Research: A pair of glasses industry chain research

In June 2018, the data released by the National Health and Health Commission showed that the total number of myopia in China has exceeded 450 million. In the United States, the proportion of myopia has almost doubled from 25% at the end of the last century to nearly 50% today. According to scientists' predictions, by 2050, the number of myopia in the world will exceed 4.7 billion, accounting for more than half.

The glasses industry is still running on the huge demographic track. In the era of more and more information reading needs, the gradual e-learning of consumers, and the rise of consumers' personalization, glasses have gradually changed from a tool product to a real fashion consumer.

In addition to frame glasses, contact lenses, beauty, sunglasses, nursing tools, etc., it is difficult for you to find even one friend who is not in contact with these keywords.

This is the best consumer product, a little bit of penetration into everyone's life.

Therefore, we have a deep insight into the current Chinese optical market, and analyze how the old and new generations “have sung me on stage” in this multi-category and low-brand industry.

At the same time, when product tonality, trend genes, and technological elements transcend product performance itself and become the key word in the eyewear industry, this is also the best time. Let us settle down and retaliate, from the bottom of the industry chain. Start with the status quo and re-recognize this industry full of imagination.

1. Analysis of the degree of competition in the domestic market

Market concentration

In China, eyewear products are not medical devices, and the industry's entry barriers are low. There are more than 4,000 eyewear manufacturers including lens companies, but the scale is generally small, the market share is low, and the industry is in perfect competition. According to the scale of production, according to Euromonitor, the market share of the top ten major eyewear brands in the Chinese market in 2016 is about 22%.

Relatively speaking, the market share of contact lenses is relatively concentrated. In 2016, the main domestic 7 brands have occupied 84% of the market. International contact lens manufacturers (such as Johnson & Johnson, Vision, Bausch & Lomb, etc.) have fully entered the Chinese market, and international brands have obvious advantages in terms of product quality, technical content and product system layout.

It is undeniable that there are fewer large-scale leading enterprises in the optical industry with a relatively high market share. In a completely competitive market atmosphere, there must be problems such as disorderly competition, irregular operation, and brand awareness. The overall market is in a standardized and large-scale manner. In the process of development.

Industry pattern

The phenomenon of industrial clusters in many industries in the Chinese market is very obvious, and the optical industry is no exception. At present, under the background of scattered industry concentration, many small and medium-sized production enterprises and their supporting manufacturers have gathered in a certain area to form industrial clusters, which has greatly reduced production costs. This also makes Chinese optical glasses manufacturers have obvious cost advantages in the international arena. Taking the lens manufacturing industry as an example, the industrial pattern with Jiangyanyang, Zhejiang Wenzhou, Xiamen, Xiamen and Shanghai as the main production bases has been formed.

At present, the top optical sales chain companies are Baodao Glasses, Ph.D. Glasses, Daming Glasses, Oriental Glasses, Shanghai Sanlian Group (which has two well-known brands such as Wu Liangcai and Maochang).

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Channel construction

At present, the main sales terminals of the domestic optical industry include large traditional commercial chain stores, optician centers with hospital ophthalmology as the background, and wholesale and retail enterprises.

The optical shop directly faces individual consumers and is one of the most grounded channels. At present, the total number of optical shops in the country has reached more than 23,000. If the chain stores are included, the estimated total is about 31,000. In terms of quantity, there are a large number of optical retail stores in China.

Among these terminal channels, the low-end glasses retail market is highly competitive in price, which is closer to the fully competitive market. In the mid-to-high-end optical retail market, large-scale optical retail chains can provide professional fitting services, high-end optical products, and quality shopping. The environment meets the diversified and fashionable optician needs of consumers, so it has a competitive advantage and has great potential for market development.

Second, the eye market product structure

Product Categories

From the perspective of product structure, the glasses products in the glasses retail market are mainly composed of frames, lenses, sunglasses, reading glasses, contact lenses and contact lens care solutions. At present, the market share of frames and lenses in China's optical retail market is the highest, at 39.48% and 37.09% respectively.

