With the rise of internet marketing, people's consumption habits and lifestyles have undergone tremendous changes. Especially under the impact of the COVID-19 pandemic in 2020, live-stream e-commerce, content marketing, new retail and other models have become common sales methods. In turn, people are demanding higher standards in all aspects such as quality of life and product quality.
Compared with the profound brand heritage of the international luggage industry, China's luggage industry started relatively late. However, with economic globalization and the continuous growth of China's economic level, the brand awareness of the domestic luggage industry has awakened. Seizing the opportunity to adapt to changes, the industry has carried out a brand-new transformation and upgrading, reshaped brand value, and ushered in new development opportunities in the post-pandemic era.

Market Polarization: Opportunities for Chinese Luggage Brands to Break Through

Today, China's luggage industry is not only the world's manufacturing center but also the world's largest consumer market. China has thousands of luggage manufacturers, producing nearly one-third of the world's luggage products. The recovery of the tourism market after the pandemic will further boost the development of the industry, with the global market scale expected to reach approximately 211.2 billion US dollars by 2025. It is evident that China's luggage market has a huge volume and has been in a period of accelerated growth in recent years.
For a long time, however, the business models of the domestic luggage industry have been dominated by Original Design Manufacturers (ODM) and Original Equipment Manufacturers (OEM), with the industrial chain concentrated in upstream auxiliary materials and midstream OEM production. Most OEM manufacturers are small in scale but large in number, with low product added value and fierce homogeneous competition. ODM manufacturers are larger in scale, with certain R&D and design capabilities, and most also operate their own brands. Luggage brand operators are mainly from abroad, who control the R&D, design and sales links with the highest product profit margins.
The distribution of the domestic luggage industrial chain is reflected in a serious market polarization. On the one hand, domestic luggage brands are generally positioned in the low-end market, with weak brand influence, low markup rates and unit prices mostly below 500 RMB. On the other hand, overseas brands occupy the high-end product line, with unit prices ranging from thousands to tens of thousands of RMB and high markup rates. This brand gap has become a favorable opportunity for the development of cost-effective domestic luggage brands such as OIWAS and 90 Points, whose suitcases priced between 300 and 1,000 RMB have seen a booming sale. Before these brands, it was difficult to find domestic luggage products with high appearance, high cost performance and high quality in the market. At present, the downstream consumer market is relatively fragmented: consumers in third and fourth-tier cities are still in the process of consumption upgrading, while those in first and second-tier cities are becoming more rational in consumption, focusing on cost-effective and personalized products. Changing business models and innovating product thinking are the key to further deepening brands and expanding the market for the domestic luggage industry.

Reverse Promotion of Product Line Upgrading by Consumer Demand Trends

In 2020, people's lifestyles changed drastically under the impact of the COVID-19 pandemic, and their consumption habits also underwent great changes accordingly. According to the 2020 Global Top 10 Consumer Trends Report released by Euromonitor, a global market research company, the major global consumer trends in 2020 revolved around two themes: convenience and personalization. Private customization, diversity compatibility, preference for local brands and globalization have all become the reasons for people's consumption choices. These consumer trends also have an extremely profound impact and significance on the luggage industry.
The traditional luggage industry is closely linked to the development of the tourism industry. The travel panic caused by the COVID-19 pandemic has dealt a huge blow to the tourism industry and also affected the travel market. Travel-related products such as hotel accommodation, travel tickets and suitcases have all faced a slowdown in sales growth. Commuting, going to school, shopping and short-distance travel have become the main travel modes in people's lives, which has also changed people's demand for luggage. Therefore, luggage enterprises represented by Samsonite and OIWAS have timely adjusted their product production lines and categories, launching luggage products more suitable for daily travel. For example, OIWAS's business backpack and briefcase series specially launched for business travel and meetings were highly popular during this period, and functional bags such as children's schoolbags also performed extremely well.

