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Optical 1996 - Industry Overview

MOVING UP-MARKET
Industry Overview

A SIGHT FOR SORE EYES
Rimless Frames

CASES TO DIE FOR
Spectacle Cases

NEXT STOP, NEW YORK OR MILAN
Women's Optical Frames

Moving Up-market

After years of being known essentially as a low-cost producer of plastic frames targeted at Western markets, Hong Kong's optical industry stands on the threshold of a bright new future. Its products are moving up-market as quality improves and designs become more sophisticated, as companies are taking advantage of the latest technological advances in materials, machinery and techniques.

"The Hong Kong optical industry originated in the mid-60s and was dominated by family-run companies with simple and rather primitive equipment," explains Harvey Fung, managing director of VIP Optical Int'l Ltd and 1994 president and honorary life chairman of the HKOMA. "Production was limited to cellulose and plastic frames coupled with metal accessories. Colours were merely black or brown.

"In 1970, the industry began to launch trail sales on overseas markets and as time went on, it became steadily more prosperous," continues Fung, whose company was one of these pioneers. "It was then that local manufacturers took the initiative, one after the other, to further improve production by studying and learning from the techniques of some European optical manufacturers, as well as using raw materials selectively, laying the foundations of a sound production system."

One of the most significant developments brought about by manufacturers' materials, equipment and technical upgrades has been the increase in the number of "own brands". Also of note is the burgeoning importance of China, not just as a production base but as a market for the territory's optical products.

Hong Kong continues to be a significant OEM producer, but this profile is changing as more and more manufacturers export goods under their own brand names, especially to Southeast Asian and mainland China markets. Licensing arrangements with world-famous designer brands are also on the increase. To ensure that these developments will be successful, more importance is being placed on quality and design.

Tony Chow, current president of the Hong Kong Optical Manufacturers Association, explains how the organisation is playing its part in increasing the competitiveness of its members' products. "We are encouraging the development of advanced technologies and fostering co-operation between manufacturers so they will work closely together for their mutual benefit," he says. This policy is being backed by a number of initiatives, including Q-Mark implementation and joint projects with City University of Hong Kong and the Hong Kong Productivity Council.

"We are co-ordinating with the Federation of Hong Kong Industries to set up an optical Q-Mark to set standards of production and management," says Chow. "We expect this to be completed by the end of this year." OMA is also co-ordinating with the Hong Kong Productivity Council on technological advances. "OMA is working with Hong Kong Polytechnic [now known as City University of Hong Kong] on training courses for frame design," says Chow. "These are aimed at designing frames specifically for Asian faces. For example, the bridge of their noses is lower than those of Europeans."

Donald Tsang, joint general manager, highlights the importance of design. "It is a critical success factor," he says. "However, consumers' tastes differ from region to region and market to market. Local manufacturers have done well in monitoring and capturing customers' preferences." He agrees with Joanne Chan, general manager of Arts Optical, when she says, "Technology is a key factor in design."

Tsang notes that the willingness of manufacturers to invest in and train the relevant staff and increasing use of computer-aided design devices has significantly helped shorten the artwork production time as well as resulting in more imaginative designs.

"The drive among manufacturers to source new manufacturing technology and machinery has also made previously unachievable designs viable," he says.

In response to market demand, local manufacturers are boosting their production of metal frames. "People like to wear them because of the security and comfort they offer," says Allen Hung, director of sales at Moulin Optical Mfy, explaining their current popularity. "The use of light materials such as stainless steel and titanium and spring hinges that can be easily adjusted, have helped."

This point is also emphasised by Daisy Cheung, who is involved in design and product development with Wah Ming Optical Mfy. "Previously, nickel silver was dominant, but now the industry is using monel, titanium, stainless steel and cobalt imported from Japan and Germany," she says, adding that plastic, too, is benefiting from new production techniques. "There is a new, harder formulation of plastic acetate that can be made thinner. There have also been developments in injection-moulded frames using materials such as nylon and polycarbonates."

As Cheung points out, new materials require new production methods. "For example, titanium needs different soldering machinery and plating techniques to those used for nickel." Hong Kong manufacturers are equipping their plants with new machinery from Japan, although Cheung says only a few are working with titanium at the moment because of the expense. "More will use it in the future, however, as demand increases, especially among European buyers because of allergy problems with nickel."

Cheung also notes that consumers are demanding UV protection and different kinds of mirror lenses for sunglasses. Thailand is a common source of sunglasses lenses, but Arts Optical's Chan comments that China has the capability to provide the lenses and as the quality improves and when price is right more Hong Kong companies will buy from the mainland.

