Sunglasses Report — Industry Overview — Sample Pages: Sourcing Sunglasses from China

Industry Overview: Sunglasses

China's sunglasses suppliers continue to rely on their traditional strengths: OEM work, high output and low prices. But as competition among export suppliers heats up, more makers are adding a fourth dimension to attract buyers — the capability to develop unique designs. Exports reached an estimated US$370 million in 2004, across fashion, sports and children's models. Low-end and midrange models still dominate output, but the number of high-end designs is increasing, and quality and innovation are improving in all price ranges. With about 300 exporters competing to launch designs with special features, research and development expenditure is rising quickly: of the 73 suppliers featured in this report, 71 percent planned to boost R&D spending in 2005. Even in Wenzhou, China's main hub of low-end production, suppliers have enriched their lines by investing in value-added models.

China's makers see frames, not lenses, as the main selling point, and are enhancing work on unique-looking frames — wraparound, oversized, translucent and patterned versions. Fashion sunglasses are the biggest line at about 50 percent of export output, sports sunglasses make up a third, and children's models account for the rest; most designs are unisex, in plastic and metal frames. OEM orders are the core business, with production for companies such as Wal-Mart, Guess, Disney, Polaroid and Marks & Spencer. A 12 percent expansion in exports was projected for 2005, with 85 percent of interviewed companies anticipating higher sales, fuelled largely by demand in the European Union. Against that growth sit rising petroleum-driven costs for plastic frame and lens materials and a shortage of skilled workers in coastal cities, as workers return to home provinces where local employment is growing — pressure that pushes wages up and margins down.

How to Read This Overview as a Buyer

Read the overview for decisions, not background. The cost figures tell you how much room a supplier has to negotiate: a maker absorbing most of a cost increase will either raise prices soon or cut somewhere you cannot see, and both possibilities belong in your order planning. The competition analysis tells you where your enquiry has leverage — crowded, standardised segments compete on price, while design-led segments compete on capability — and the supplier survey turns the industry's own expectations about prices, sales, research focus and capacity into a planning horizon for the year ahead. In this report, Wenzhou is profiled as the production hub, a fact the full overview develops with production and survey detail.

The overview also frames the 73 profiles that follow it. A profile's prices mean little until they are set against the overview's price trends; a factory's expansion plan means more when two-thirds of its competitors are expanding too. Buyers who read the overview first consistently shortlist better, because they know which claims to test when they reach the profiles and the product gallery.