Clear vision to build own brands

Optical glasses producer aims to make mark in US, Europe with high-end products

Dressed in an Armani overcoat and the sunglasses made by his company, Wu Jianmin exudes confidence that his company will bag more orders at the Milan International Spectacle Expo in March.

"Despite the economic slowdown in major markets like Europe and the US, we are hopeful of winning orders of over $4 million (3 million euros) during the expo, a 40 percent growth over what we got at the same event last year," says Wu, president of Wenzhou Lidong Optics Manufacture Co Ltd.

Wu's confidence stems from Lidong's consistent efforts to move up the value chain after it became the first optical glasses company in Wenzhou to develop its own brand and enter the high-end market with products.

In 2004, Wu launched the "PolarOne" and "Polarsolar" brands for the high-end market. Since then, Wu has been investing more than 5 percent of his sales turnover on design and development every year, and currently holds five patents.

Starting off as an original equipment manufacturer (OEM) for luxury brands like Prada and Gucci in 1995, Wu always cherished a desire to have his own brands.

"Being an OEM was not so lucrative considering that one can make a profit of just $5 from each pair of spectacles," Wu says.

"Factors like the rising yuan, fluctuating exchange rate, shrinking export margins and dwindling export orders, made me realize that to survive the fierce competition, it was necessary to move up the value chain with high-end brands."

But Wu says it was not easy for Chinese manufacturers, which usually do OEM orders for foreign brands, to build their own brands.

He still remembers how embarrassing and irritating it was when two American optical glasses buyers refused to take a look at his branded products when he first introduced them.

"They told me arrogantly that Chinese spectacles are just cheap and low-end products, which made me very angry and determined to get rid of this tag," Wu says.

To realize his goal, Wu decided to import more than 50 first-class spectacle manufacturing and testing machines from Germany, with each machine costing more than $500,000.

"China's eyeglasses manufacturers have many advantages such as low labor costs and high production capacity. What we lack is design and creativity," he says.

Wu employs more than 200 people in design and R&D, with 50 of them based in Hong Kong and 10 in Italy.

By advertising the products on television and Internet and teaming up with other foreign clients, Wu has successfully made his two high-end brands extremely popular with the fashion conscious.

Richard Roberts, general manager of Euro Optics based in Eindhoven, the Netherlands, says that he admires Wu's perseverance in building the brand.

"We have been working together for 17 years. In the beginning, Wu was a major OEM for our products. But as the Chinese brands started to gain more recognition, we decided to sell them along with other brands in Europe," Roberts says.

Wu's brands have so far been exported to 57 countries and regions across the world including the US and Europe. In 2011, the export volume of the two products stood at about $5 million.

Currently, Lidong is partnering with its 1,000 domestic franchise stores to sell the two brands in the domestic market, and plans to open more than 10 shops of its own in Zhejiang province.

"We plan to open nearly 200 shops in the next five years," Wu says.

Lidong has also stepped into some high-tech areas such as the 3D spectacle sector. "It will be a huge market for us especially when 3D films and 3D TVs start becoming more and more popular," Wu says.

"We started making 3D spectacles three years ago and expect it to account for 40 to 50 percent of our annual output in 2012. The 3D spectacles will be exported to the US, Japan, Europe and South Korea," Wu says.

Lidong also plans to produce 1 million pairs of 3D spectacles every month for some TV companies like China's Skyworth, South Korea's LG and Japan's Toshiba this year. The average price of each pair of spectacles is about 20 yuan ($3.18, 2.39 euros).

"We own two patents in the 3D spectacle manufacturing area, and are currently the leaders for the same in the domestic market."

He also expresses confidence in the spectacle industry's future development, despite the fact that many of his local counterparts have decided to diversify into other more profitable sectors such as real estate and solar energy.

"Although the optical glasses industry is not that profitable when compared to some other industries like real estate, I want to do what I like and am familiar with. Being a traditional manufacturing industry, it also has relatively smaller risks," Wu says.

Starting off as a family business, Lidong currently has 1,200 employees and had sales revenue of 200 million yuan in 2011, a year-on-year increase of 35 percent compared with 2010. "We expect our sales revenue to reach nearly 260 million yuan this year," he says.

The 41-year-old Wu is also the current president of the Wenzhou Spectacles Industrial Association.

"As the association president, my vision has been largely expanded. But it also costs me much time and energy. One has to pay the price before the returns, like building your own brands. You should take some pains and risks before you get gains," Wu says.