"Consumers are going more for smaller shapes," says Hung. "Neo-geometric shapes such as shallow ovals and rectangles rather than ëbig eyes' are popular. Matt colours such as gold and bronze are favoured. Hong Kong manufacturers can cater for all these demands," he adds. Chan notes that mature women are keen on metal trims, while younger ones like clean, tidy and simple styles. "In the past, ladies' classic styles were colourful but for the future they will be lighter," she says.

One of the major changes in recent years has been the shift of production to southern China. More than 70% of manufacturers in the optical industry have relocated labour-intensive operations to areas such as Shenzhen and Dongguan. Key functions such as marketing, design and development, mould-making and quality control continue to be carried out in Hong Kong, however.

Exports for 1995 are expected to total US$64bn, an increase of 28% over 1994. The US is expected to take more than 38%, while China is already in second place with 12%, a jump of 4% over last year. Other significant markets are Japan, Germany and the UK.

"For the time being, most effort is concentrated on the US and European markets," says Hung, pointing out that the high level of the yen is hindering Japanese manufacturers at the moment. "Hong Kong, with its low production costs and increasingly sophisticated designs can take advantage of this, but the low-cost, low-price producers are beginning are looking at markets in South America, Brazil, Vietnam and Russia," Hung says.

However, VIP's Fung highlights the value-for-money aspect of Hong Kong's optical products. "The average export price of today stands at the same level as it did 15 years ago -- to the overseas buyer, this represents really super value," he says. "In the face of stiff competition, local manufacturers have been able to maintain steady growth because they know how to cut costs by means of more advanced techniques through a scientific management system." The shift in production facilities across the border into mainland China has also helped to keep prices down.

Chan anticipates that there will be a move away from dependence on the American market, with a more even spread between the US, Europe and Asia, including mainland China. "The PRC is a very important market for all Hong Kong manufacturers because of its size, though it does present a challenge. People either buy high- end products or very low-end products so have to price yourself right." says Chan.

OMA has been particularly active in the China market in the past year, explains Chow. "We participated in fairs in Shenzhen in April and Guangzhou in early September, for example. At both events, buyers and consumers were very interested in the quality and design of our products."

Hung notes another trend. "Hong Kong manufacturers are pursuing a joint effort with Western partners, such as importers, for production, distribution and sales. Other companies are developing their own distribution networks," he says.

To sum up, Chow says: "The Hong Kong optical industry has been up and running for over 20 years now. We cannot rely solely on mass-produced, cheap goods manufactured by traditional, family-run companies as we did in the 1980s. In order to maintain our edge in the face of low-cost areas, we need to advance our technology to produce higher-level goods. That is our priority for the future. On the other hand, manufacturers have built up relationships with buyers over the years and we should not neglect the mass market but adapt to its requirements, too."

Written by Ann Williams


A Sight for Sore Eyes

At one time, rimless spectacles were associated with elderly scholars hunched over huge tomes in dim, musty libraries. An admirable image, perhaps, but not necessarily one that today's fashion-conscious men and women strive to emulate. But the image of rimless glasses has been turned upside-down in recent years -- today the most stylish spectacle-wearers choose them to correct imperfect vision, provide relief from the sun, or just for a new look.

Whatever your needs, the rimless glasses on offer from Hong Kong manufacturers are sure to meet them all.

Thomas Yu, marketing executive at Brilivision Mfg Ltd, says that although rimless glasses currently account for only a small percentage of the company's total output, their popularity is picking up. "Rimless glasses are especially popular with the younger generation," he says. The company, which has been in business for six years, sells both sunglasses and optical frames in Germany, France, the Netherlands, the US, Asia and Australia. According to Yu, rimless glasses are selling best in Asia and Australia at the moment.

Brilivision's rimless glasses start at US$7 FOB Hong Kong, and its minimum order number is usually about 500 pairs per style, although this is flexible. Delivery time is 90 days for injection frames; for others it's 120 days. Samples are available; whether or not there is a charge depends on the customer. "If they return them, we generally don't charge," says Yu.

International Optical Mfg Co Ltd has been in business for 25 years. The company's major markets are Europe, the US, Southeast Asia and Japan, and its price range for rimless glasses is US$8-12 FOB Hong Kong. The minimum order is 1,000 frames per order. As sales manager Felicia Chen explains, "This minimum can encompass several different eye shapes, as long as they fit the same three-piece." International Optical generally does not provide samples except as part of an order, in which case there is no charge for them.

