Synthetic Leather Market by Material Type (Polyurethane-based, Microfiber Leather, Bio-based), End-use Industry (Automotive Industry, Fashion & Apparel, Consumer Goods, Oil and Gas Industry, Healthcare), and Geography - Global Forecast to 2031

Synthetic Leather Market Size & Forecast

The Synthetic Leather Market is expected to reach $104.9 billion by 2031, at a CAGR of 6.3% from 2024 to 2031. The growth of the synthetic leather market is driven by the increasing demand for sustainable materials, growing demand from automotive and footwear industries, and lower cost of synthetic leather as compared to natural leather. Furthermore, versatility and customization and growing demand of bio-based materials are expected to generate significant growth opportunities for players operating in the synthetic leather market.

Synthetic Leather Market Growth Drivers

Increasing Demand for Sustainable Materials

The increasing demand for sustainable materials and eco-friendly products is a major driver behind the expanding synthetic leather market. Traditional leather production is resource-intensive and relies on harmful chemicals. Synthetic leather, particularly when made from sustainable materials, typically has a lower environmental footprint in terms of water usage, chemical usage, and greenhouse gas emissions. Synthetic leather is often more cost-effective than natural leather and production of synthetic leather is more scalable, making it an attractive option for manufacturers looking to reduce production costs without compromising on quality.

Moreover, the automotive industry is a significant consumer of synthetic leather, majorly using it for car interiors. With the industry's push towards sustainability, synthetic leather has become a preferred material for car manufacturers aiming to reduce their environmental impact. The fashion and footwear industries are key markets for synthetic leather, leading brands to increasingly adopt sustainable options to align with consumer demand for ethical and eco-friendly products. Additionally, synthetic leather is widely used in furniture & upholstery due to its durability and ease of maintenance. The rising trend towards sustainable home decor is further boosting its demand. These factors collectively contribute to the growth of the market during the forecast period.

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Lower Cost of Synthetic Leather

Synthetic leather is generally cheaper to produce than natural leather. This cost advantage allows manufacturers to offer products at lower prices, making them more accessible to a broader range of consumers. This increased affordability boosts demand across various sectors such as fashion, automotive, and furniture. Synthetic leather production processes are highly scalable and can be controlled more easily than the processes for producing genuine leather, which depend on animal hides. This aspect of scalability allows for mass production, meeting high demand at lower costs.

Advancements in synthetic leather production technologies have led to a reduction in manufacturing costs over time. Enhanced techniques now allow for the creation of high-quality synthetic leather that closely mimics genuine leather, but at a significantly lower cost. These ongoing improvements in production methods continue to lower prices, making synthetic leather increasingly competitive.

Synthetic leather also offers greater versatility and customization options than genuine leather. It can be produced in a wide range of colors, textures, and finishes, allowing manufacturers to meet diverse consumer preferences. This versatility and cost-effectiveness attract more customers and fuel market growth throughout the forecast period.

Synthetic Leather Market Opportunity

Growing demand of Bio-based Materials

Bio-based materials, derived from renewable resources like plants & agricultural waste, provide an environmentally friendly alternative to traditional synthetic leather, which is often made from petrochemical products. Bio-based materials, derived from renewable resources, reduce reliance on petroleum-based products and minimize environmental impact. Enhanced production processes and economies of scale are steadily lowering their costs, making them increasingly competitive with conventional synthetic leather.

Also, advancement in biotechnology led to the development of high-performance bio-based synthetic leather that matches or exceeds the qualities of conventional synthetic leather in terms of durability, flexibility, and aesthetics. Such advancements are also making the production of bio-based materials more cost-effective, helping them to become more competitive in the market. Bio-based synthetic leather can be used in various applications, including automotive interiors, fashion, footwear, furniture, and accessories, broadening its market potential. As more regions adopt sustainable practices, the demand for bio-based synthetic leather is likely to increase globally, which helps to generate growth opportunities for market players.

Synthetic Leather Market Challenge

Complex Process of Manufacturing Synthetic Leather

Synthetic leather is typically made from a base material like polyurethane (PU) or polyvinyl chloride (PVC), combined with additives to achieve desired properties. The formulation process needs to balance durability, flexibility, and appearance, which can be challenging and costly. Also, synthetic leather production processes involve chemicals that can be harmful to the environment. The cost of raw materials and the complexity of the manufacturing process can impact the overall cost of synthetic leather.

The quality of synthetic leather depends heavily on the materials used and the manufacturing techniques employed. Complex  multi-stage processes need to be precisely controlled to achieve desired qualities like breathability, durability, and aesthetics. Manufacturers must optimize their processes to lower costs while maintaining high quality. Developing and implementing advanced manufacturing techniques to create high-quality synthetic leather can be expensive. This can translate to higher production costs compared to some simpler synthetic leather options or even traditional leather. These challenges hamper the development of the synthetic leather market.

Synthetic Leather Market Analysis: Key Findings

By Material Type: the Polyurethane (PU)-based Synthetic Leather Segment to Dominate the Synthetic Leather Market in 2024

Based on material type, the synthetic leather market is broadly segmented into polyurethane (PU)-based synthetic leather, microfiber leather, polyvinyl chloride (PVC)-based synthetic leather, bio-based synthetic leather, and other material types.

