China’s Spectacles Market
15 August 2018
I. Market Overview
China is not just the world's leading manufacturer of spectacles but also the largest potential consumer. According to Euromonitor estimates, retail sales of spectacles in China increased by 5.8% to RMB69.9 billion in 2017. Sales of sunglasses showed the fastest growth, registering a 6.8% year-on-year increase.
According to a World Health Organisation report, China has 600 million people with myopia, accounting for nearly half the population. The rate of myopia occurrence exceeds 70% in senior high schools and universities and approaches 50% in primary schools. China has one of the highest myopia rates in the world, suggesting the spectacles market potential is huge.
As living standards improve, consumers are attaching greater importance to the health and protection of their eyes when choosing spectacles, and increasing numbers of people are buying glasses of higher quality. Consumers are paying greater attention to glasses’ aesthetic qualities in addition to practical functions. The trend to buy bespoke, branded spectacles is increasingly evident, however, market projections suggest that as more consumers become aware of mid-range spectacle brands, the sales of these brands may surpass upmarket labels.
Consumers’ pursuit of greater comfort and individuality and the on-going specialisation of China’s eyewear industry have led to the rise of the custom-made market. This is seen as the direction for the industry’s development towards upgrading and brand-building. Custom-made spectacles are individually designed to meet the different needs of customers. They are, for example, made in different shapes to showcase personal style or designed to fit the wearer’s facial contours.
Contact lenses: Euromonitor data shows that consumer spending on contact lenses in China increased at an average annual rate of 7.2% to about RMB4.68 billion in 2017. Retail sales are expected to increase by 6.7% annually over the next five years to reach RMB6.48 billion by 2022, underscoring the potential for further growth in the market. As an increasing number of contact lens consumers want convenience and hygiene, it is expected that sales of disposable one-day contact lenses will have a higher rate of growth than traditional lenses.
Presbyopic glasses: Statistics show that China is facing the prospect of an aging population. Approximately 33% of China’s total population was aged 45 and above in 2016, with the figure expected to reach 44% by 2030. Since consumers in this age group have higher spending power and are less price-sensitive, they are more inclined to buy prescription glasses than ready-made spectacles to correct their vision. This will have a negative effect on the sales of ready-made presbyopic glasses.
Sunglasses: The penetration rate of sunglasses is growing year to year in China. According to Euromonitor, sunglasses sales in China increased from RMB7.1 billion in 2012 to RMB10 billion in 2017, representing an annual compound growth rate of 7.1%. Increasing numbers of people are buying sunglasses as fashion accessories to project their personal image. Many sunglasses brands and luxury brands are expanding their sunglasses series to further stimulate sales.
Children's spectacles: With more young children being diagnosed as myopic and with more parents willing to pay for high-quality glasses for their offspring, children have become a highly coveted market segment for the spectacles industry. Also, the spread of smartphones and electronic devices in China has led to almost 67% of children aged six or under, mainly at the age of four, coming into contact with electronic products. With young children – whose eyes have not fully developed – becoming routinely exposed to the blue light emitted from these devices, blue light-blocking spectacles have become popular with many parents who want better protection for their children’s eyes.
Growing trend for smart glasses: Smart glasses are wearable computer glasses with an independent operating system that allows users to install applications and choose services. They support voice or motion sensors through wireless connectivity. Google Glass “Enterprise Edition”, which targets the corporate market, is an example, with over 50 big companies, including DHL, Boeing and Volkswagen, using the device.
China’s smart glasses market is growing gradually, with virtual reality (VR) and augmented reality (AR) technologies increasingly used. For example, Lenovo unveiled its new Lenovo Glass C200 in 2018 which uses artificial intelligence (AI) to identify objects in the real world. Users see the virtual world with one eye and see AR images of the real world with the other eye. The new Glass C220 applies to a variety of work and learning scenarios, allowing users to gather information in their field of vision.
