I. Market Overview

China is not just the world's leading manufacturer of spectacles but also the largest potential consumer. Data from Euromonitor reveal that, in 2019, retail sales of spectacles in China increased by 6.1% year?on?year to RMB88.43 billion.

China has one of the highest rates of myopia in the world. 50% of people in China are affected by myopia, significantly higher than the global average of 30%. According to a survey by the National Health Commission, 53.6% of mainland children and adolescents in 2018 suffered from myopia, including 14.5% of children aged six, 36% of primary school students, 71.6% of junior high school students and 81% of senior high school students. This suggests that the market potential for spectacles is huge.

As living standards improve, consumers are becoming more concerned with the health and protection of their eyes when choosing spectacles. As a result, sales of higher quality glasses are increasing. Blue light?blocking spectacles are gaining popularity among office workers who frequently use computers. Consumers are not just showing more interest in the performance of their glasses, they are also becoming more concerned with how they look. The trend towards bespoke, branded spectacles is becoming increasingly evident.

Consumers’ pursuit of greater comfort and individuality, coupled with the increasing specialisation of China’s eyewear industry which is upgrading and building brands, has led to the rise of the custom?made market. These spectacles are designed to meet the particular needs of individual customers. For example, they may come in different shapes to showcase the wearer’s personal style or be designed to fit their facial contours.

Contact lenses

According to Euromonitor, retail sales of contact lenses in China amounted to RMB6.77 billion in 2019, up 7.9% from the previous year. Of these, the growth in retail sales for disposable one?day contact lenses was fastest at 13.5% year?on?year. Of all the contact lenses sold, more than half were extended wear lenses, and their growth in retail sales was 7.3% year?on?year. Many people opt for contact lenses rather than glasses because they are more convenient and comfortable, and are less likely to be damaged, when exercising or playing sports. Coloured contact lenses have become popular in recent years, and some contact lens makers and cosmetics brands have introduced limited edition gift boxes in an effort to make contact lens part of an eye make?up kit.

Presbyopic glasses

Data from the China Statistical Yearbook shows that Chinese society is ageing. In 2018, 41.4% of China’s total population was above the age of 45, and that figure is 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. This is likely to have a negative effect on the sales of ready?made presbyopic glasses.

Sunglasses

The number of people in China buying sunglasses is growing year on year. According to Euromonitor, sunglasses sales in China reached RMB11.58 billion in 2019, an increase of 7.5% from the previous year. Increasing numbers of people are buying these as fashion accessories to accentuate personal styles. Many sunglasses and luxury brands are expanding their eyewear series to stimulate sales even further.

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, the children’s market has become very attractive to the spectacles industry. Blue light?blocking spectacles for children are also becoming increasingly popular with parents who want to protect their children’s eyes. The spread of smartphones and electronic devices in China has led to almost 67% of children aged six or under coming into contact with electronic products since the age of four and becoming routinely exposed to the blue light emitted from these devices.

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. The Mix Reality app developed by Microsoft combines virtual reality (VR) and augmented reality (AR) to integrate images with the physical world, and allow users to manipulate holograms using gestures. China’s smart glasses market is growing gradually, with Huawei launching the world’s first smart glasses supporting NFC wireless charging. Users can take incoming phone calls and listen to music without putting anything in their ears by connecting their smart glasses with mobile phones.

China's imports of spectacles and related products in 2019

II. Market Competition

Geographically, spectacles manufacturers in China are 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 reasonably complete supply chains and have developed the industry to a considerable size.

Danyang in Jiangsu is considered China’s main spectacles production base. There are close to 2,600 business enterprises in the city involved in manufacturing spectacles and related products. The city’s output of eyeglass frames accounts for roughly one?third of China’s total, while its optical and glass lenses are reported to account for 75% of China’s total and 45% of the world’s total. The whole supply chain from raw materials and design to retail sales and delivery can be found in the city. The largest spectacles trading market in China is the China (Danyang) International Optical Centre. It is a commercial complex with a floor area of 110,000 square metres that offers leisure, entertainment and offices, as well as film and TV studios, all under one roof. It is very different from the single?trade business model of traditional eyewear markets.

The Danyang Economic Development Zone, together with Wangku Group of Beijing, has established the China Optical Industry E-Commerce Trading Platform. Using big data provided by Wangku, the platform helps companies carry out activities like data sharing and credit verification, in an attempt to boost e?commerce in the optical industry and make it more innovative and professional.

