Successful Conclusion of World Leather Congress with Plentiful Fruits and Splendid Blueprint
China has become the most dynamic economic driver to change the world industrial pattern and has drawn the attention of the world. On August 29, 2017, the World Leather Congress (WLC) with the theme of “Revolution——the direction of the leather industry” was held at the Pullman Hotel, Shanghai South. It was organised by ICT and co-hosted by TILA and CLIA and supported by founding sponsor APLF. Following the success of the World Leather Congresses in 2011 (Rio de Janeiro) and 2015 (Milan), WLC was held in China for the first time. As a significant event in the world leather industry, this signals the increasingly important position of China in its development.
WLC gathered over 600 participants, including upstream and downstream industrial leaders from the world leather industry chain, experts and scholars, enterprise elites and chief executives of commercial associations from major countries. It drew on their collective wisdom concerning the current state and trends in the leather industry, positioning and value, challenges and opportunities, the characteristics of modern consumers and their changing consumption behaviour, the influence of international trade rules, tanneries’ response strategies and other industrial hot issues with the aim of seeking sound strategies for industrial transformation and upgrading as well as sustainable development.
At the start of the Congress, Zhang Chonghe, Chairman of China National Light Industry Council and Director of All China Federation of Handicraft Industrial Cooperatives, Richard Pai, President of International Council of Tanners (ICT) and Taiwanese International Leather Association (TILA), Su Chaoying, Honorary Chairman of China Leather Industry Association (CLIA), and Lisa Howlett, Chair of Leather Industries of America (LIA) and Deputy President, International Council of Tanners (ICT), all delivered short welcome messages.
In his speech, Chairman Zhang Chonghe pointed out that, “now, China is deepening the supply side structural reform and promoting the construction of “One Belt and One Road”, which injects new impetus for the leather industry and creates a new opportunity for its international trade. Holding the WLC in China has great significance and is very timely for promoting the further development of the world leather industry”. He mentioned his wishes for the world leather industry, and called on his industrial colleagues to jointly draw up a blueprint, share the prosperity and create a bright future for the world leather industry.
President Richard Pai stressed that: “leather is considered as a luxury and high-end material. Its use in different products is very important both as ornament and as an integral component. The leather industry has unlimited potential and good development opportunities in the future; the world leather industry colleagues should join hands and make joint efforts to further develop the leather product market, improve the image of leather products and promote the development of the leather industry”.
Honorary Chairman Su Chaoying expressed that, “The theme of WLC this year is ‘Revolution——the direction of leather industry’, we hope, jointly through this congress, to probe into how the world leather industrial chain will respond to possible challenges in the next ten years as well as how to adapt to the quickly changing market demands.. We believe that the WLC is a very important platform, which can let us exchange information and to seek joint solutions.”
Chair Lisa Howlett maintained that the world leather industry had seen tremendous changes in the past century. For example, the US leather industry had shrunk remarkably in the past 150 years; but, she firmly believed that, no matter what change occurred, the leather industry would continue to survive and to make a contribution to the world economy.
Keynote Speeches, Analyzing the Status and Looking into the Future
The keynote speeches centered on the current view of the overall industrial development environment, the judgment on industrial development trends and features as well as the analysis of the industrial opportunities and challenges. Several heavyweight guests, such as Luca Boltri, Vice Director of UNIC Economic Department, Guo Kesha, Director of Policy Research Center of Chinese Academy of Social Sciences, Simon Yarwood, Publisher of World Leather and Li Yuzhong, Chairman of China Leather Industry Association (CLIA), were invited to share their thinking from their different perspectives.
LUCA BOLTRI, Vice Director of UNIC Economic Department, gave a broad overview of the whole industrial chain. He clearly raised points based on the product supply in the global leather market, raw material prices, the pattern of international trade, the trend of leather uses and other related data: “The world leather industry should pay attention to the upstream and downstream industrial chain, cooperate more actively in the development and improvement of green, environmental-friendly and value added products, and take more care to transmit clear and accurate information regarding leather and leather production, thus avoiding some misunderstandings by the public.”
Based on the optimistic economic situation in the first half of this year, one viewpoint considers that China has entered a new economic cycle, which was not agreed by GUO KESHA, Director of Policy Research Center of Chinese Academy of Social Sciences. He maintained that the overall China economy hadn’t met the conditions of continuous recovery, and there were no major factors driving a continuous economic recovery. Now, the underlying issue was “new normal”, rather than new cycle. That is, the interwoven aggregate quantity contradiction and structural contradiction would still continue. Conventional manufacturing industry, like leather, still requires a long period of readjustment to resolve these contradictions.