China's imports of spectacles and related products in 2017:
|HS Code||Description|| 2017|
|90014091||Sunglasses lenses of glass||5.9||-41.5|
|90014099||Other spectacle lenses of glass (except photochromic and sunglasses lenses)||1.9||-10.4|
|90015010||Photochromic spectacle lenses of other materials||43.4||19.5|
|90015091||Sunglasses lenses of other materials||189.2||197.5|
|90015099||Other spectacle lenses of other materials (except photochromic and sunglasses lenses)||196.9||5.2|
|90031100||Plastic frames & mountings for spectacles||82.4||-3.7|
|900319||Frames & mountings of other materials (including products from endangered animals and non-plastic materials)||75.0||29.0|
|90039000||Parts for frames & mountings for spectacles||52.9||-4.3|
|90049090||Other spectacles (except sunglasses and photochromic spectacles)||33.2||-16.2|
Source: Global Trade Atlas
II. Market Competition
Geographically, spectacles manufacturers in China are relatively highly concentrated, being mainly found in Dongguan and Shenzhen in Guangdong, Xiamen in Fujian, Wenzhou in Zhejiang and Danyang in Jiangsu. These four clusters all have fairly complete supply chains and have developed the industry into a considerable size.
Danyang in Jiangsu is considered China’s main spectacles production base. There are close to 1,000 spectacles manufacturing enterprises in the city, with output accounting for over 70% of the national total and over 30% of the world total, making it the world’s largest spectacles production base. With a floor area of 110,000 square metres, the China (Danyang) International Glasses City is an experience-oriented tourism services commercial complex that offers leisure, entertainment and offices, as well as film and TV performances, all under one roof. It is the largest spectacles trading market in China and represents a break from the single-trade business model of traditional eyewear markets.
The Danyang Economic Development Zone, together with Beijing Wangku, has established the China Optical Industry E-Commerce Trading Platform. Using big data provided by Wangku, this platform helps companies in data sharing, credit certification and other matters in a bid to raise the level of e-commerce in the optical industry and guide its development towards innovation and professionalism.
Mayu Town in Ruian, Wenzhou City, Zhejiang, is known as the “town of glasses”. It is a major eyewear production base and home to nearly 160 spectacles producers, with some 10,000 employees. The first group of spectacles manufacturing enterprises have reportedly moved into the Innovation and Service Platform for Optical Industry and Start-up Park for Small and Micro-sized Optical Businesses in the town. With a gross area of around 210 mu (140,000 sq m), the park will provide production sites and services like brand planning, warehousing and logistics, product promotion and e-commerce.
Shenzhen's Henggang owes its development to the relocation of Hong Kong's spectacles industry. The city is now one of China’s major spectacles production bases with a worldwide reputation for its production of mid- to upmarket branded spectacles. At the end of 2016, Henggang had over 500 enterprises engaging in the production and sales of spectacles, with total annual output exceeding 125 million pairs. It now produces 80% of the world’s high-end spectacle frames, including plastic, gold-plated and titanium, and 85% of these are for export. This makes it an important spectacles export base in China.
Optical enterprises in Henggang have been adjusting their business models and concepts in recent years to achieve industrial transformation and upgrade. They are no longer confined to OEM production for international luxury optical brands but go further to create and build their own brands through technological innovations, research and development, proper packaging and strategic planning. Successful examples include Huaqiang (華強眼鏡)’s private label P+US (派士) and Kadin Optical (鎧迪眼鏡)’s Faka Wood (珐卡木).
Market share for optical brands is quite scattered in China. According to Euromonitor estimates, the top 10 brands commanded a combined market share of only about 14.5% in 2017. However, market share is more concentrated for contact lenses, with the seven leading brands controlling 34% of the market in July 2017. Major contact lens manufacturers or brands like Johnson & Johnson, Ciba Vision and Bausch+Lomb have all entered the China market. An industry source noted that good quality, high technology content and complete product lines are the major strengths of imported brands.
Domestic spectacles manufacturers are becoming more aware of the importance of branding and technology in their products and have started embarking on research and development and brand building. As a result, Wanxin (萬新), Porpoise (海豚), Wuliangcai (吳良材), Mingyue (明月), GBV (大光明) and BEST (寶視達) have been granted the title of "Famous Trademark of China" by the Trademark Office of the now-defunct State Administration for Industry and Commerce.
Statistics on the countries and territories from which China imported optical products (HS 9003 and HS 9004) in 2017 show that Italy is the largest source.
|Country or territory||2017|
|Share of total|
Source: Global Trade Atlas
*HS 9003: Frames and mountings for spectacles, goggles and the likes as well as their parts.
HS 9004: Spectacles, goggles and the likes, including sunglasses and photochromic lenses, for corrective, protective and other purposes.
III. Sales Channels
Wholesale markets are traditional channels for the marketing of optical products in China, with such markets in every big city. Some of these specialised markets are mainly for domestic sales (such as the Danyang Glasses City in Jiangsu), while some are for export (such as the Guangzhou Glasses City). There are also markets that cater to both.
