When demand is high, with insufficient supply, prices increase rapidly and the quality goes down too. Manufacturers cannot increase the production when the scarcity of raw material persists. It is very tough to buy leather, cashmere or cotton nowadays for a reasonable price. The companies are much concerned about the high price of raw material as well as their insufficiency. The significant price rice has an impact on luxury industry globally which eventually hurt the manufacturers and entrepreneurs.
According to a research conducted by McKinsey & Co, 28% of Chinese would be ready to pay full price for luxury items, against 9% of Americans and 6% of Europeans. The investor on precious gems like diamond feels as if his money is safe in bank with high interest. With the sky rocketing price of gold, silver jewellery has made its way for the fashion collection or gold plated silver ornaments by the goldsmiths are becoming popular. Accessories maker also need cashmere, cotton, and leather with the rising prices which would never come down.
Luxury brands like Hermes, Nike have begun use leather companies for their luxury items. The overall leather shortage globally depends on 10 percent shifting to eating habits of vegan diet and campaign for ban on animal products, resulting in scarcity of calf skin, which is essential for handbags. The tanneries are not supplied with waste products as people have begun to turn to vegetarian food. China instead of exporting its raw hide, has shifted to import, due to domestic demand as many farmers have left for cities. The significant growth in the consumption of leather industry, ban on export of live animals, heavy duty on the leather industry has resulted on the verge of sudden large decline of the business.