Sustained Growth of Online Sales: Channel Support for Adapting to Changes

Another change that consumption habits have brought to the luggage industry is reflected in sales channels. The total online retail sales have maintained a steady growth; data shows that China's national online retail sales rose nearly threefold from 2014 to 2019. Affected by the pandemic, online retail performed exceptionally well in 2020, accounting for 23.6% of the total retail sales in the first quarter of 2020, a year-on-year increase of 5.4%.
Among these, live-stream e-commerce has performed particularly prominently in the past year. Its authenticity, real-time interaction and the sense of safe distance through the screen have met the strong consumption demand of people who were inconvenient to travel during the pandemic, making live-stream e-commerce an important traffic entry that major brands are scrambling to seize as a dark horse. Amid the huge traffic boom, various methods have emerged one after another, such as cooperating with popular streamers, business owners conducting live streams in person, and building brand live broadcast rooms, and the luggage industry has also tried live-stream e-commerce one after another. Among them, luggage brands such as OIWAS and BROMEN have performed outstandingly, establishing good cooperative relationships with top Taobao streamers such as Viya, Li Jiaqi, Lie'er Baby and Sydney, achieving both a good reputation and strong sales performance. In addition, OIWAS has set up brand live broadcast rooms on Taobao, Douyin and other channels to deepen interaction with users, which has been widely recognized by fans. Adapting to changes in a timely manner – it is such acute market perception and adaptability that have made OIWAS luggage a travel companion chosen by more than 50 million people.

Younger Consumer Groups: Cross-border Innovation Boosts Brand Breakthrough and Growth

At the beginning of the reform and opening up, luggage was a necessity, only meeting the basic needs of loading and storage. With the continuous improvement of living standards, people's demand for beautifying their self-image has also increased, and luggage has become an accessory in clothing. Different colors and styles of clothing are matched with luggage of different colors and styles. Modern people's demand for luggage is more diversified and personalized.
As the post-2000 generation enters their twenties, the consumption capacity of the post-1995 and post-2000 generations is rising rapidly. As digital natives born in the internet age, they have become the backbone of online consumption. This group has distinct consumption characteristics: they pursue practicality, are keen on domestic products, pursue individuality, and have a strong circle culture attribute. The huge consumption potential brought by "consuming for love" is constantly being stimulated, and this group is also the consumer group that major brands love and strive to win over. To cater to young consumer groups, major brands have successively launched measures such as personalized customization and IP co-branded products, winning young consumers and maintaining their loyalty with more targeted marketing and more prominent characteristics.
In recent years, product and marketing innovations triggered by cross-border co-branding in the luggage industry have injected new vitality into luggage brands. 90 Points has successively collaborated with film and television IPs such as The Wandering Earth and The Lost Tomb to create situational luggage products, showing a national trend style with strong local characteristics; BROMEN has partnered with Disney IP to meet the personalized product needs of young users; OIWAS Luggage's cooperation with Coca-Cola and Snoopy is also a successful attempt at IP cross-border cooperation, injecting classic fashion genes into the brand. Undoubtedly, cross-border co-branding has become a trump card for gaining an unexpected victory, and the cooperation between classic IPs and brands has attracted much attention. The collision of different cultural circles not only breaks the predicament of product homogeneity but also strengthens the emotional connection between brands and young consumer groups.

Under the Huge Market Scale: A Promising Future for China's Luggage Market

Since the 1990s, with sustained economic development and rising personal income, China's total GDP has also increased exponentially. Under the impact of the COVID-19 pandemic, the global economic situation declined overall in 2020, but China's GDP still maintained a certain growth, reaching 1,016 trillion RMB and exceeding the 100 trillion RMB mark for the first time. Under the premise of the steady growth of the national economy, the overall development prospect of China's luggage industry remains promising.
The steady growth of per capita disposable income provides the basic driving force for the growth of luggage consumption; moreover, branding and large-scale operation have become an irresistible trend, with the brand influence of Chinese luggage brands gradually increasing and markup rates rising steadily. Therefore, the next decade will still be a golden period for the development of China's luggage industry.
Faced with the consumer market suppressed by the pandemic, luggage brands can take advantage of the opportunity to accumulate strength. In the short term, leveraging the momentum of China's economy taking the lead in recovering, they can make efforts in both domestic and foreign sales to consolidate the sales strategy of "developing both internally and externally". In the long run, they need to strengthen their internal capabilities: integrate luggage design and manufacturing with international trends, produce high-quality and unique products, shape distinct brand characteristics, and develop more marketable products. Only by adapting to changes can we keep pace with the development of the times; only by innovating and breaking through can brands remain invincible.