sunglasses suppliers continue to rely on their
traditional strengths: OEM work, high output and low
price. But as competition among export suppliers in
China heats up, more makers are adding a fourth
dimension to attract buyers
the capability to
develop unique designs.
With exports reaching an estimated US$370 million
in 2004, China produces sunglasses in fashion,
sports and children's models. While low-end and
midrange models still dominate output, the number of
high-end designs being offered is increasing, even
as quality and innovation in all price ranges
More China suppliers are realizing that offering
the world's lowest prices is no longer enough to
ensure survival. As a result, R&D expenditure is
rising as the country's 300 or so exporters compete
to launch designs with special features. Of the 73
suppliers featured in this report, 71 percent plan
to boost R&D spending in 2005.
Even in Wenzhou, China's main hub of low-end
production, more suppliers over the past couple of
years have enriched their lines by investing in
development of value-added models.
China sunglasses makers see frames, not lenses,
as the main selling point of their products. To gain
an edge over the competition, makers are enhancing
R&D work on models with unique-looking frames,
including wraparound, oversized, translucent and
Fashion sunglasses are the country's biggest
line, accounting for about 50 percent of export
output. Sports sunglasses make up a third and
children's models account for the rest. Models with
both plastic and metal frames are offered. Most
sunglasses are unisex designs, although some designs
specifically for men or women are manufactured.
OEM orders are the core business of the industry.
China suppliers produce sunglasses for such
wellknown companies as Wal-Mart, Guess, Disney,
Polaroid and Marks & Spencer. Most makers currently
do not offer in-house labels. But as more makers
enhance their design capability, we see the number
of them with in-house brands increasing.
We also see continued solid growth for the
industry as a whole. A 12 percent expansion in
China's sunglasses exports is projected for 2005,
and our survey findings support this. Some 85
percent of companies interviewed in this report
anticipate higher sales in the coming year. Growth
will be fueled largely by increased demand in the
In reaction to higher material and operating
costs, many suppliers plan to inflate product prices
in 2005. Soaring international petroleum prices are
having an impact on the cost of plastic frame and
lens materials used by China sunglasses makers.
Other operational challenges are eating into makers'
profit margins, too, creating a situation conducive
to price increases.
Suppliers in many of China's coastal cities are
contending with a shortage of skilled workers.
During the past two decades, people from rural
northern and interior provinces flocked to factory
jobs in booming metropolitan areas of Zhejiang,
Fujian and Guangdong provinces. But those workers
are now opting to return home, where economic growth
is offering them opportunity for convenient local
employment. In response to the labor shortage,
sunglasses makers now have no choice but to attract
workers with higher wages.
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