LONDON–(BUSINESS WIRE)–Technavio’s latest report on the leather and allied product market in Romania provides an analysis on the most important trends expected to impact the market outlook from 2016-2020. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.
The revenue generated from leather and allied products is expected to reach USD 406 million by 2020, growing at a CAGR of over 8%. The leather luggage segment saw a significant increase of close to 11% in 2011 compared to the previous year. Chandrakumar Badala Jaganathan, a lead analyst from Technavio, specializing in research on bio-chemicals and bio-materials sector, says, “Large investments and innovative interiors in the automotive sector have boosted the leather market. Companies like Renault are investing in the facility that they acquired from Dacia Motors and converting it into the manufacturing hub of Central and Eastern Europe.”
The top three emerging trends driving the leather and allied product market in Romania according to Technavio chemicals and materials research analysts are:
- Growing demand from aviation industry
- Rise in marketing through social media
- Gradual increase in startups
Growing demand from aviation industry
Increased demand from the aviation industry is likely to be a major contributor to market growth during the forecast period. Leather is used in the aviation industry because of its durability and ease of maintenance. The leather used in aircraft interiors should be lightweight and flame retardant. Chrome-tanned leather, which is treated with flame retardants, accounts for a major share of this market. However, key manufacturers in the market are expected to introduce chrome-free tanning systems with flame-resistant properties to cater to the requirements of the aviation industry.
Rise in marketing through social media
Reluctance in the adoption of luxury goods and international products is a major challenge for the manufacturers of leather products in Romania. Reasons for this include lack of marketing and publicity from international manufacturers, and lack of awareness about the products among the general population.
“Social media marketing plays a major role in the growth of consumer goods market due to increased popularity of e-commerce. Social media websites such as Facebook, Instagram, and twitter increase the exposure of international brands, which boosts the market. Manufacturers are increasingly utilizing these platforms to increase their market share,” says Chandrakumar.
Gradual increase in startups
With the decline of the leather industry during the economic crisis, many companies filed for bankruptcy and exited the market. This has led to the availability of free capacities in the market, which is attracting new players. The leather and allied product market in Romania is likely to grow at a high rate during the forecast period. Factors such as rise in demand from the automotive sector for manufacturing interiors, increase in imports of leather goods from European countries, and increase in awareness of luxury products through the social media are fueling the growth of the leather products market in Romania.
The focus of start-ups is on either the price or the design of products. These companies concentrate on tapping the domestic market. Bogdandeliu, a Romanian-based company founded in 2013, focuses on designing of leather products.
The other primary manufacturers in the market are Amalfi, Zara, Pull&Bear, and Belmarel. These manufacturers offer a wide portfolio of products that include leather handbags, travel bags, and accessories.
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