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1. Current Export Status of China's Bag Industry

According to the official export data from the General Administration of Customs of China, in 2025, China's total export volume of bags and related products was 3.682 million tons, with a slight year-on-year increase of 1.6%. However, the total export value amounted to 213.99 billion yuan (29.8882 billion US dollars), a decrease of 12.9% compared to the previous year, and the average export price decreased by 14.3% year-on-year.

From this set of divergent data showing "quantity increasing and price falling", it can be seen that the scale of China's bag exports has not shrunk, but the export prices have fallen sharply, reflecting a significant weakening of the industry's bargaining power. This is precisely the structural crisis currently faced by China's bag manufacturing industry.

2. Core Causes of the Crisis

Currently, the pressure faced by China's bag manufacturing industry does not simply stem from the loss of total orders, but rather from a structural dilemma caused by the combined effects of downward pressure on global procurement prices, intensified domestic capacity competition, and the rise of manufacturing bases in Southeast Asia.

2.1 Global Procurement Prices Are Under Pressure as Overseas Buyers Become More Cost-Conscious

Currently, international brand owners and buyers are becoming increasingly sensitive to product costs and procurement prices in the face of a more cautious consumer market. This change directly increases the price pressure on Chinese manufacturers when securing orders.

Therefore, a key issue currently facing the industry is not the "lack of orders", but rather the fact that the same orders are becoming increasingly less valuable.

2.2 Southeast Asian Manufacturing Hubs Are Rising, Giving Global Buyers More Choices

Meanwhile, Asian manufacturing bases such as Vietnam, Cambodia, and Indonesia are becoming important choices for global brands in diversifying their supply chains.

This change does not imply that Southeast Asia has replaced China. In fact, China boasts a more comprehensive bag industry chain, a mature supplier system, and stronger capabilities in product development and complex manufacturing. However, the rise of manufacturing bases in Southeast Asia has indeed weakened the bargaining advantage of Chinese manufacturers.

2.3 Intensifying Domestic Capacity Competition Further Drives Down Prices

Huge production capacity was once one of the most important competitive advantages of China's bag manufacturing industry. However, as overseas purchasing prices continue to be suppressed and international buyers have more supplier options, this advantage is turning into more intense internal competition.

A large number of manufacturers produce similar products and serve similar customers, which makes them prone to engaging in direct price comparisons when competing for orders. Low prices have become the most direct competitive means for small and medium-sized manufacturers to win orders.

3. Profit Margins of Chinese Bag Manufacturers Are Being Squeezed

The pressure faced by China's bag manufacturing industry will not only be reflected in export data, but will also directly affect the actual profits of bag manufacturers.

When export prices continue to decline, the manufacturing costs of bag factories, such as labor, raw materials, energy, and compliance standards, do not decrease simultaneously. This means that the factories are facing the pressure of "decreasing revenue but unable to reduce costs".

In the past, many factories could rely on large orders and mass production to compensate for lower profits per unit. However, as price competition intensifies, it has become increasingly difficult to maintain profitability solely by expanding production.

This also implies that in the future, competition among bag manufacturers will no longer solely revolve around production capacity and price, but rather on who can create products with higher comprehensive value.

4. Industry Consolidation Is Accelerating

As price competition intensifies and profit margins continue to shrink, the bag manufacturing industry in China is undergoing accelerated differentiation.

For factories primarily reliant on low-priced orders, price reductions mean further diminishing profits, and some less competitive enterprises will face increasing operational pressures.

Meanwhile, bag manufacturers with excellent product development capabilities, sophisticated processes, quality control measures, and supply chain integration abilities are more likely to rely less on low-price competition by increasing the added value of their products.

Therefore, this crisis will not cause all Chinese bag factories to decline simultaneously, but is more likely to accelerate the industry reshuffle.

5. Will Southeast Asia Replace China in Bag Manufacturing?

In the short term, the answer is no.

Southeast Asian manufacturing does divert some bag orders, but currently, the main orders diverted are still those with lower value and higher standardization. In contrast, in the field of high-end, complex craftsmanship, and highly customized luggage, China maintains a clear competitive advantage, thanks to its complete industrial chain, mature manufacturing system, and strong product development capabilities.

Therefore, the more likely trend in the future is the further division of labor in the global bag supply chain:

Orders that are standardized and cost-sensitive are distributed to low-cost production bases, while orders requiring complex manufacturing, rapid development, and strong supply chain collaboration capabilities are still concentrated in China.

Under this trend, fully leveraging and strengthening the core advantages of Chinese manufacturing will be the key to maintaining the competitiveness of China's bag manufacturing industry in the future.

6. What Is the Real Crisis Facing China's Bag Manufacturing Industry?

Upon summarizing the preceding analysis, it becomes evident that the genuine crisis confronting China's bag manufacturing industry is not the absence of orders, but rather the shifting competitive paradigm it once relied upon.

Low cost is no longer China's unique advantage, scale no longer means orders, and production capacity does not equal profit.

Therefore, this crisis is more like a re-screening of manufacturing capabilities.

In the future, China's bag manufacturing industry will still occupy an important position in the global supply chain, but the way of competition will change - from simply pursuing lower prices and greater production volume to providing higher product value, more stable quality, and stronger manufacturing capabilities.

The crisis in China's bag manufacturing industry marks a turning point as the industry transitions towards high-quality development.

Related Reading

1. 2025 China Bags and Luggage Export Industry Review
2. Differences Between Importing Bags from China and Vietnam