitivity to broader economic conditions. Despite this, the industry is on an upswing, with sales figures attempting to surpass pre-crisis levels.
Foreign trade in handbags reveals the United States as a net importer, with European countries like Italy and France leading the export pack due to the luxury segment's high price points rather than sheer volume. Importantly, the second-hand market has burgeoned in the United States, growing at a remarkable 32% in 2021 and propelling forward to an estimated value of between $80 and $85 billion by 2026. Driving this growth is a combination of consumer motivations—financial savings, access to premium brands, and unique finds. The affinity for designer handbags in the United States is evident through internet searches, with luxury brands like Chanel, Coach, and Gucci being top-searched terms alongside the word "handbag." This indicates a strong interest in both luxury and mid-range priced bags that balance affordability with aspirational brand identities. The second-hand and resale markets are revolutionizing the way we engage with luxury goods, especially handbags. Gen Z, in particular, shows a pronounced inclination towards sustainable and thrifty choices, fueling the growth of platforms like ThredUp and Vestiaire Collective. This shift leans towards a more cyclic economic model, embracing rental and resale over ownership—a significant nod to sustainability. Inextricably linked to these trends are intricate market forces such as vertical integration of supply chains among.
Key Market Players Shaping the Global Handbag Industry
The global handbag market is characterized by a diverse mix of companies that range from iconic luxury brands to fast-fashion retailers, each playing a significant role in the industry's dynamic. Let's delve into the various major players that have been mentioned and their distinctive place in this vibrant marketplace.
- Luxury Titans Lead the Pack Internationally renowned for their craftsmanship and prestige, companies like Hermès, Louis Vuitton, and Gucci are synonymous with luxury. Hermès stands out with its Birkin bag, often considered the pinnacle of luxury handbags, while Louis Vuitton’s Speedy 25 remains an evergreen favorite among luxury enthusiasts. Gucci, not far behind, has successfully penetrated the digital realm, offering products such as NFTs and making historic sales in the metaverse that eclipse real-world values.
- Tapestry (US) Boasting esteemed brands such as Coach, Tapestry is a prominent American multinational luxury fashion holding company. Known for its commitment to quality and design, Coach has become a beloved brand that resonates with a broad audience, offering a fusion of luxury with accessible fashion.
- Tory Burch (US) Tory Burch, another American brand celebrity, has carved out a reputation for its preppy-boho style that appeals to a wide demographic. They manage to blend elegance with practicality in their handbag collections, bringing a touch of understated luxury to everyday life.
- High-End Market and its Contenders In the high-end segment, Michael Kors and Rebecca Minkoff stand out. Michael Kors, in particular, is known for its sleek and accessible luxury accessories, including a wide range of handbags that blend attainability with a luxury feel.
- Mid-Range and Entry-Level Brands Dooney & Bourke and Vera Bradley represent the mid-range market, offering quality handbags with distinctive designs at more affordable price points. These brands find favor with consumers who seek both style and value. In juxtaposition, brands like H&M and Shein dominate the entry-level market with their trend-driven and highly affordable handbags. These labels cater to fashion-conscious consumers who prioritize variety and value for money.
- Pioneering Second-Hand and Digital Arena ThredUp and Vestaire Collective are two platforms that reflect the shifting consumer attitudes towards sustainability and second-hand fashion. These platforms enable fashion enthusiasts to engage in circular fashion, reselling and purchasing luxury bags, among other items.
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Summary and extracts
1 Market overview
1.1 Definition and scope of the study
A handbag is a fashion accessory that has a functional purpose (to store keys, a phone...) but is obviously also used to reveal one's personality and clothing style. If the handbag is mainly intended for women, more and more mixed models appear as the tote bag or the crossbag.
Handbags are characterized by :
- Their range and brand: luxury, high-end, mid-range, entry-level
- Their shape and size: tote bag, clutch, shoulder bag, bucket bag, etc.
- Material: leather, synthetic, textile, recycled material, etc.
The global handbag market is expected to grow at a steady pace, with an average annual growth rate of 5.8% until 2030.
In addition, new growth drivers are emerging, in particular the digitalization of the sector, the development of the second-hand market, as well as the growing attention of consumers to the eco-responsibility of the products they buy.
