Over the last few years, handbags market has witnessed a sea change which has resulted in the entire shift in its value chain with handbags production being shifted to low-cost countries like India, China and at the same time new channels of distribution emerging like online retailing. Also, change in the consumer preferences like growing demand for eco-friendly handbags has forced the companies to change and adapt their strategies according to the changing consumer preferences.

The US handbags market has witnessed a decline in 2008 breaking the growth trend since 2003 as a result of recessionary conditions prevailing in the US as well as rest of the world which not only resulted in fall in demand domestically but also resulted in fall in export demand for the branded handbags.

EU handbags market consists of six major markets i.e. Italy, France, UK, Germany, Spain and Netherlands accounting for the majority share in sales and production of handbags. In EU, majority of handbags are sold through specialist chain and independent retailers.

The key trends witnessed both in the US and EU handbag market is the growing demand for branded handbags from China and India as per capita income is rising in these markets fueled by high economic growth rates. Another trend witnessed is the growing importance of eco-fashion, resulting in the shift in consumer preferences. This has resulted in a shift in manufacturing process, as some handbags now being made from old wrappers, cartons and other waste materials.

Companies like Coach Inc, Louis Vuitton SA, Burberry Group Plc and Hermes International SCA have shifted their attention to markets like China and India as they are under-penetrated and at the same time offer huge potential for growth. The companies have realigned their distribution channels in order to cater to the needs of consumers more efficiently while reducing their operational cost.

The handbag industry is facing many challenges like fighting the counterfeiters, and coping with market oversaturation, which are acting as roadblocks for the growth of the industry.

The US and EU handbag market is all set to witness growth in the coming years as a result of huge export demand from countries like China and India and also as a result of improving economic conditions in domestic as well as international markets.

By combining SPSS Inc.’s data integration and analysis capabilities with our relevant findings, we have predicted the future growth of the industry. We employed various significant variables that have an impact on this industry and created regression models with SPSS Base to determine the future direction of the industry. Before deploying the regression model, the relationship between several independent or predictor variables and the dependent variable was analyzed using standard SPSS output, including charts, tables and tests.