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Source: Canadian Capital is organized according to public information

Product development trend

According to data released by GfK China, the changes in the global optical glasses product structure can be summarized as follows:

1. Optical lenses maintain continuous growth and increase significantly.

2. The category of frames remains unchanged.

3. Contact lenses grow steadily.

4, the care solution products show a downward trend due to the impact of contact lens short-cycle products

5. Sunglasses have seen a marked decline in sales.

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From the perspective of the Chinese optical market, with the popularity of daily-spraying white films, the growing awareness of astigmatic contact lenses, and the upgrading of color-chip products, contact lenses and care liquids have led the Chinese eyewear market.

According to JF Kai estimates, in the first half of 2016, offline sales of daily disposable contact lenses increased by 27% year-on-year, accounting for 23% of the contact lens market share; functional contact lenses accounted for 6% of the offline market share. It rose by 31% year-on-year.

At the same time, sales of contact lens care solutions will accompany the growth of contact lenses, ushered in a rapid rise. Judging from the changes in the distribution of various categories in the world, although the traditional spectacle lenses still occupy an absolute advantage and dominance, considering the proportion of the Chinese contact lens market in the total category of 6%, compared with the market size ratio of 9% in the global market, China The contact lens market still has a large upside.

When shopping on weekends, you find that there are more and more trendy optical shops in the mall. The prices of these stores range from 499-999. The price ranges are various, and it is generally "right to wait." Go to the next-door net red drink shop to buy a cup of tea, your exclusive glasses have been completed.

Value chain analysis of glasses

Although the gross profit of the glasses retail industry is as high as 70%, the net interest rate is not even 10%. The root cause of this phenomenon lies in the high cost of rent and operating costs of offline optical shops.

According to the 2016 prospectus of Dr. Glasses (300622.SZ), the average purchase price of a lens of the company is 28.82 yuan, and a frame is 89.06 yuan. From the perspective of materials, the cost of a pair of ordinary glasses may be less than 200 yuan. .

However, the share of the store rental fee (including water and electricity) and employee compensation and welfare (store manager, optometrist and salesperson) accounted for about 27.3% and 25.4% of the price of the glasses, respectively. Mainly used to provide shopping guide and optometry services.

It can be seen that the operating costs and expenses of the stores and labor costs in the field of glasses circulation have greatly increased the cost and final price of the glasses retail.

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3. Industry chain status of the glasses industry

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Upstream: raw material production

From the upstream point of view, commonly used lens materials are: Colombian resin (CR39), glass, crystal stone, plastic (usually used as swimming goggles), etc., of which CR39 is the most common, that is, conventional resin lens.

Common frame materials are: sheet, plastic (injection frame), TR (TR90, TP100), pure titanium (Pu-T), titanium alloy (TITAN), other metal frames (copper, iron, aluminum, etc., with aluminum The frame is excellent), other alloy frames (high nickel alloy, manganese kerel alloy, nickel chrome alloy), silica gel (used for children's frame), clam shell, other precious metal frames (platinum, pure gold, k gold, sterling silver) Wait, it is complicated.

Manufacturers of upstream chemical and glass raw materials are generally integrated factories and are not specifically provided for the optical industry. In overseas mature markets, the raw materials of the optical industry giants are sourced from local chemical manufacturers according to the location of their factories, thereby reducing raw material supply risks and controlling costs.

In general, in order to reduce the risk of raw material supply and control costs, enterprises generally do not have a very concentrated raw material supplier, and the upstream market of the optical industry is more dispersed.

Midstream: Lens frame production

When choosing glasses in the store, we often encounter a tricky question, "Do you want to see resin lenses or non-resin lenses?"

This is also the two main types of lenses. The earliest popular non-resin lenses are glass lenses.

As early as the sixth century, glass has become the main material for the production of lenses, and has been used up to date due to its good optical properties such as light transmission and dispersion.

