Struggling, new life and broken walls in the optical industry

"In our school, there are no more than 20 people in my class. I will come to see you." Wang Shu, a security guard at Shenzhen Elementary School, said to the author: "When you go to school in the morning, the black frame and heavy weight at the entrance of the school. Schoolbags, the current children can be distressed.” On the desk of the security room, in addition to several copies of the Romance of the Three Kingdoms and the Visitors’ Register, there is also a glasses case with the words being unclear.

According to the "China Compulsory Education Quality Test Report" released by the Ministry of Education on July 25, 2018, the problem of poor eyesight among Chinese students is outstanding. The detection rate of visual acuity in fourth-grade primary school students has reached 36.5%, and the myopia rate of junior high school students and high school students has exceeded 70%. The myopia rate of adolescents has remained high. According to conservative estimates, by 2020, the number of people with myopia in China will be close to 700 million. The huge demand makes the Chinese optical industry market huge.

Six months ago, Yiou had interviewed Ma Jintong, the founder of IVision. He believes that although the official data shows that the size of the glasses market is around 80 billion, with an average annual growth of more than 10%, the industry knows that the real market size has exceeded 100 billion yuan.

The eyes are the windows of the soul, and they become glasses when placed on people with myopia. In the past, people used glasses as treasures, a thousand pieces and a cumbersome optician process, which made the glasses not easily replaced.

Seeking a guarantee, the old manufacturers are hard to take the lead

Talking about the leader in the glasses industry, I usually think of Baodao glasses and doctor glasses. Dr. Glasses is the "first stock in the optical industry", but the industry has been raging because of its prospectus. The public offering of Dr. Glasses clearly marked the company's purchase unit cost, frame 89.06 yuan, lens 28.82 yuan, sunglasses 141.75 yuan, contact lens 48.82 yuan, behind the glasses thousands of dollars actually turned out to be such a low cost. Dr. glasses have a gross profit margin of over 70%, and such profiteering has made the glasses industry a hot topic.

Doctor's glasses prospectus

Doctor's glasses prospectus

However, the glasses industry is not as good as it seems, and high gross profit margins do not represent high net profit. The author reviewed the 2017 annual report released by Dr. Glasses. In 2017, the operating income of Dr. Glasses was 471 million yuan, and the gross profit margin was 76.47%. However, the net profit of 0.46 billion yuan accounted for less than 10%, which is quite dazzling.

Where was the money spent?

The author found in the annual report that the highest cost of doctoral glasses lies in sales expenses. In 2017, the sales cost was as high as 250 million yuan, an increase of 11.41%. Dr. Glasses explained in the earnings report: This is due to the increase in labor and rent. Behind the low net profit of the optical industry, it is actually characterized by high labor, high rent and low purchase frequency in the optical industry. The author observed that a mature optical shop needs 5-6 employees, of which at least 1-2 optometrists are required. The author is directly searching for 58 cities and bosses. Hiring an optometrist with 1-3 years of experience requires at least 8k-10k/month salary, and the optical shop has very high requirements for site selection. In order to solve the problem of low purchase frequency, it is necessary to ensure that it is in a place with high flow of people, so the general optical shop will be located in the prosperous area such as shopping malls and subways. This means that labor and rent are expensive. Looking closely, the South China region with the highest efficiency of doctors' glasses is only 13,000, and the northeast region with the lowest efficiency is only 4,000.

Doctor Optical Shop

What's interesting is that we can find from a certain point of the doctor's glasses that the glasses industry may not really make money.

In 2017, Dr. Eyewear was listed, raising funds of 210 million yuan. It is planned to invest in “Marketing Service Platform Construction Project” and “Informationization Construction Project” for the rapid expansion of the Group's business. In the 2018 year, the company opened 90 stores nationwide. The author reviewed the 2018 semi-annual report and found that by June 2018, there were 18 new doctors opened in the glasses, only one-fifth of the target. So far, the company has invested a total of 44.38 million yuan in fundraising projects, and invested a total of 9.2 million yuan in the half year of 2018.

So what other money is used for?

The answer is: bank management. In July of 2017, Dr. Optics held a board meeting to deliberate and approve the “Proposal on the use of some idle raised funds to purchase capital-guaranteed wealth management products”, and approved it in August 2017 through the shareholders' meeting, agreeing to use no more than 130 million. Idle funds are raised to purchase guaranteed-type wealth management products. As of June 30, 2018, the amount of wealth management products purchased was 105 million yuan. It took only 4 months since the meeting time was held until the funds were raised.

