1. Luggage industry: high market share of overseas leaders and large upside space for local brands

      The overall market size of the global luggage industry shows a slow single-digit upward trend. According to Euromonitor data, the global luggage industry CAGR from 2006 to 2019 is 4.24%, and the global scale reached a peak of $153.576 billion in 2019. 2020 is affected by the epidemic, the economic downward pressure has increased, and the travel consumption scenario is severely restricted, resulting in a decline in the market scale of the luggage industry, with the market scale declining by 20.02% year-on-year in 2020. The market size of the luggage industry declined by 20.02% in 2020. As the global epidemic stabilizes and the international travel market slowly recovers, the global luggage market is expected to continue to recover slowly.

      China's luggage industry market size growth rate is the first in the world. According to Euromonitor data, the market size of China's luggage market from 2006 to 2019 CAGR is 11.06%, which is nearly three times of the global growth rate. The domestic market will reach a maximum size of $34.701 billion in 2019. 2020 will see a 9.88% year-on-year decline due to the impact of the epidemic.

2. Focus on China: the global luggage manufacturing power & luggage consumption power

      China is the world's largest luggage manufacturing country, the leading concentration is low, far from the era of competition in stock. From the perspective of business model, the luggage industry is mainly divided into three categories: processing manufacturers OEM, professional manufacturers ODM, brand operators. The Chinese market is mainly dominated by ODM/OEM, with production capacity distributed in Guangdong, Zhejiang, Baigou Town in Hebei and Nantai Town in Liaoning, etc. China's bag manufacturing output has accounted for more than 70% of the global share. China's luggage manufacturing output has accounted for more than 70% of the global share. Luggage OEM manufacturing enterprises are generally small in scale and large in number, with fierce market competition and weak independent R&D technology, and have not yet formed differentiated competition.

      China's luggage industry started late, with fewer brand operators and a lack of mature and competitive independent luggage brands. International brands quickly seize market share by virtue of their brand advantages, domestic brands by the impact of foreign brands, domestic brand output power is insufficient, brand awareness in the gradual formation.

      China is the world's largest luggage consumer market. According to Euromonitor statistics, the total retail sales of China's luggage industry reached 220 billion yuan in 2019, and the total retail sales of the United States ranked second was 209.5 billion yuan. In terms of the luggage consumer category, according to the GMV data of Tmall and Taobao luggage products in China in 2020, the transaction value of women's bags stands out, followed by backpacks and luggage. According to Euromonitor, the global sales forecast by category for 2021-2025 shows that the luggage category has the fastest growth rate. The retail sales of luggage in the domestic market has maintained a high double-digit growth rate in recent years, with a CAGR of 11.28% from 2015 to 2019.

3. Luggage industry drivers

Travel industry recovery, driving sales of travel-related products

      One of the factors associated with the luggage market is travel, and the growth rate of China's luggage market is basically consistent with the growth rate of the number of domestic travelers. With the long-term steady growth of per capita disposable income, people's consumption consciousness has changed significantly, with basic consumption demand declining and conscious consumption demand rising rapidly, the new consumption era has driven the rapid development of tourism. The number of travelers fell precipitously in 2020 due to the global epidemic, down 52.05% year-on-year. It is expected that as the epidemic eases at home and abroad, the release of tourism consumption demand will bring some recovery to the luggage market.

Consumption awareness change: new scene demand, segmentation category development

      With the improvement of consumers' pursuit of quality of life, the development of the luggage industry has a broader space, customization, personalization, functional luggage will be the mainstream trend in the future. Scenario-based demand has promoted the development of segmented categories in the luggage industry. The consumption scenarios of the luggage industry include not only travel, but also home luggage, computer luggage, and even the epidemic in 2020 has given rise to the segmented category of epidemic prevention bags. Young consumers pay more attention to brand tone and fashion, the pursuit of international brands has declined, and the acceptance of national trendy products has increased significantly, this change in consumption trend brings development opportunities for domestic luggage products, and the local luggage market is expected to have more room for development.

Digital Transformation: Digital Empowerment of Supply Chain Management

      In the new retail era, digital transformation enables supply chain management and drives further capacity release in the luggage industry. With the change of consumer habits, the trend of the luggage industry to open up online and offline fully integrated channels is obvious, forming a vertically integrated business model guided by customer demand, building the luggage industry product design and production digitalization, digitalization of operation management, digitalization of warehousing and logistics.

      After the digital operation is fully connected, it will form a customer order-driven production, and realize data sharing with the factory and logistics end to achieve visibility from order to factory production to logistics and transportation, reduce the risk of inventory backlog and raw material cost fluctuation; at the same time, it will accelerate the feedback of market user information, conduct big data analysis at the terminal, get rapid response and control at the design and production end of the product, and precisely match the user's individual needs. At the same time, it will accelerate the feedback from market users, conduct big data analysis at the terminal, get rapid response and control at the design and production end of the products, precisely match the users' personalized demand, combine with the trend of luggage market, and improve the conversion rate.