The voice of the World Leather publication in the leather industry is well established. Its publisher, SIMON YARWOOD, brought his vision of the future of the leather industry from global data analysis and some case studies: “For the sake of sustainable industrial development, we should have more innovation in terms of chemical use and tanning process, including the development of some lightweight leather, or fire-proof leather, or environment-friendly and even sustainable leather, etc. And, we cannot ignore leather quality, durability, aesthetic feeling and sense of reality. The source of nature is the leather’s advantage and uniqueness, and also the fundamental difference from plastic and other materials. Hence, it should be the mission of industrial practitioners to reveal its natural properties as well as true sense of reality.” One specific proposal was that the industry should be looking to eliminate the use of salt as a short term preservative, mainly because it underpinned inefficiency and had a seriously adverse environmental impact on vulnerable parts of the world.
With the theme of “innovation and integration, win-win and sharing”, LiYuzhong, Chairman of China Leather Industry Association, introduced the overall economic performance of China’s leather, fur and products as well as shoemaking industry in 2016 and in the first half of 2017 with full and accurate data and vivid graphic illustrations. He pointed out that the first half of this year witnessed the development trend of overall recovery of the leather industry, and main economic indicators had shown a remarkable increase on a Year on Year basis. In terms of industrial development, the powerful production capacity, huge market demand and complete industrial chain had become a strong support for industrial transformation and upgrading; an increasingly open system, a positive environment for ecological improvements and thriving new economic models also added new vitality for industrial development.
Focusing on “New Consumers”, Precision Marketing is Imperative
As everyone knows, China’s new-generation consumers have a strong ability to acquire information and their voices can be constantly heard, revealing their personality. Consumers’ changes are not only about information technology, but also more psychological and mental changes, as well as the influences that such thinking and psychology have had on retailers and manufacturers. WLC uses “The New Consumer” as the theme of the first session following to the introductory overviews because the attitude of consumers towards leather will decide the future of this industry to a large extent, and the industry must positively adapt to these changes and make corresponding adjustment.
Erica Ng, Senior Editor of WGSN, Ding Xia, President of JD.com–Fashion Business Unit, Mike Redwood, the spokesman of Leather Naturally and Director of Claytons Leather Group of Chesterfield, analyzed the characteristics and behaviour changes of new consumers from different perspectives, the influence of these changes on the industry, and especially the modes of sale; the session included how JD.com and other e-commerce platforms conduct precision marketing, taking account of the personalized requirements of consumers, and the difference between online and offline marketing, etc. The presenters believed that new consumers would not only pay attention to product quality, but also value the feeling brought by the brands, as well as the value and significance embodied therein; they dared to break out, and pay more and more attention to behavior, manner, appearance, self expression and personalization; they were more and more clear about what they want, and refused to become a part of the sheep flock effect; they were keen on online shopping because it brought them larger right of choice and they could enjoy the home delivery service.
How does an enterprise adapt to new-generation consumers? The presenters believed that an enterprise should conduct precision marketing by means of big data, deeply understand the change in consumption psychology behind their behaviours, and should consider the product pricing structure, what kind of people were the target market and what requirements the product prices should meet. Upon designing new products, it should take into account personalization, analyze the ideas of younger consumers, rather than consider consumers as a uniform group. In the increasingly social media savvy and interconnected society, an enterprise must follow this trend to remain successful in the market.
In the later panel discussion, Song Xiaowu, Senior Vice President of Belle also agreed with these views. He said that as a conventional enterprise with certain market share, Belle had a unique market relationship with consumers; to continue to position itself as an enterprise making fashion products, Belle must pay attention to its consumers and adopt their preferences and targets as its own.
Genuine Leather——Is It Still An Irreplaceable Material in the Future?
WLC’s third session had the theme of “The Future for Leather Product Manufacturers. The future of leather industry was discussed from the point of view of leather product manufacturers.”. Thomas Crockett, Director of Government & Regulatory Affairs, Footwear Distributors and Retailers of America (FDRA), analyzed the customs duty protection of the US shoe industry, the think tanks that influence the President’s trade policies, as well as the influence of adjustments in border taxes on the shoe industry, giving us a detailed understanding of the US, the largest export market of China’s shoe industry; Gareth Brooks, Managing Director of VF Asia Limited, penetratingly indicated that: “in the future, each link in the supply chain would see enormous change; if the materials used in shoe production couldn’t adapt to future manufacturing modes, they might be replaced by other new materials.”