According to the latest data released by Dr. Glasses in 2018, the net profit in 2018 was 57 million to 62 million yuan, up 9.2%-18.8%. The income from bank wealth management is about 8.9 million yuan (Note: January-September investment income is 6.68 million yuan, monthly average income is about 740,000 yuan, no loss is considered.), from government subsidies 6.34 million yuan, both 15.24 million yuan, at least 20% of the total profit.

"guarantee this" financial management, the glasses industry is not very good.

 Admission of fast fashion glasses

As people's consumption upgrades, income increases, and glasses become more and more a necessity in life, glasses in different scenes, glasses with different functions, glasses with different price points, one person has many pairs of glasses slowly become a new trend, while Many new opportunities have also emerged.

Li Wei, who had been wearing glasses for nearly ten years, suddenly found that the glasses of the classmates in the class changed hard, and some even wore "fake glasses" (no glasses, only frames). "I don't understand, I waste money, I don't feel good about wearing glasses." This was Li Wei's view of classmates at that time. "At that time, I didn't expect that glasses could become a fashion." After graduating from college, Li Wei's attitude changed. "The handsome is 360 degrees without a dead end." He told the author.

In large shopping malls, there are always a few optical shops with distinctive decoration styles, and their products are fashionable and the prices are relatively close to the people. Stylish design, an open shopping environment and cheaper prices often attract young people to try and buy. The fast fashion that has just prevailed in China has given new inspiration to the optical industry. From the tool that assists vision to the fashion accessory, the function of the glasses has changed. Fashion glasses have taken the ride of consumption upgrades, the industry has developed rapidly, and a number of glasses brands that focus on fast fashion have emerged.

The author visited the wooden ninety-six shops in Shenzhen's Vientiane City and found that he invested a lot of effort in the design of the store. With the model of the spaceman, the surrounding decoration is mainly three-dimensional and white, and the background is a crater. Strong sense of technology and fashion. The author found that the price of glasses frames in the 90-story shop is basically between 299 yuan and 899 yuan. Even the fashion glasses frame that has been on New York Fashion Week is only 899 yuan, which is thousands of times compared with the glasses and doctor glasses. The glasses frame is indeed a lot cheaper. And the number of glasses frames is up to 200, far higher than the traditional glasses industry. But the author asked the clerk to find that the lens is not cheap. There are cheap lens choices in physical stores, but less, the clerk will generally recommend ZEISS lenses, the lowest price of anti-blue light lenses should be more than 2,000 yuan, which is already a cheaper choice.

Wooden ninety stores

At the same time, the author visited the aojo and LOHO glasses in the Vientiane City. The decoration is very prominent. The floor space is basically 30-40 square meters, and the price is also below 1,000 yuan. I found that most of the customers are bought together by couples, and the frequency of choosing sunglasses is higher.

The author asked Xu Ming, who is buying wood ninety, Xu Ming told the author: "I bought wood ninety is mainly to look at his design and material, I prefer wooden frames, looks very textured and most occasions Applicable.” Lin Fei also said: “The style of glasses here is very much. I often come over and try on it. Occasionally I can find myself especially like it. The favorite is its glasses case, which is very design.” It looks like People's acceptance of fast fashion glasses is very high.

Take Mujiujiu as an example. Since its establishment in 2010, it has already had more than 800 stores. It plans to expand the number of stores to 1,200 in 2021, with sales exceeding 2 billion. LOHO glasses also have more than 300 stores and more than 500 million yuan in revenue.

Fashion glasses companies can develop so quickly, in addition to grasping the minds of consumers. It is more controllable in terms of cost. Although the location of the wooden ninety stores is generally located in the shopping center, but the small area is generally controlled at 30-40 square meters, and some even built in the middle of the road in the mall. This greatly reduces the rental expenses of the store.

In terms of labor costs, the author observed that the store staff of the wood ninety, aojo and other shops are basically only 2-3 people, and they have several positions, both as a clerk and a light meter. It is worth mentioning that fashion glasses brands are also returning to the heavy asset model. Years of operation have made them understand that the trial and optometry of offline stores is essential, and the expansion of omnichannel is the way to the future.

