|China 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
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 improve.
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
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 patterned versions.
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
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 European Union.
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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