While the Covid-19 epidemic led to a drop in sales during containment, structural growth in the market appears solid. Major U.S. specialty players in the market include Coach, Michael Kors and Kate Spade. in addition to these, there are foreign specialist players, particularly European ones such as Louis Vuitton, Hermès and Gucci, not forgetting the ready-to-wear, accessories and shoe brands that often also offer handbags.
All these players are often manufacturers who distribute their products directly. However, handbags are also distributed in department stores, such as Bloomingdale's, supermarkets and hypermarkets, as well as on the Internet by pure players, such as Asos.
1.2 The global market
Global Handbag Market Size World, ****-****, US$ billion TCAM ****-****: +*.* Source: ****
The global handbag market is valued at US$ **.* billion in ****. It is expected to grow steadily to reach US$**.* billion in ****, representing a CAGR of *.*% over the period.
Looking at the growth segments of the handbags market, we can see that :
in terms of product segment, the tote bag dominates the market in terms of volume and luxury bags in terms of value in terms of distribution channel, physical distribution will dominate the market in **** with **.*% of total sales, but online distribution is expected to be the most important segment contributing to market growth in terms of geography,North America will dominate the market in ****, generating **.*% of total revenue, butAsia-Pacific is expected to be the fastest growing region
The luxury handbag market is growing
This trend is indicative of the strong performance of luxury personal effects especially in the United States: which is the leading country in terms of revenue.
According to a recent report by PR Newswire, the global market is expected to reach US$**.* billion by ****.
Market Drivers:
the investment value of the luxury bag: a sign of this interest, over the first quarter of ****, the demand for ...
1.3 The U.S. market is trying to recover from the crisis
US handbag sales by value in billion US$, United States, ****-**** Source: ****
US handbag sales in volume in billion units sold, United States, ****-**** Source: Travel Goods Association Handbag market sales have been particularly sensitive to the various crises. Indeed, after the ****-**** crisis, sales fell by **.*% in value between **** and **** and by **.*% in volume.
After an increase in value that allowed the sector to recover and even exceed its pre-crisis level to reach US$ **,*** million in ****, the Covid-** crisis has affected the market which is experiencing a decline of **.*% between **** and ****.
1.4 Foreign trade in handbags
Trade Balance united States, ****-****, in billions of US$ and in % Source: UN Comtrade With the use of the following codes: ******, Cases and containers; handbags (***), with outer surface of leather or of composition leather ******, Cases and containers; handbags (***), with outer surface of sheeting of plastics or of textile materials ******, Cases and containers; handbags (***), of vulcanised fibre or of paperboard, or wholly or mainly covered with such materials or with paper
As the chart above shows, the United States is a net importer of handbags,
Top Handbag Supplying Countries united States, ****, as % of total export value Source: UN Comtrade The top * supplier countries account for **.*% of total US imports: Italy remains the main supplier with **.*% of total imports, followed by France (***) than to a volume effect from which exports from Asian countries benefit.
Main U.S. customers in the handbag market united States, ****, as % of total exports Source: UN Comtrade The export picture is very different. A single trading partner, Canada, receives **.*% of U.S. handbag exports. The other most important customer countries account for **.*% of exports, including China (***).
2 Analysis of the demand
2.1 Demand and its determinants
Handbag consumers
The majority of handbag consumers are women, and there is a certain correlation between the increase in the proportion of working women and the growth in sales of luxury bags: since they have greater purchasing power, they redirect their income towards luxury purchases, rather than towards lower ranges.[***]
However, there is also a growing demand for men's handbags that meet the criteria of practicality and functionality: useful bags for work to store electronic devices, bags etc. ...
Moreover, handbags are not the prerogative of one age group: they concern teenagers, active women as well as retired women.
A favorable national reputation despite the influence of European leaders
The United States enjoys a positive image both nationally and internationally.
Thus, the survey, illustrated below and conducted on an international scale, highlights people's vision of American handbag manufacturing. France is the third most preferred country for handbag manufacturing, the first being Italy and the second France.
