Middle East luxury leathergoods demand

Strong demand for leather luggage in the United Arab Emirates (UAE) is lining the pockets of tanners in Italy, Pakistan and Thailand. According to a recent global online survey by marketing data company A C Nielsen, the UAE ranks among the top five countries worldwide for luxury branded luggage. Luxury leather bags make up 25% of all sales, according to the survey, with a quarter of Internet users in the UAE opting for luxury luggage, and a further 10% saying they would also opt for luxury if money was no object (which is often the case for its oil rich citizens). 'Sales are boosted by the high number of expatriates living in the Emirates that are buying baggage to travel, and the 5.7 million visitors Dubai received in 2005', said Louis Harb of Leather Palace, which has nine high-end stores in the Emirates. Harb said most leather luggage sold at his outlets comes from Hong Kong and Italy. 'Cheaper leather products come from Thailand, India and Pakistan', he added. The UAE, which is Thailand's fourth largest importer of leather footwear, is also the sixth largest importer of Thai leather handbags, importing handbags worth US$1.4 million in 2000. General leathergoods consisting of handbags, folders, wallets and premium leather gifts consist of 27% of Thailand's total leather exports, with the UAE accounting for 1.67% of leather luggage goods exports in 2005. A spokesperson for the Thai Leather Goods Association said exports continue to be strong, but mainly for footwear. With no tanneries in the UAE, the oil-rich country is reliant on imports, with Italy topping the list, according to Mr Ravi, who ran the Al Hida'a Leather Exhibition in Sharja for ten years until 2003. However, due to rising leather sales in the Gulf the expo might re-launch next year, Ravi added. 'We are selling more leathergoods in comparison with the footwear sector to the UAE, but 2005 was not a good year overall for the Italian tanning industry', said Mrs Fulvia Bacchi from UNIC. Despite a 1.9% decrease in the number of Italian tanneries and a 2.5% export decrease, sales to the UAE remained stable, according to UNIC. Bacchi said she was uncertain as to whether increased demand for leather luggage in the UAE was positively affecting Italian tanneries. Pakistani leather exports to the UAE were worth US$60 million during July-December 2005 compared to US$7 million during the corresponding period of 2004, according to Pakistan's Federal Bureau of Statistics. Worldwide, Pakistani leather exports during July-March period of the current fiscal year amounted to US$387 million compared with US$244 million during same period in 2004-05, showing a 57% increase. However, Kumar Tama, a spokesman from the Pakistani export division, said only low range leathergoods were being exported to the UAE, with exports of leather luggage goods remaining low. He said Pakistani tanneries mainly produced leather gloves, footwear and other leather garments for the UAE market. Tama also said that cheaper leather products from Indonesia, China and India are adversely affecting Pakistan's tanneries. Indeed, several Indian tanners Leather International contacted were keen on entering the UAE market. 'It is a growing market and is a market we would like to get into', said Mr Narayaman of Indian tannery Saroj Leathers, which exports leathergoods to Europe and the Far East. But with strong demand for luxury leather luggage from Italy and Hong Kong, and Thai and Pakistani tanneries producing few luggage goods, the latter will have to diversify to gain a slice of the UAE and Gulf markets.