With the development of science and technology, the knowledge of ophthalmology, optics, manufacturing technology and so on is becoming more and more perfect, and people pay more and more attention to the protection of the eyes. This requires that the ideal lens not only has perfect optical performance, but also needs absorption. UV, impact resistance and thinness.

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With the birth of CR-39 resin material in 1947, due to its strong impact resistance and UV-absorbing ability, CR-39 and other resin materials have gradually replaced glass, becoming the main material for producing lenses, and glass lenses in Europe and America. Developed countries have been phased out.

As another important component of the glasses, the frame mainly serves to support the lens and the appearance. According to the material, the frame can be divided into metal material, plastic or resin material, natural material and mixed material. According to the style, it can be divided into: full frame, nylon wire frame, no frame, combination frame, folding Frame, half frame frame, eyebrow frame.

Frames of different shades, styles and materials have gradually changed the glasses from instrumental necessities to fast-moving consumer goods. More and more consumers are even wearing lens-free decorative glasses to create a personalized "eyeglass value". ".

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With the concept of “one person and multiple mirrors” gradually accepted by consumers, the diversified demand for personal image has increased dramatically, and consumers are increasingly inclined to purchase a variety of frames for different occasions, which also gives the glasses industry a full The explosive growth opportunity of the industrial chain scale.

According to our statistics, in the current international market, the glasses frame manufacturers with their own brands are mainly Lu Xun Tica, Xia Fei Nuo, Essilor, Fehrman, Rodenstock, etc. The total market share of the top five manufacturers has been Reached 30%.

In the domestic market, most of the production of frames is a foundry enterprise under the ODM/OEM mode. The industrial clusters are mainly located in Jiangdanyang, Zhejiang Wenzhou and Guangdong Shenzhen.

Downstream: glasses circulation and service

Glasses belong to the combination of semi-medical and experiential products. Consumers have a strong demand for experience before purchasing glasses. Therefore, the current sales terminals are mainly offline retail channels.

The main downstream sales channels of glasses include large supermarkets, brand stores, hospitals, vision correction centers, and e-commerce platforms. At present, there are four main types of optical retailing in China, namely chain store, professional medical eye care, price-oriented, affordable supermarkets and traditional optical shops.

Since the early 1990s, optometry optician stores have appeared in China for the first time. The optometry optician shop is characterized by the fact that customers can complete optometry and glasses in one-time shop to save customers' time. Such specialty stores are more successful in the bright, oriental, Xueliang, Hongxing, Maochang, Baodao, Minglang, bright viewpoints, etc., among which Xueliang, Minglang, and bright viewpoints belong to the Italian eyewear group Luxottica.

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With the interaction and connection between Internet factors and consumer service needs in the information age, the O2O e-commerce model has gradually emerged in China in recent years.

In the glasses market, a typical O2O model allows consumers to purchase their favorite glasses on the Internet at a cheaper price, and then go to the store to perform optometry and optician processing by a professional optometrist. Another O2O model is the cooperation between Internet giants and traditional retailers, such as the public comment and the signing cooperation agreement of Baodao Glasses.

In 2016, the new retail model of the optical industry has begun to take shape, and several emerging fashion brands are moving from online to offline. For example, glasses and Price glasses continue to explore the offline market, the first flagship store of Yinmi glasses opened in Beijing Fangcao, and the Yichao glasses will be joined to the banner to carry out a comprehensive layout; the glasses network red Gentle Monster will be opened first. The domestic official website, online official website direct service, and then opened flagship stores in Beijing, Shanghai, and set a single-day sales of millions of outstanding achievements.

At the same time, the development of new technologies has gradually penetrated into the retail and service of glasses. For example, Baodao glasses are using the technology of artificial intelligence in recent years to convey the consumption habits of members, optometry files, eye health and other data to the hands of first-line sales personnel to improve the efficiency of glasses sales and improve the consumer experience.

It is undeniable that glasses, a traditional and emerging industry, are on the road to an exciting change.

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