In 2024, the polyurethane (PU)-based synthetic leather segment is expected to account for the largest share of over 61.0% of the synthetic leather market. The large market share of PU synthetic leather can be attributed to several factors. It is typically less expensive to produce than natural leather, offering manufacturers a cost-effective solution. Additionally, PU leather closely resembles the appearance and texture of genuine leather. Its durability and resistance to various conditions make it a versatile option for a broad range of industrial applications.

Moreover, polyurethane-based synthetic leather is highly resistant to water, scratches, and fading; it is also incredibly versatile, ensuring a longer lifespan for products. It can be produced in a wide range of colors, textures, and finishes, allowing for a high degree of design flexibility for manufacturers.

Additionally, the polyurethane (PU)-based synthetic leather segment is projected to register the highest CAGR during the forecast period.

By End-use industry: the Individual Gamers Segment to Dominate the Synthetic Leather Market in 2024

Based on end-use Industry, the synthetic leather market is broadly segmented into automotive industry, fashion & apparel, consumer goods, oil and gas industry, healthcare, industrial manufacturing, aerospace and marine industries, and other end-use industries.

In 2024, the fashion & apparel segment is expected to account for the largest share of over 48.0% of the synthetic leather market. Synthetic leather is widely used in fashion and apparel due to its versatility, affordability, and sustainable features. Synthetic leather is commonly used in making various types of fashion products including jackets and coats, shoes, boots, bags, and accessories.

It offers a fashionable and cost-effective alternative to genuine leather, along with a broader range of design possibilities. Widely used across various industries such as footwear, furnishings, automotive, clothing, bags, purses, and wallets; it is the preferred choice for both manufacturers and consumers who seek a balance between quality and affordability. These benefits of synthetic leather in fashion contribute to the segment’s large share.

However, the consumer goods segment is projected to register the highest CAGR during the forecast period. Synthetic leather, particularly PU-based varieties, is known for its resistance to wear & tear, scratches, and fading. This makes it a good choice for products that experience regular use, like furniture upholstery, bags, and shoes. Synthetic leather comes in a vast array of colors, textures, and finishes. This enables manufacturers to produce items that replicate the appearance and texture of real leather or to experiment with design options that aren't possible with genuine leather. The advantages of synthetic leather in consumer goods contribute to the expansion of this market segment.

Geographical Analysis

Europe to Dominate the Synthetic Leather Market in 2024

Europe is expected to account for the largest share of over 44.0% of the synthetic leather market in 2024. Europe's keen fashion sense, coupled with synthetic leather's ability to offer trendy designs at affordable prices, has bolstered its market. The region has experienced notable growth, driven by the booming automotive and consumer appliances sectors.

Additionally, European consumers are increasingly prioritizing sustainability and environmental effects of their fashion choices in their purchasing decisions. This shift in consumer values is driving demand for eco-friendly alternatives like synthetic leather. The potential eco-friendliness of PU-based synthetic leather compared to traditional leather is a growing factor, particularly for eco-conscious brands.

Also, various state and regional governments in this region are focusing on bio-based, cost-effective, and durable products. European car manufacturers, particularly in Germany and Italy, largely utilize synthetic leather for car seats, dashboards, and interior trims. This material is prized for its durability, ease of maintenance, and premium appearance, all at a fraction of the cost of genuine leather. These attributes are anticipated to drive market growth for synthetic leather in the region.

Moreover, Europe is projected to register the highest CAGR of 8.0% during the forecast period.

Synthetic Leather Market: Key Companies

The report offers a competitive analysis based on an extensive assessment of the product portfolios and geographic presence of leading market players and the key growth strategies adopted by them over the past three to four years. Some of the key players operating in the Synthetic Leather market are Kuraray Co., Ltd (Japan), San Fang Chemical Industry Co., Ltd. (Taiwan), Teijin Limited (Japan), Mayur Uniquoters Limited (India), Nan Ya Plastics Corporation (Taiwan), FILWEL Co., Ltd. (Japan), H.R. Polycoats Private Limited (India), Covestro AG (Germany), ALFATEX ITALIA Srl (Italy), Yantai Wanhua Huayi Polyurethane Products Co., Ltd. (China), Asahi Kasei Corporation (Japan), Shanghai Hexin International Co., Ltd. (China), Toray Industries, Inc. (Japan), Wanhua Chemical Group Co., Ltd. (China), Fujian Polytech Technology Co., Ltd (China).

Synthetic Leather Industry Overview: Latest Developments from Key Industry Players

• In July 2024, BASF SE (Germany) launched Haptex 4.0, an innovative polyurethane solution for the production of synthetic leather that is 100% recyclable. This makes the reuse of the materials feasible.
• In August 2023, Katzkin Leather Inc. (U.S.) acquired Roadwire automotive leather to expands Katzkin’s capabilities to serve all its customers, from OEM and dealers to thousands of customers.
• In April 2023, General Silicones Co., Ltd. (Taiwan) launched a new Compo-SiL SL silicone vegan leather product series. The SL series is suitable for manufacturers of consumer products such as bags & backpacks, shoes, wallets, belts, book bindings, and covers that are looking for vegan leather supplies with factory-applied fabric lining.
• In December 2021, The Dow Chemical Company (U.S.) introduced LUXSENSE Silicone Synthetic Leather, designed for use in transportation seating and interiors, furniture, fashion, wearable devices, and consumer electronics, offering distinctive features.

Synthetic Leather Market Research Summary

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