How the COVID-19 Pandemic Affected the Global Leather Industry

  • by Go-Uniq

Widespread shutdowns and the restrictions on mobility were the biggest blows according to Indian tanneries.


Nearly every form of business on the face of the Earth was hit by the effects of the COVID-19 pandemic and the ensuing lockdowns. These impacts extended to the Indian leather industry as well. In fact, according to a report by the Hindu in 2021, Indian leather exports had declined by 10.89%, hitting a value of $5.07 billion. This is lower than the $5.69 billion in exports the Indian leather industry saw between 2018 and 2019.

According to Aqeel Ahmed Panaruna, the Chairman of the Council for Leather Exports, India’s major export markets—Europe and the US—to which 70% of the exports are directed, were severely affected by the pandemic.

To say that the industry was affected would be putting things mildly. However, leather businesses that populated our local Indian market did manage a comeback.

 

The Impacts of the Pandemic

The leather industry, being a primarily manual manufacturing world embedded with traditional methods, was bound to be affected by the widespread shutdowns. The immediate consequences were seen when shipping lines and intercontinental cargo flights were halted, as leather was not considered an essential commodity by most governments.

In fact, even tanners were not willing to risk the danger to their employees’ health. According to an ILM Tanner Business Confidence Survey in 2021, almost 60% of tanners said that they would not visit or attend industry events or fairs at least until 2022.

The survey also revealed that the areas of business that leather makers viewed as most affected were business travel restrictions (60%) and the closing down of trade and transport (56%).


What Saved Leather Businesses?


One of the major saving graces for the leather industry was pivoting their sourcing strategy. Given the compromised nature of the trade relationships and the inability to travel, businesses had to source more locally. A perfect example of that is Deniva, because we source our leather locally and put an emphasis on maintaining employee health and satisfaction. We also prioritise an optimal manufacturing process that minimises human hours and reduces overall waste products.

And if you look at most other companies, that is how they pivoted to meet a more sustainable business model. They innovated with the tools they had, and the results have been amazing so far. Another element that saved the leather industry, and quite frankly, most other industries across the globe, was the accelerated implementation and adoption of digitization.

Being unable to reach your target audience is one thing, but when you combine that with the overhead cost of traditional marketing in the face of the massive economic blows landed by the shutdowns, then digital becomes the only solution.

However, that is not to say that it had no effect. With so many companies taking to social media, bolstering their websites, and strengthening their online presence, they were able to better understand what the audience wanted. And interestingly, target customers for nearly every business have become more eco-conscious, which means sustainability is indeed the way forward.

 

What Does the Future Hold for the Leather Industry?

According to the Indian Brand Equity Foundation (IBEF), between 2021 and 2022, India’s total leather exports valued in at $4.87 billion. This is a 32% increase from the previous year. In fact, in August of 2022 alone, the total exports stood at an impressive $473.87 million.

So, even if there are further recessions, the pandemic has taught us all the value of being prepared to pivot. And with the Indian leather industry accounting for around 13% of the global exports of leather, things are looking promising, but only time will tell. This ultimately leaves businesses cautiously optimistic.

 


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