According to Chen, "Rimless glasses have always been around, in fact, my grandmother wore them! But they have come back, and their popularity peaked in 1994/95." She predicts that rimless glasses will continue to be popular for the next couple of years, and that the next big attraction will be rimless sunglasses or tinted glasses. "Because there's no rim, people often want some colour in the lenses to make them stand out," she explains.

Chen stresses the quality-conscious and progressive nature of her company, and cites its main strength as working with custom orders. "We're not just a supermarket," she says. "We work with customers, and can create something from scratch."

Raymond Chu Optical Co Ltd sells optical frames and sunglasses primarily in Germany, the UK and the US. Anglie Chu, exporting manager, explains that when making rimless glasses, the company uses phosphor bronze temples. "This makes the frames more flexible and durable," she says.

The FOB price range for Raymond Chu's rimless sunglasses and optical frames is US$11-14, and the minimum order is 300 per model. Shipping time is three months, and product samples are available at no charge.

Swank International Mfg Co Ltd sells its products primarily in the US and Europe. The company's prices for rimless glasses range from US$10-20. "It depends on the materials used," explains Tong Yee Ming, the company's director. Shipping time is highly variable as well, depending on the style. Old styles may arrive in as little as one month, while brand new or metal decorated styles, which take a long time to make, may take up to six months. The minimum order ranges from 200 up to a few thousand, depending on price. "If the customer is willing to pay for the mould, then we can sell a small quantity," says Tong. Swank has samples available for customers.

According to Tong, although only a small percentage of customers prefer rimless glasses, they are an item for which there will continue to be a demand for a long time. "Europeans are particularly willing to try new styles," he says, "So they are more receptive to rimless glasses."

So, despite being a niche market, it looks as though the trend for rimless specs is here to stay.

Written by Ruth Barzel


Cases to Die For

Spectacles may tend to steal the optical limelight but the cases they come in are increasingly closing the gap in the style stakes.

Spectacle cases have long been regarded as the poor relation of glasses but their visual impact is becoming more appreciated in line with the trend that is placing more emphasis on general design. And, unlike spectacles, they offer the opportunity to strike out and be more adventurous without making as costly a mistake.

Hong Kong makers offer the pick of the best, from glittering gold designs to simple cases with the discreet emblem of a favoured designer.

Victoria Enterprises Ltd, a manufacturer for the past four years, offers a well balanced range including the Paul model, a metal case distinguished by a lizard-skin effect and the elegant Milano with a pearl grey leather design.

Rachel Walsh, company sales executive, says, "Spectacle cases have become more important. We do many, more expensive, metal ones now whereas previously opticians tended to sell soft cases because they were cheap."

The company has a monthly production capacity of 400,000 and sells mainly to the US but also Japan, Germany and Australia. Several internationally recognised designers use the company for their spectacle case ranges.

"We deal mainly with the US. Case coverings are popular because they use them as a fashion accessory. Sometimes customers find their own material for us to use," says Walsh. FOB Hong Kong prices range from US$0.77-1.40, with a minimum order of 5,000 and a delivery time of about 60 days.

Genesis Asia Ltd produces cases for top designers such as Pierre Cardin, Gucci, Cerruti and Moschino, and emphasises the quality of its pieces.

Horatius Wong, managing director, stresses: "We manufacture in China and our cases are of medium to high quality. If the quality wasn't there, I think these brand names would take their production elsewhere." The company lists Italy, France, the UK, the US, Japan, Germany and Australia among its markets.

Wong says the company is tapping new markets in South America, particularly Argentina. "We have been looking for agents, distributors or partners in South America. Our eventual target is to have agents and distributors in each major country and on every continent," he reveals.

The company makes a range of plastic cases costing around US$0.50, soft cases at US$0.70, metal ones for US$0.80-1.20 and paper ones for US$1.00-1.50. The minimum order is 1,000 with delivery time between 45 and 60 days. Custom-made orders take up to 90 days.

Eight-year-old Intercom Packaging Co Ltd, an optical case manufacturer with a monthly production of up to 400,000 pieces, offers a flexible service to customers, with no minimum order requirement.

Paul Wong, managing director, said his customers, mainly in the US and Europe, particularly the UK, are showing a greater preference for metal cases. "People are using metal-framed spectacles more than plastic ones. That's why they are requesting hard cases,'' he explains.

The company makes a wide range from inexpensive plastic cases to metal ones covered in tasteful floral fabrics. "The trend is for more variety with different finishes," Wong reveals. "We aim to be as flexible as possible with prices and designs to suit everyone." FOB prices range from US$0.70-1.10 with a delivery time of 45 days.

