Consumer spending on non-essential items drastically declined over the past couple of review periods due to the increasingly weak economic conditions in South Africa. Items that do not meet a basic need are generally removed from households’ budgets as the South African GDP growth stalls after a deep recession lasting from the third quarter in 2019 until the same quarter in 2020, continuing increases in the unemployment rate, and a drop in consumer confidence levels as well as a rise in political tensions and electricity shortages.
The import and export trade figures for bags and luggage to and from South Africa were lower at the end of the review period than those reported in previous years. The lower figures are as a result from disruptions in product supply chains caused by the COVID-19 pandemic.
Bags and luggage remained a highly fragmented landscape in South Africa in 2020, comprising a mix of luxury brands such as Louis Vuitton and Gucci, which appeal to affluent and aspirational consumers, while brands such as Avon (the overall leader of non-luxury handbags) offer affordability and accessibility through direct selling. On the other hand various private label lines such as The Foschini Group Ltd and Truworths International Ltd offers practicality and economy options under non-luxury handbags and wallet and coin pouches, while Woolworths’ private label increased its value share thanks to having different ranges targeting more affluent consumers as well as consumers that want a more affordable handbag or wallet and coin pouches.
With low vaccination rates in South Africa, the country is unlikely to see a respite from the pandemic in the short term. Breaks have evolved and currently include weekends away to nearby destinations or visits with friends or family, as well as staycations involving no travel.
Changes brought about by the COVID-19 pandemic saw consumer demand for bags and luggage change, resulting in companies suffering. For example, The New House of Busby was placed under voluntary business rescue in July 2020 and was rebranded to FrontierCo.
Consumers made increasing use of e-commerce in 2020 as the pandemic led to consumers eschewing brick-and-mortar shops resulting in this channel seeing growth rates of over a 100% for many retailers. During the initial hard lockdown in the second quarter of 2020 all non-essential services and retailers were closed.
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Understand the latest market trends and future growth opportunities for the Bags and Luggage industry in South Africa with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Bags and Luggage research and analysis database.
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