-$$
Favorite handbag brands of American teenagers of respondents ,U.S., Spring **** Source: ****
2.2 Americans are very interested in designer handbags
A strong interest in luxury and affordable handbags
Google Trends analysis - **/**/****
When we look at the top ten topics associated with the term "handbag" in Google searches of the last ** months in the USA, we see that * of them refer to luxury brands or to the terms "brand" and "designer".
The handbag in the USA: leather, black and with the Louis Vuitton brand name on it?
Google Trends analysis - **/**/****
When we look at the queries including the term "handbag" we see that those that come back the most are: leather handbags (***).
2.3 Second hand, a new way of consuming handbags
Second hand market
Second-hand market in the United States uS$ billion, United States, ****-**** Source: ****
Secondhand is becoming increasingly important in the way younger generations consume. The second-hand market grew at a record pace in **** with an increase of **% to reach US$** billion.
The U.S. used clothing market will reach US$** billion by ****, with this growth driven by the resale clothing sector, which is expected to grow ** times faster than the apparel sector.
In general, circular economy models such as rental or resale are increasingly favored by millenials and Generation Z for whom consuming sustainably is increasingly important:**% of consumers, in fact, indicate that they place greater importance on sustainability now than before the COVID-** pandemic(***)
According to the ThredUp study, here are the top * reasons why consumers buy second hand rather than new:
save money: **% of consumers choose second hand to get a good deal To be able to consume higher-end brands To find unique clothes
Among generation Z the reasons given are the following:
to save money To have a more sustainable consumption To have fun while shopping
For example, the United States accounts for a quarter of the sales of "Vestiaire Collective," a second-hand clothing resale platform. ...
3 Market structure
3.1 Forces at work
Vertical integration of the value chain: a new market trend
More and more luxury brands are embarking on vertical integration of their supply chains. Vertical integration is a strategy that allows a company to control its value chain by integrating new activities with its production activity. This can be achieved through the acquisition or creation of suppliers, distributors or retail outlets.
Vertical integration has * advantages:
Cost reduction:by integrating upstream, the supplier is absorbed and so is the margin it was making Supply security: vertical integration allows to control and secure supplies which can help companies with their CSR strategy Strategic positioning:wealth creation is not always located at the same level of the value chain; vertical integration allows greater flexibility and resilience when such movements occur
3.2 Handbag production in the United States
Number of employees in the US apparel manufacturing industry in thousands, ****-****, United States Source: ****
Handbag manufacturing, like apparel manufacturing, has fewer and fewer employees and production units.
Number of firms manufacturing women's handbags by number of employees Number of firms, U.S., **** Source: ****
The majority of handbag firms have fewer than * employees: they are mostly entrepreneurs.
change in producer prices for handbags PPI, January ****-January ****, United States Source: ****
The producer price index measures the average change over time in the prices that domestic producers receive for their output. Note that producer prices have been increasing since **** with an acceleration since ****: this accounts for some wholesale inflation.
Example, the production of COACH or Michael Kors bags
Coach bags are no longer produced in the United States but in Vietnam (***), Cambodia, the Philippines or China.
Michael Kors bags are produced in China, Vietnam, Indonesia and finally Turkey.
Thus, even the iconic handbag manufacturers are relocating their production to countries where the workforce is numerous and low-wage.
3.3 Distribution
The distribution of handbags is managed in * main types of actors:
Own brands that distribute online and physical : luxury brands through their own stores: Louis Vuitton, Gucci... fast fashion brands: H&M, Primark, Zara... handbag specialist brands: Kate Spade, Michael Kors...
Multi-brand distributors: physical and online generalists department stores: Macy's, Nordstrom, Bloomingdale's big box stores: Walmart second hand stores
Pure players who are only on the online channel: high-end sites: Farfetch, Wardrobe sites: Asos, JW Pei: Asos, JW Pei... resale and second-hand sites: ThredUp, Vinted, Vestaire Collective...
3.4 Is the acceleration of online distribution coming to an end?
Online retail market share of apparel, footwear and accessories as % of total sales, United States, ****-**** source: Statista
In ****, online sales of fashion items accounted for **.**% of total sales in the US. The Statista Digital Market Outlook for online sales predicts a decline: in **** the estimated market share is **.**%.