Kong Lung Mfy Ltd is another company that produces its cases in China and makes cases to order or offers its own designs. The range includes classic gold and silver- coloured cases with a 1950's feel and silver skin effects. The company has a monthly production of 2m pieces, selling mainly to Japan, the US, Italy, Germany and Belgium.

Marketing supervisor Connie Wong states, "Some design information is given by the client and some we research ourselves. We are always trying to produce new designs. Metal cases covered in PVC are our most popular range."

FOB prices range from US$0.40 for plastic cases to US$1.00 for metal ones. The delivery time is 50 days with a minimum order of 5,000 pieces per model.

No matter how general or specific the requirements, Hong Kong's highly skilled professionals with their meticulous attention to detail can help turn dreams into reality, supplying spectacle cases that will stand out from the crowd.

Written by David Richards


Next Stop, New York or Milan

The Hong Kong women's optical frames manufacturers with high hopes for European and American markets are focusing on key trade fairs to boost sales.

Most top manufacturers will attend either the fair in Milan or New York next year, with some companies represented at both. The events are ideal opportunities for buyers to view the top-quality frames presently being produced by Hong Kong firms.

The quality of Hong Kong frames now rivals that of those produced in Italy, but Hong Kong manufacturers have a big advantage -- their frames are considerably cheaper.

Korean firms are major competitors for Hong Kong manufacturers, though the prices of Korean-made frames have increased considerably and are now comparable. This gives Hong Kong manufacturers an edge over their regional rivals, because when it comes to the important matter of quality, Hong Kong is way ahead.

Most Hong Kong firms make a large number of different types of frames. Those intended for women range from very simple yet elegant to the more colourful and adventurous.

Always Top Ind Ltd, for example, produces more than 300 different styles of frames. Its prices range from US$4-8.50 FOB Hong Kong. The main export markets are Germany, Spain, Sweden and Canada, but the company hopes to enter more markets in 1996.

Made from European materials, the frames are usually made from an alloy of monel and nickel-silver imported from Germany, hinges and transfer paper from Italy and paint and lacquer from Italy and Switzerland. The company's minimum order requirements vary according to range.

"For our most expensive Emerald range it is 100 pieces, for the middle-priced Verde range it is 200 and for the lowest-priced Verde Plus range it is 300," says Always Top manager Amy Siu. "The delivery could sometimes be within 45 days but normally it should take 90 days."

"We want to try and sell much more in the UK next year and we'll be going to the Milan trade fair and perhaps the one taking place in New York. But if we decided to enter the market in the States, then we will develop new styles to cater specifically for that market," she adds.

In business for 20 years, Omyl Optical Mfy Ltd produces as many as 400 different frames. The company's minimum order requirement is 400 frames and the delivery time is normally around three months. Omyl uses only high-quality materials from Germany and Japan to produce its frames, and the prices range from US$10-16 FOB Hong Kong.

"We sell mainly in Europe and Asia and we'll be going to the trade show in Milan next year to promote our goods in Europe. Like everyone else, we would like to open up new markets, but at the moment we're not yet really sure where," says Omyl manager Stephen Lo.

Also Italy-bound is Tronform Industries Ltd. It produces more than 500 different styles using materials from the US, France, Italy, Hong Kong and China. Tronform's minimum order requirement is 250-300 frames and the delivery time is normally 45-60 days.

The company has been in business for eight years and exports its frames all over the world. The major markets at the moment are Western Europe and Australia. Tronform had opportunities to sell in Eastern Europe, but after carefully studying the situation decided not to. Prices range from US$10-30 FOB Hong Kong.

"A lot of companies from eastern Europe wanted us to do business but I decided not to because of the payments problems which exist there," says Tronform general manager Simon Lai. "We go for high quality products and even though my prices might look a little bit high the customers are willing to pay because they like the quality we provide."

Another leading Hong Kong firm is Arts Optical Mfy Ltd. The company has been in business for 16 years and uses acetate sheet and hinges from Italy to produce its stylish frames. Its highly trained workforce produces as many as 50 new styles per month.

The company requires an order of at least 600 frames from American customers and 400 from Europeans. Delivery time normally ranges from 100-130 days.

One of the longest-established manufacturers in the territory is V.I.P. Optical Int'l Ltd, which has been producing good quality frames for 26 years. The company sells its frames globally and uses only top-grade materials from Italy, Germany, France and Japan to produce them.

"Our prices range from US$13-20 and we have a minimum order requirement of 100 pieces," says managing director Harvey Fung. "Our delivery time normally takes around 60 days."

Written by Gerry Marron

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