The auto leather sector has been developing rapidly in recent years, and has become a bright spot in the global leather market. Stephen Jeske, Senior Vice President of Global Sales & Marketing, GST Auto Leather, pointed out that, “an important reason why the leather industry could flourish is because of the natural property of its materials. The same applies to auto leather. The reason why the auto manufacturers use leather as the interior material is because of leather’s natural origin and attributes, plus its customization, environment-friendly and other remarkable features.” However, it was important to continue to fight against inaccurate and misleading labelling of alternative materials with the superficial appearance of leather, which was becoming all too prevalent.
“The world is changing, and consumers’ consumption preference is also changing. How to find appropriate suppliers in the changing supply chain and meet the changing requirements of consumers is the key to an enterprise’s continuing operation.” Chad Martin, Senior Vice President and General Manager Beef Enterprise of Tyson Fresh Meats shared Tyson’s experience. He considered that sustainable development was a large concept, covering numerous aspects, including environmental protection, animal welfare, providing consumers with more healthy and safe food and leather products, protecting nature, offering a comfortable working environment, ensuring employees’ occupational safety, creating a harmonious community environment, etc. in the meantime, the transparency of supply chain was also important. The suppliers in the final session coincidentally stressed the “transparency of supply chain”, and expressed their views in the later panel discussion. “Consumers require more right to know all kinds of product information; if an enterprise fails to provide them with enough information or the information disclosure is not transparent enough, consumers are more likely to misunderstand”.
Respond to Challenges——Tanners Have Realized the Coming of the “Revolution” Era
“The Tanners’ Response”——the theme of the final session of the WLC, clearly defined the response of tanners. This rapidly changing era sees the coexistence of challenges and opportunities. How do tanners respond or prepare how to reply? As the speakers of this unit, Jon Clark, CEO of PrimeAsia, Lydia Lin, Asia Director of ZDHC Foundation, Fernando Bellese, Marketing and Sustainability Manager of JBS, Dietrich Tegtmeyer, President of IULTCS, are all industrial top figures. JON CLARK believed that “the industrial ecological system is a network built by different organizations, including suppliers, dealers, customers, competitors, governmental departments, etc. In this network framework, there is both cooperation and competition, and one can only survive through continuous improvement and flexibly adapting to changes.” LYDIA LIN shared ZDHC’s experience (zero discharge of hazardous chemicals) in management and control of hazardous chemicals. She stressed that the goal of ZDHC was that through cooperation inside the industry, the participants jointly set up and implemented the standard so as to better fulfil the management and control of hazardous chemicals.
“The whole industry requires the interested parties to directly confront challenges; good transparency is required on establishing and meeting solutions. In addition, the industry needs to build a value chain that meets consumers’ requirements. For example, upon development of a new product, correct product positioning should be in place. In the meantime, delivery speed, service and product prices should also be competitive.” FERNANDO BELLESE analyzed the trend of global animal husbandry, the leather consumption trend, and in turn gave its clear viewpoint. Dietrich Tegtmeyer stressed that the whole chain should have scientific attitude towards the cognition and control of chemicals, and it was important that leather was treated as a unique material, and not just a type of textile. He said: “the industry shouldn’t simply seek to avoid the use of chemicals, which was impractical; more important, it should select the correct products, and use chemicals at the appropriate dosage level.”
In the panel discussion, Michael Shih, President of Tong Hong Tannery Group, gave his viewpoint sharply: “tanning is the cornerstone of leather industry; tanneries shoulder the responsibilities of environmental protection, development and innovation to handle well pollution control, waste disposal and other arduous tasks, thus the industrial chain should offer full support and help them in change and reform. Otherwise, without tanneries, other chains would break.” His pointed view aroused extensive resonance from on-site guests.
Broadening the international view, and seeking the global development the third WLC yielded a complete success under the support and help of the world leather industry colleagues with plentiful ideas and a series of important common understandings: The world is changing, and the consumers’ behaviour modes, thinking and psychology have changed greatly; the leather industry should positively act and make adjustments in view of market changes, and should pay attention to sustainability, environment-friendliness, animal welfare, supply chain transparency, etc.; the uniqueness of leather lies in its source of nature, and so the future development direction of the leather industry should exhibit more the natural properties of leather as well as true sense of reality. These important common understandings would help the leather industry in positioning and grasping the future development direction. We firmly believe that as long as it can conform to the development trends of the times, directly face challenges, seize opportunities, conduct innovation and integration and work with suppliers and customers to fulfil win-win and shared goals, the global leather industry will go from strength to strength!
Written by Liang Wei
Please stay tuned for details of the next World Leather Congress.