handbag

The increasing cost of production is one of the biggest challenges facing China's casual backpack and handbags industry today. Soaring material prices and rising workers' salaries pushed manufacturing costs up by as much as 20 percent last year. However, because of intense competition of bags industry, especially in the low-end segment, suppliers have been able to pass only 10 percent of these additional costs to buyers. This has resulted in shrinking profit margins, particularly for companies that focus on low-priced knapsacks and schoolbags and handbags. Makers are now looking at ways to deal with the higher production costs and increase their profitability. Some makers will increase the production of high-value products such as fashion and specialty backpacks and schoolbags and handbags, which will give them higher profit margins. Multicolor casual backpacks and handbags in brighter shades are becoming popular. Many of the new products come with multiple compartments for mobile phones and CD or MP3 players. Some even have earphone ports. Developing new designs and researching alternate fabrics that can either lower the cost of a product or increase functionality will be the R&D focus for most makers. OEM production will continue to drive exports for the next few years.