Mayu Town in Ruian, Wenzhou City, Zhejiang, is known as the “town of glasses”. It is a major eyewear centre, home to nearly 160 manufacturers, which employ about 10,000 people. The Innovation and Service Platform for Optical Industry and the Start-up Park for Small and Micro-sized Optical Businesses have opened in the town and, according to reports, already has its manufacturers in residence. With a gross area of around 140,000 square metres, 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. After 30 years of development, the city is now one of the mainland’s major centres with a worldwide reputation for the production of mid?market to upmarket branded spectacles. Henggang is now home to 676 spectacles companies, of which 495 are manufacturers, and the town has a total annual output of more than 125 million pairs. Henggang is an important export centre in China. It has also become a national demonstration zone for fashionable and branded spectacles. Businesses there do not just undertake OEM production for international luxury optical brands, they have introduced technological innovation, research and development, packaging and strategic planning for their own brands. 52 spectacle production enterprises in Henggang now produce some 63 self?owned brands. Annually, Henggang registers about 800 utility model patents and 40 invention patents. “Henggang Spectacles” has also been registered as a collective mark.

Market share in China for optical brands is quite diffuse. According to Euromonitor, the top 10 brands commanded a combined market share of just 16.5% in 2019. In contrast, the corresponding figure for contact lenses brands was 41.7%. Major contact lens manufacturers or brands like Johnson & Johnson, Ciba Vision and Bausch+Lomb have all entered the China market. According to industry sources, good quality, high technology content and complete product lines are the major strengths of these imported brands.

Domestic spectacles manufacturers are becoming more aware of the importance of branding and technology in their products and have started their own 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 all been granted the status of ‘Famous Trademark of China’ by the Trademark Office of the now?defunct State Administration for Industry and Commerce.

Of the countries and territories from which China imported optical products (HS 9003 and HS 9004)* in 2019, Italy was by far the most important, accounting for more than half the value of all such imports.

*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

Traditionally, optical products in China have been sold through wholesale markets. Every big city has a wholesale market. Some of these specialised markets are mainly for domestic sales (such as the Danyang Glasses City in Jiangsu), while others 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 the shop, saving time and increasing convenience for the customer. These shops are moving towards becoming chains. GBV (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 utilises artificial intelligence to improve its sales and services, supplying its frontline salespeople with customer data, such as spending habits, optical records and eye health, for example.

The growing importance of post?90s generation consumers has led many companies to make the development of their online business a priority. 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. Euromonitor data shows that online sales accounted for 12.2% (RMB10.7 billion) of total optical sales in 2019.

The O2O (online?to?offline) e?commerce model, which combines offline experience and online purchase, is gaining ground in China’s spectacles market. However, the way the model is used varies from company to company. A typical O2O model allows consumers to buy spectacle frames online while taking optometry tests and fitting prescription glasses in a store. An example of this is the Yichao site. Another O2O model is the collaboration of network giants and traditional retailers, such as the partnership agreement between Dianping.com and Baodao Optical.

Some of the optical fairs lined up for 2020 and 2021 are listed below:

IV. Import and Trade Regulations

In order to further open up the economy and satisfy consumer demand, China’s State Council cut most?favoured?nation (MFN) tariffs on 1,449 taxable items of daily consumer goods, including spectacles, from 1 July 2018.

Import tariffs of selected optical products in 2019:

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 final sale. Producers must obtain a medical device production enterprise licence, while dealers should have a medical device dealer licence.

The National Central Product Classification - Product Category Core Metadata Part 12: Glasses (GB/T 37600.12-2018) came into effect on 1 April 2019. This set of standards applies to the description, coding, database building, query and release of product information for frame glasses , and describes a unified modelling language and dictionary for the core metadata of glasses.

Beginning 1 March 2020, Spectacle Frames—Measuring System and Terminology (GB/T 38004?2019), Spectacle Lenses—Fundamental Requirements for Uncut Finished Lenses (GB/T 38005?2019) and Assembled Spectacles—Part 3: Single-vision Near-vision Spectacles (GB/T 13511.3?2019) have adopted the international standards ISO 8624: 2011, ISO 14889: 2013 and ISO 16034: 2002 respectively.

Technical Requirements on Application of Light Health and Light Safety of Coating for Protection Against Blue Light (GB/T 38120?2019) came into effect on 1 July 2020. This standard specifies the classification, requirements and testing methods for blue light protective films used in optical lens products. For wavelengths below 445 nm, the light transmittance rate of such spectacles has to be less than 80%, while for wavelengths above 445 nm, the light transmittance rate must be higher than 80%.

Spectacle Frames—General Requirements and Test Methods (GB/T 14214?2019), which was promulgated on 31 December 2019, will be implemented beginning 1 January 2022. This standard will replace the 2003 version (GB/T 14214?2003), and will adopt the international standard ISO 12870: 2016.