On the supply side, fashion glasses companies have also improved. It turns out that the products of the traditional glasses industry are old-fashioned, the price is not cheap, and the speed of production is surprisingly slow. Li Ming, the founder of Yinmi glasses, pointed out that the supply and demand relationship in the traditional glasses industry is wrong. The brand determines the quantity of goods supplied rather than actually starting from the customer. This causes the goods that are sold to be out of stock and not sold at all. The backlog of stocks is serious. Fashion glasses, from the perspective of consumers' decision-making, use big data to analyze which products are popular products, customized according to demand, and will not produce a large number of product backlogs.

Fashion glasses companies will also use the brand, such as the brand concept of “more than glasses”, and build a fan base around this concept, using fan marketing to expand brand influence.

It is worth mentioning that when the author asked the ninth clerk how to optometry, he said to the author: "I will give you optometry, soon enough." Then I took the author into the cubicle, there is only one machine in the compartment. The author's question is that if there are more than a dozen processes in the regular hospital with glasses, the time is up to 2 hours, can such a machine get accurate data? The author asked the clerk about this question. The clerk just kept telling the author that the machine is high-tech and he is professional.

Fashion is attributed to fashion and professional to professional. The rapid growth of fast fashion optical shops has also brought about sequelae. "China Optical Technology Magazine" pointed out that the number of professionals is small, professional training can not keep up, personnel mobility is high, and low pay is the pain point of the current development of the optical industry. Especially after the after-sales service, fashion glasses brands are being tested. The author found that there is also a special evaluation of the fashion glasses brand, and Tucao has no after-sales service. For fast fashion brands, how to ensure quality and after-sales service is the focus of the next work.

Industries such as glasses are both commercial and medical. How to accurately grasp the rhythm and depth of commerciality, how to ensure effective medical care and services? It is worthwhile for business owners to think hard.

The next direction of the glasses industry

Baodao glasses, known as the evergreen tree, announced a major event last year. Xingchuang Vision (Baodao Glasses) announced that it will use AI medical technology to enter the field of big health. In July 2018, Xingchuang Vision and Airodc jointly released the AI fundus camera, which has a screening rate of 35 common diseases with an accuracy rate of 97%. This equipment has been installed in more than 200 stores in the first-tier cities.

Baodao glasses enter the medical

A glasses company that is not artificial intelligence wants to enter the AI medical track, which sounds too crossover. Wang Zhimin, chairman of Baodao Glasses, gave his explanation. After so long development of the optical industry, the added value of the product manufacturing process is getting lower and lower, and the research and development links before the product and the sales after the product become new additions. The point of growth of the value. Wang Zhimin believes that the essence of the optical industry is about eye vision, and the essence of eye vision is medical service.

A healthy logo for the eye, the optometrist can judge the individual's disease by photographing the fundus fundus photo, but a photo that an optometrist can handle in one day is limited, and the accuracy of the disease screening is difficult to grasp and expensive. However, AI and big data have given the optical industry a chance to develop a fundus screening. Baodao glasses has more than 1,200 stores. This is a very suitable scene for medical screening services when measuring glasses. Since 2016, Wang Zhimin has continuously added the fundus photo samples and algorithms. The AI algorithm can do the same work as the optometrists, and the accuracy is getting higher with the increase of the sample. In the future, Wang Zhimin will build more than 1,200 Baodao glasses into “medical pre-location warehouses and even the country's largest disease screening center.”

Through AI and big data technology, it creates the possibility of medical screening, and then relies on the store to create medical screening scenarios, empowers eyewear health products through the scene, and finally products and services to increase consumer loyalty, expand consumer groups, and increase data. Come back to AI and big data. Baodao glasses are gradually forming their own industry closed loop.

In addition, the current AR glasses, such as Google glasses, AR technology has gradually matured, and has already become more prominent in the enterprise and medical fields and has been further expanded by the 5G era. Bose's launch of the AR-enabled sunglasses "Bose Frames" has been fully opened to users. The sunglasses with built-in micro-speakers and microphones are priced at about 1,373 yuan, and the price is quite attractive. In addition to the technology, such as the butler service model, the glasses of the glasses have been awarded more than 300 million yuan. The light luxury representative of the glasses industry represents coterie, chooses the benchmark Italian eyewear group Luxottica, seizes the domestic light luxury glasses market, etc...

The glasses industry is undergoing transformation and upgrading. Among them, Baodao, Ph.D., Mujiujiu, LOHO, and Mafu seem to be walking a different path. Everyone is crossing the river by feeling the stones.

There are no shortcuts in the eyewear industry.

(Wen Wang, Li Wei, Lin Fei, Xu Ming are all pseudonyms)