16 Dec 2016
Focus on China
The Chinese mainland eyewear sector is tipped to be worth more than Rmb113.147 billion (US$16.3 billion) by 2019, according to the Industrial Information Network’s website chyxx.com. The market is currently valued at around Rmb80 billion, with more than 800 million mainland consumers who need some form of visual aid.
The success of the Internet Plus strategy – a combination of offline and online offerings – has given consumers greater choice of eyewear and greater pricing transparency. In a departure from previous practices, many mainland consumers own more than one pair of spectacles, with different glasses favoured for working, reading, socialising, travelling and outdoor activities.
According to the same statistics, the current number of e-commerce operators and traditional retailers will not be enough to meet future demand for prescription eyeglasses, offering opportunities for new entrants to the sector.
This year's Guangzhou International Optics Fair, held in November, provided a snapshot of the current state of the sector, highlighting the opportunities ahead. One exhibitor, Guangzhou Oriental Vision Chain, for instance, operates some 50 specialised direct-sale chain stores, including outlets in Guangzhou, Shenzhen and Dongguan.
According to a company representative, the business has not been greatly affected by the rise of the e-commerce sector. To maintain market share, the company has imported 6/6 Vision and Near Vision optometry technology from the United Kingdom and the United States respectively.
Similarly looking to maintain a technological advantage was Shanghai Lancia Glasses. Its Rowaski range of rimless glasses is made using diamond-cutting technology. According to Pan Qiang, the company's Sales Representative, the technology can help tackle one of the most common problems with rimless glasses – the likelihood of the lenses coming loose. Compared with traditional screw-based designs, the Rowaski series features a seamless joint, which is said to greatly reduce the problem.
Lancia also designs more than 100 new styles of glasses every year, but only initially releases a small test batch onto the market. Based on feedback from this sample, the company then puts 20 styles into mass production.
Other eyewear companies are building market share by offering value-for-money products and high level of after-care service. One business championing this approach was Glasses Gotook, which has outlets throughout Guangzhou and specialises in selling spectacle frames and lenses for the mass market.
Following an initial eye test, each customer's prescription is accessible at any of the company's outlets, giving consumers considerable flexibility – allowing them, for instance, to choose prescription glasses in one shop and collect them in another.
Apart from high-street optical stores, consumers are also increasingly turning to online vendors. One eyewear company that has adopted the O2O model is Shenzhen-based LOHO, which offers a combination of an online shopping mall and an offline experiential store. It also uses the M2C (manufacturer-to-customer) direct sale model, eliminating third-party intermediaries, which reportedly allows the business to cut costs by up to 85 per cent.
To meet the demand of this huge and rapidly-evolving market, LOHO offers new styles every week and offers refunds on the price difference if a purchaser finds the same glasses cheaper elsewhere within 10 days.
According to the National Vision Care Report, China's first white paper on optical health, in 2015 nearly 500 million mainlanders over the age of five suffer from some form of visual impairment, with about 450 million people affected by myopia. By 2020, the figure is expected to grow by 51 per cent, with some 700 million requiring corrective eyewear.
Guangzhou-based Liangshen, for instance, focuses on the treatment of childhood and teenage myopia and amblyopia, a condition also known as "lazy eye." The business recently partnered with Yanzhixing and is looking to promote the Hong Kong company's range of corrective vision products across the mainland.
According to Zeng Guangsong, a Director of Liangshen, consumers now pay greater attention to eye care and are willing to pay a premium for it.
Yanzhixing works closely with several conventional high-street opticians and targets myopia suffers with an eyeglass prescription in the -0.50 to -3.00 range. Its treatment is said to not only help consumers improve their vision, but provides an additional revenue stream for many optical outlets.
Several outlets offering the Yanzhixing vision-correction service also provide prescription glasses. Even when the correctional treatment is a success, many consumers continue to purchase sunglasses or reading glasses from these shops.
Signing up as a Yanzhixing franchisee costs about Rmb128,000, which covers the cost of the required vision-correction equipment and full training. According to Mr Zeng, some outlets have enjoyed a return on their investment within the first month.
With mainland consumers increasingly seeking personalised products, glasses are now seen as fashion accessories. This has led to consumers developing distinct preferences when it comes to frame styles and lens colour. There has also been greater demand for sunglasses. In some cases, near-sighted consumers wear contact lenses and sunglasses or order custom-made prescription sunglasses.
Capitalising on more stylish customer requirements, Guangzhou Panx Software Development showcased its smart eyeglass virtual sampling system. This allows would-be purchasers to virtually try on a wide range of styles and eyewear colour before purchase.
"For the consumer, this is a whole new shopping experience,” said Cheng Cangbo, the Sales Manager for Panx. “In the case of the outlets themselves, meanwhile, it also offers considerable cost savings. With the different frame styles stored virtually, this cuts down on the display space required, ultimately reducing rental costs.”
For more China market opportunities, please visit: http://research.hktdc.com.