France’s Es­silor sees ex­po­nen­tial growth in eye care mar­ket in China

China Daily - - BUSINESS - By YUAN SHENGGAO

As the am­bi­tious helms­man of Es­silor in China, the French con­glom­er­ate in the lens busi­ness, Ar­naud Ribadeau Du­mas is set­ting his eyes on mat­ters beyond his in­dus­try.

The Parisian, who has been work­ing in the lens man­u­fac­tur­ing in­dus­try for nearly two decades, said play­ers from other in­dus­tries — such as the man­u­fac­tur­ers of chic sneak­ers or smart­phone mak­ers — are steal­ing all the lime­light.

“What we are re­ally fight­ing (in China) is not com­pe­ti­tion, but a lack of aware­ness,” said Du­mas, pres­i­dent of Es­silor Greater China.

He made his re­marks in Shang­hai in Novem­ber as the com­pany of­fi­cially kicked off a My­opia Man­age­ment White Pa­per, in col­lab­o­ra­tion with the op­tom­e­try group of the Oph­thal­mo­log­i­cal So­ci­ety in the Chi­nese Med­i­cal As­so­ci­a­tion and other in­dus­try ex­perts.

“Our com­peti­tors are from other in­dus­tries that get more at­ten­tion from con­sumers than us,” he said. “Peo­ple are will­ing to pay more to get a pair of sneak­ers than the right pair of glasses, which are at sim­i­lar prices.”

With some 100 to 300 mil­lion pairs of glasses be­ing sold every year, China is al­ready the world’s largest eye­wear mar­ket by vol­ume, ac­cord­ing to Du­mas.

But for Es­silor, which has been in China for 23 years, only half the mar­ket po­ten­tial, if not less, has been un­locked, he said.

The World Health Or­ga­ni­za­tion has es­ti­mated that there are 600 mil­lion peo­ple in China af­flicted with my­opia, ac­count­ing for nearly half of its pop­u­la­tion.

The rate of my­opia oc­cur­rence is still on the rise, ex­ceed­ing 70 per­cent in se­nior high schools and uni­ver­si­ties, and reach­ing 50 per­cent in el­e­men­tary schools.

Ac­cord­ing to a re­port by Li Ling, a pro­fes­sor from Pek­ing Univer­sity, in 2012, visual im­pair­ment of all types cost a to­tal of 680 bil­lion yuan ($99.19 bil­lion) to treat in China, ac­count­ing for 1.3 per­cent of the coun­try’s GDP that year.

The num­ber of peo­ple in need of eye cor­rec­tion in China, which re­ported one of the high­est my­opia rates in the world, is likely to ex­ceed 700 mil­lion by 2020, twice the pop­u­la­tion of the United States, Li re­cently warned.

Con­sul­tancy Euromon­i­tor es­ti­mated that re­tail sales of eye­wear in China is likely to reach 81.2 bil­lion yuan in 2018, up by 5.6 per­cent year-on-year. Es­silor is now a lead­ing player by re­tail value in China.

“We tend to con­sider China as a mar­ket that is still slightly un­der­de­vel­oped in terms of eye cor­rec­tion and pro­tec­tion,” Du­mas said, at­tribut­ing his con­clu­sion to three causes — low aware­ness, lim­ited ac­cess to eye­care pro­fes­sion­als and the in­ad­e­quate pro­fes­sion­al­ism of op­ti­cians.

Du­mas noted that only half of the peo­ple with my­opia in China have had their vi­sion cor­rected, while the other half don’t wear any spec­ta­cles or con­tact lens at all, which he be­lieves is more a mat­ter of aware­ness than af­ford­abil­ity.

Even for those who have their eye­sight cor­rected, the prod­ucts may have been “500 years old”, as Du­mas joked. The out­dated eye­wear means a lack of com­fort, or in­abil­ity to pre­vent dam­age from such things as blue light or UV light, which are con­sid­ered harm­ful to eye­sight.

This has re­sulted from an­other prob­lem: the pro­fes­sional level of op­ti­cians, who are not sup­posed to be sales­men sell­ing “frames” and “glasses”, but med­i­cal pro­fes­sion­als ca­pa­ble of deal­ing with the prob­lems con­sumers are fac­ing and pro­vid­ing so­lu­tions.