Ranking of fashion sites by amount of e-commerce sales in billions of dollars, United States, **** Source: ****
Social networks, an e-commerce gas pedal
Key statistics on Instagram Shopping in **** according to earthweb.com
*** million users click on a shopping post every day **% of Generation Z consumers use Instagram for shopping **% of millenials buy beauty products on instagram **% use Instagram to search for products
This use of Instagram allows the rise of e-commerce and the development also of many brands that only exist online like JW Pei.
4 Analysis of the offer
4.1 Typology of the handbag offer
The handbag market can be divided into several segments, depending on the range, the model or the material used.
The different product lines are as follows:
Luxury handbags : these are handbags made with quality materials (***) and according to advanced processes. Luxury handbags can be found between ***€ and several thousand euros.for example, the most expensive handbag in the world would be a Birkin bag from the Hermès brand sold for $***,***.[***] High-end handbags: this range of products falls between luxury and mid-range handbags. These bags generally use good quality components but often have a lower brand image than luxury giants like LVMH. The prices of these bags remain generally high (***). Among the high-end brands, we can mention Vanessa Bruno and Guess. Mid-range bags: made of leather or canvas, these bags are well worked and have a more aesthetic design than entry-level bags such as Lacoste, Pepe Jeans, JWPei... Entry-level bags: these bags are often made from lower quality materials (***) and have a simpler and more practical design like those available on Shein
Some of the main models on the market include:
Tote bag: trapezoidal in shape, this bag allows a large storage capacity. Its wide handles allow it to be carried ...
4.2 Handbag prices
As mentioned in the previous section, handbag prices vary depending on many factors such as the brand, the type of product or the material used.
4.3 Trends in handbag supply
More responsible bags
In response to consumers who are increasingly eager to respect ethical values and adopt more responsible and environmentally conscious consumption, bag brands are offering a range of more eco-responsible products:
vegan leather bags: pineapple leather, solvent-free vegan leather, etc. luxury bags that are increasingly moving towards eco-design bags using upcycling: using/recycling materials to create new clothes; like Coach's "(***)Loved" range
The rise of new consumption patterns
The metaverse is deeply transforming consumers' consumption and purchasing habits, but it is also forcing large companies to rethink their business model and their current and future role within this new dimension.
Luxury brands in particular are investing more and more in this segment to increase their notoriety among a new consumer population: generation Z; but also to generate profit. For example, after partnering with Roblox (***) to design the Gucci Garden and produce NFTs, Gucci made a historic sale in the Metaverse universe as the bag in question sold for more than in the real world, at $*,***.
Using the blockchain for authentication
To secure their goods, luxury brands often resort to expensive and randomly effective means such as RFID chips, which are inherently removable.The products generally have three levels of ...
5 Regulation
5.1 Current regulations
Textile, Wool, Fur, Clothing and Leather Issues
Federal law requires that most textile and wool products be labeled with the fiber content, country of origin, and the identity of the manufacturer or other company responsible for marketing or handling the product.
For fur, labels must include the name of the animal, country of origin, information on the treatment of the item (***), a registered identification number and other relevant information. The fur rules also set standards for label size and durability, lettering and the order in which information is presented.
The Federal Trade Commission's guides for selecting leather and leatherette products cover a wide range of items, including luggage, handbags, belts, shoes and other apparel.
Under the Care Labeling Rule, manufacturers and importers must provide instructions so consumers know how to clean the products they purchase.
labeling and certification
Actors must comply with the Fair Packaging and Labeling Act and its labeling requirements if they wish to market apparel and textile products that inform customers of fiber composition and care instructions. These rules also apply to handbags. In general, the label must include importer/manufacturer information, fiber composition, ASTM symbols for textile care instructions, and it must be written in English. In ...
6 Positioning of the actors
6.1 Segmentation of actors
- LVMH Groupe
- Kering
- Target
- Walmart
- H&M Groupe
- Michael Kors
- Shein
- Inditex groupe (Zara)
- Mango
- Louis Vuitton Malletier
- Chanel
- Chloé
- Le Tanneur
- Lacoste Groupe
- Lancaster Maroquinier
- Longchamp
- Hermès International
- eBay
- Vestiaire Collective
- Asos
- MACY's
- Vinted
- The Real Real Inc. Company
- Bloomingdale's
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