The leather industry plays an important role in China's light industry, jointly supporting China's economic development. Today, we are in the era of internet dividends, so how should the leather industry develop when it meets e-commerce and faces the new normal of the economy? Ms. Su Huali, Deputy General Manager of Huicong Leather Network, shared exclusively on the topic of "New Normal and New Ecology of the Leather Supply Chain" at the "Winning China 2015 7th China Leather Supply Chain Summit (CLIS) and Industry Brand Event."
When mentioning the new normal and new ecology of the entire leather industry chain, Ms. Su first shared a piece of data: 1.27 trillion. This figure represents the total revenue of the main business of enterprises above the scale in the leather industry for the entire year of 2014. Comparing this data with the light industry data, the total operating income of the entire light industry is 22 trillion, with the leather market accounting for 1.27 trillion, which means the entire leather market occupies 9% of the light industry share, ranking 8th in the light industry. Currently, the overall economic situation in China is not very optimistic. China is a major producer and manufacturer in the leather and fur industry, and leather plays a very important role in international competition and cooperation within economic integration.
In terms of the main categories of the leather industry, our country is based on leather making, with leather chemicals and leather machinery as the business, mainly serving the shoe-making, leather clothing, luggage, and fur clothing sectors. As a professional B2B platform in the leather field, Ms. Su analyzed the operational status of the product line. According to product line classification, fur machinery, raw leather, artificial leather, etc., they conducted an investigation and summary of customer click situations, and currently, the activity level of leather machinery is the highest.
Currently, the big data of E-Business is 23.45 billion, which is also the total revenue of small and medium-sized enterprises in e-commerce across China last year in 2014. The growth rate of the Huicong E-Business platform has increased by 32% compared to last year. The GDP of our entire country actually maintains around 7%-8% each year, while the growth in e-commerce has already exceeded 32%, indicating that it has surpassed our GDP by more than four times, showing that the market space is very large. By 2018, the total revenue of B2B e-commerce will approach 54 billion.
The main components of B2B e-commerce are in energy, steel, electronics, and 3C products. Ms. Su mentioned that the proportion of leather in e-commerce is not particularly large, which also indicates that there is still a very large market space for leather in this area. Ms. Su shared about their member status, supplier traffic situation, and buyer-seller aspects.
Regarding suppliers, Ms. Su mentioned that there are relatively many purchase requests published on the Huicong platform for leather machinery and fur products. As an e-commerce enterprise, the most concerned aspect is the effectiveness, which is the so-called conversion rate. From January to August this year, the conversion rate of Huicong Leather Network is about 0.6%, and they hope to increase the conversion rate to 0.8% by the end of this year, raising it by another 0.2 percentage points. They provide the best service for shopping guides based on efficiency, using the Buy and Sell product as a foundation, attracting traffic from multiple sources, and combining offline transactions and financial support, ultimately implementing a five-link guarantee system.
Ms. Su finally mentioned that she hopes today's sharing can provide more valuable help to all enterprises in the leather industry, and also hopes that under the background of the new normal of the leather industry economy, everyone can better and more clearly understand the leather industry.
