Shiling leather makers go online to stitch a success story

At a time when many Chinese manufacturers continue to struggle with export orders, leather producers in Shiling township, in the Huadu district of Guangzhou, the capital of Guangdong province, are reporting a strong demand for their products overseas.

Leather production in Shiling－often dubbed China's leather capital－is expected to grow 13 percent this year compared to that of last year, and be worth more than $1 billion, according to local authorities.

"Exports in the first three quarters almost equaled that of the whole of last year, since we introduced our own brand－Sotto－a few years ago, which is especially designed to appeal to overseas buyers," said Ouyang Xiaojun, assistant general manager of Guangzhou Powerland Bags & Leather Co.

Total sales of its Sotto bags overseas soared by more than 30 percent year-on-year in 2013, he said, which Ouyang attributed to the booming e-commerce market and the company's increased efforts at developing their own products. "We are no longer a traditional processor. E-ecommerce has played a significant role for us in upgrading our products and sales channels," he said.

The company recently joined an e-commerce platform affiliated to the China Import and Export Fair, or the Canton Fair, the country's largest trade event.

"Joining the platform, along with thousands of other regular overseas buyers and sellers to the Canton Fair, has helped promote our products and increase trade efficiency," Ouyang said.

Lin Zhongjian, district head of Huadu, said more than 1,000 leather manufacturers in Shiling are selling online to tap both the international and domestic markets.

Lin said total online transactions for local leather products are expected to reach around 1.8 billion yuan ($292.8 million) this year.

"We have been encouraging local producers to transform their business models from being brick-and-mortar shops to virtual ones too, which has proved a huge boost to efficiency," said Lin.

He said three online trade platforms－for raw materials, stocks and leather products－were launched early this year with their number of members now reaching 7,200.

"Moreover, a growing number of local manufacturers have also developed their own e-commerce platforms, which have helped them find and attract more overseas buyers," Lin said.

As a result, more than 70 percent of leather products made in the township are being shipped overseas.

Shiling has around 8,000 companies engaged in the leather processing industry, and their combined production value is expected to grow by 9 percent year-on-year to 20 billion yuan this year, according to Lin.

The local authorities are also supporting the development of a number of international brands in the area and are encouraging three of its larger local players to list on the stock market within the next three years.

In addition to tapping international markets, some local producers, especially those processing foreign brands, have been using online platforms to grow their domestic sales.

"We are making more efforts to promote our products in the domestic market as the international market still has a low demand for Chinese leather products," said Li Shuisheng, a sales manager of Guangzhou Huishunzhan Bag Co, which expects to grow its international and domestic sales by 20 percent year-on-year in 2013.

With that in mind, Xu Yong, honorary chairman of the China Leather Industry Association, said that local manufacturers should be careful to better classify their products for specific overseas markets.

"Products to be sold online should also be separated from those offline," he said.