The four main types of retail outlets selling eyewear on the mainland are branded chains, professional ophthalmic medical care institutions, bargain supermarkets for fashionable eyewear, and traditional optical shops.
Optical shops with an optometrist on site first appeared in China in the early 1990s. Customers can get prescription glasses after an eye test at these shops, saving time and increasing convenience. These shops are developing in the direction of chain operation. Daguangming (大光明), Oriental Vision (東方), Red Star Optical (紅星), Mao Chang Glasses (茂昌), Baodao Optical (寶島) and LensCrafters (亮視點) are some of the more successful chains. Baodao uses artificial intelligence to improve its sales and services, using this technology to inform frontline salespeople of customer data, such as spending habits, optical records and eye health, for example.
The rapid rise of the post-90s generation consumer has made the development of online business a priority for many companies. Eyewear e-tailers like Sigo (視客), Yichao (億超) and Kede (可得) have emerged in recent years. Online sales of optical products, especially contact lenses and sunglasses, are likely to become increasingly popular in the near future. Euromonitor data shows that online sales accounted for 7.2% of total optical sales in 2017.
The O2O (online-to-offline) e-commerce model, which combines offline experience and online trading, is gaining ground in China’s spectacles market. However, the way the model is used varies from company to company. A typical O2O model in the spectacles market allows consumers to purchase spectacle frames online at discounted prices while taking optometry tests and fitting prescription glasses in a physical store. An example is the www.kede.com site of Shanghai’s Kede Optics Technology Co. Another O2O model is the collaboration of network giants and traditional retailers, such as the partnership agreement between Dianping.com and Baodao Optical.
The following are some of the optical fairs lined up for 2018 and 2019:
|10-12 Sep 2018||China International Optics Fair||China International Exhibition Center (Old Hall), Beijing|
|3-5 Nov 2018||Guangzhou International Optics Fair||Poly World Trade Expo, Guangzhou|
|21-23 Feb 2019||China (Shanghai) International Optics Fair||Shanghai World Expo Exhibition and Convention Center|
|10-12 May 2019||China (Wenzhou) International Optics Fair||Wenzhou International Exhibition and Convention Center|
IV. Import and Trade Regulations
Foreign companies considering venturing into China's spectacles market should pay attention to the relevant mainland standards. An example of these standards is Spectacle Frames - General Requirements and Test Methods (GB/T 14214-2003). For details of the standards, see www.standardcn.com and the website of the Standardisation Administration of China (SAC).
The General Administration of Quality Supervision, Inspection and Quarantine announced the Administrative Measures on Metrological Supervision of Spectacles on 15 October 2003, detailing the regulations that dispensing opticians must comply with, as well as the relevant penalties.
The SAC promulgated the national standard Ophthalmic Optics and Instruments - Optical Devices for Enhancing Low Vision (GB 23719-2009) on 6 May 2009. This set of standards lays down the optical and mechanical requirements for optical devices for enhancing low vision, as well as the test methods.
According to the newly amended Regulations on the Supervision and Management of Medical Devices, which has been in force since 1 June 2014, contact lenses are classified as Category III medical devices, which must pass safety and effectiveness assessments and be issued with a medical device registration certificate prior to production, distribution and consumption by end-users. Producers of such devices must obtain a medical device production enterprise licence, while dealers should have a medical device dealer licence.
The State Council cut Most-Favoured Nation (MFN) tariffs for 1,449 taxable items of daily consumer goods starting from 1 July 2018 to further expand opening-up and satisfy consumer demand. The goods include apparel, footwear and headgear, cosmetics and kitchen supplies.
Import tariffs of selected optical products in 2018:
|90014010||Photochromic spectacle lenses of glass||7|
|90014091||Sunglasses lenses of glass||7|
|90014099||Other spectacle lenses of glass (except photochromic and sunglasses lenses)||7|
|90015010||Photochromic spectacle lenses of other materials||7|
|90015091||Sunglasses lenses of other materials||7|
|90015099||Other spectacle lenses of other materials (except photochromic and sunglasses lenses)||7|
|90031100||Plastic frames & mountings for spectacles||7|
|90031910||Metal frames & mountings for spectacles||7|
|90031920||Natural material frames & mountings for spectacles |
|90049090||Other spectacles (except sunglasses and photochromic spectacles)||7|
Source: Table of Adjusted MFN Rates on Imported Daily Consumer Goods published by the Ministry of Finance in 2018