The dire sit­u­a­tion has also caught the at­ten­tion of the Chi­nese govern­ment.

In Au­gust, a top govern­ment leader de­clared that poor eye­sight has be­come a na­tional epi­demic in China and called for the is­sue to be ad­dressed so teenagers had a “bright fu­ture”.

In the fol­low­ing month, the Min­istry of Ed­u­ca­tion, the Na­tional Health Com­mis­sion and six other depart­ments of the cen­tral govern­ment jointly un­veiled a new scheme

2015 on: Pres­i­dent of Es­silor Greater China

2013-2015: Coun­try man­ager of Es­silor Brazil

2011-2013: Gen­eral di­rec­tor of Es­silor Brazil to curb the spread of my­opia.

The rate of my­opia among pri­mary school kids is ex­pected to drop be­low 38 per­cent by 2030, and the rate among ju­nior and se­nior high school stu­dents to fall be­low 60 per­cent and 70 per­cent re­spec­tively.

“In the last five years, the eye­wear mar­ket has dou­bled in China,” Du­mas said. “But we strongly be­lieve it can triple in the com­ing decade, thanks to the very strong en­gage­ment of the govern­ment, and the joint ef­forts of hos­pi­tals and op­ti­cal stores, to make eye cor­rec­tion as im­por­tant as any other treat­ment but as en­joy­able as shop­ping for a pair of sneak­ers.

“The ob­jec­tive at the mo­ment is not to gain mar­ket share or to fight the com­pe­ti­tion, but to de­velop the mar­ket first, which as I say can be three or four times big­ger,” he added.

While the com­pany de­clined to re­veal spe­cific rev­enue or growth rate by mar­ket or re­gion, it noted that its Chi­nese busi­ness en­joyed a dou­ble-digit growth rate in 2017 and was look­ing to re­peat that in 2018.

The com­pany gen­er­ated 7.49 bil­lion eu­ros ($8.57 bil­lion) in rev­enue world­wide in 2017, with an an­nual growth rate of 6.7 per­cent.

North Amer­ica re­mains its largest mar­ket, con­tribut­ing 46 per­cent to its busi­ness, while the Asia-Pa­cific re­gion ac­counted for 19 per­cent.

Es­silor, cre­ated by a merger of the two French brands Es­sel and Silor in 1972, has ac­quired more than 250 com­pa­nies over the past 20 years. In China, the com­pany has adopted a unique way of grow­ing its busi­ness — through part­ner­ships and set­ting up joint ven­tures with lo­cals.

Cur­rently, it has two Chi­nese re­tail part­ners: Bolon, which is strong in sun­glasses, and Mu­josh, an eye­wear fash­ion re­tail chain that has 1,300 out­lets across the coun­try. It’s also in part­ner­ship with nine lens man­u­fac­tur­ers in Danyang, in east­ern Jiangsu prov­ince, the world’s largest spec­ta­cle pro­duc­tion hub, mak­ing more than 30 per­cent of the world’s to­tal out­put.

The com­pany is also plan­ning to in­tro­duce an un­prece­dented num­ber of eight sets of new equip­ment to China, in­clud­ing lens mak­ing, once they gain the ap­proval of the China Food and Drug Ad­min­is­tra­tion.

One of the new launches, called Vi­sion R (TM) 800 is a phoropter — a de­vice that has dif­fer­ent lenses used for re­frac­tion of the eye dur­ing sight test­ing.

“Our com­pany’s vi­sion is im­prov­ing lives by im­prov­ing sight,” Du­mas said. “It’s our job to make eye­wear a safe and help­ful de­vice, and con­sumers to take it home as a nice fash­ion ac­ces­sory.”

Name:

Ar­naud Ribadeau Du­mas

Ca­reer:

Ed­u­ca­tion:

Se­nior Man­age­ment Pro­gram, INSEAD

Ad­vanced Man­age­ment Pro­gram, Thun­der­bird School of Global Man­age­ment

Mas­ter of Busi­ness Man­age­ment, Paris Dauphine Univer­sity

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