3D Printing in Handbag industry, by JOYCE FAN (student no: 53511796)

Regardless of time, handbag is a necessity item for women to carry personal items who leave home. Nowadays, handbag is a luxury and fashionable item which reflects personal taste and self-image.

Since 3D printing technology was first introduced at 1980s, it has never stopped developing into a much adaptable technology into the commercial world. It is believed that3D printing may spur a manufacturing revolution in the handbag industry.

Kipling is a famous Belgian-based bag and luggage brand that have released an upcoming 3D printed handbag in 2014, named “The Monkey Madness city Jungle Shopper”. A large format SL 3D printer enables the bag to be produced with resin, resulting in a unique, smooth and detailed print that could hardly be produce using other production method.

http://3dprintingindustry.com/2014/01/27/3d-printed-primates-tote-kipling/

Nowadays, the handbag industry is facing keen competition. Even luxury brands like Hermes, Channel, Gucci, Dior, Mui Mui are facing competition from other “affordable brands” like Coach. With the opportunity presented by globalization, industry players are advertising and distributing their products around the globe. There is no doubt that a Hermes handbag can easily be found in large cities around the world, like Singapore, Tokyo, Hong Kong and Shanghai, etc.

High-ended handbag brands emphasis on the high-quality, innovative design as well as the limited number of production. It is believed that only customized handmade handbags can satisfy personalized needs.

The opportunity presented by Globalization:

• Market

Globalization provides a larger and better platform (greater market/potential demand) for high performing industry players to produce and market its products around the globe.

Ø  Adopting 3D printing

Companies can benefit from a higher volume of sales driven by the global demand instead of demand from local market.

• Cost (Global demand->mass production->economies of scale)

Besides, economies of scale can be achieved through mass production, as large quantity of production will reduce production costs.  Producing larger quantity reduces unit costs of product.

Ø  Adopting 3D printing

Easy modeling

With 3D technology, companies can create low cost product model during the R&D and selling process, which reduce the related modeling costs. Mass production with 3D printing technology can be machinery oriented which involves less human resources employed, this in turn reduces production costs.

Besides, with the 3D printing technology develops, companies may receive tailored-order of 3D products instead of mass production. Tailor-made 3D printed product simplifies supply chain process from online purchase to direct shipping. This involves lower costs compare to traditional global supply chain activities.

• Risk

Customers from different region have different taste among handbags. Industry players often produce products with different size, design, materials for different market and charge at a different rate sometimes. 

Some regions may encounter economic growth while the other going through a recession. Raise in demand in some regions may offset the fall of demand in other region. Business risk can be diversifying through the natural demand stabilizer and the broader product range with globalization.

Globalization can benefits companies from reducing the business risk while companies will face higher global competition when entering into global market compare to local market.

Ø  Adopting 3D printing

With 3D printing technology, the entry barrier can be relatively higher compare to other industries due to the higher investment/fixed costs of specialized machinery as well as technical resources.  

3D printing machineries, software and IT support are some of the high cost crucial resources that companies shall invest on at the first stage of production. This may deter some potential competition out of the industry.

• R&D in 3D printing technology

As a recent technology, there are a number of limitations in the development of 3D printing technology, including the invention of materials choice.

With the help of globalization and advanced information technology, industry experts and innovative ideas can be easily transfer and communicate through face-to-face and online interactions, which enhances research and development efficiency and effectiveness. 

Contradictions or tensions to work out through

Consequences of technological adoption or oblivion

Market: choice & uniqueness

With the 3D printing technology, the global handbag market can provide a wider choice of handbag for customers. The technology enables the industry to produce sophisticated designs that were not possible in earlier years. Besides, more input materials are expected to be use in production.

Mass or niche production?

It is believed that mass production of 3D printed handbags can effectively reduce the unit costs. However, will it erode the product uniqueness and will it lose the produce uniqueness in the modern market?

There is a high demand on high quality handbags in the global market, especially from countries with high economic growth, e.g. China. Some customer demand customized handmade handbags, which satisfy, personalize needs instead of largely replicated products as it increases customer’s satisfaction on the uniqueness. Thus, apart from mass production, it is believed that company may market its tailor-made 3D printed handbag as a luxury items and target as a high-end market segment, which may create higher values to the company comparatively.  

Company: market structure

With the 3D printing technology, more complex handbag designs can now be manufacture and the service and product quality of manufacturers can be enhanced to a higher level. This may help some companies to foster its market position in local as well as global market.

Operation: Smaller manufacturers may close down

In the first stage, 3D printing technology increase the company’s investment on specialized machines, software and technicians (operation and R&D). Since the initial fixed costs can be high for some less financially healthy companies, it may deter some companies from entering into the market segments. This may decrease some smaller business’s competitiveness or even decrease the number of smaller manufacturers in the market under globalization.

Threat: can “limited edition” product be protected?

With the patent of certain 3D printed technology expires, small and cheap 3D printers are offer in the market currently. Will 3D printers enter into the general public homemade market and people actually print the small-sized handbag at home using some common materials? This involves the intellectual right & property implications in 3D printing handbag, which highly depends on the future market and technology development.