The Wall Street Journal-20080206-LensCrafters Focuses on China- Retailer Hopes to Change Perception of Eyeglasses- Thrift Plays a Major Role

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LensCrafters Focuses on China; Retailer Hopes to Change Perception of Eyeglasses; Thrift Plays a Major Role

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BEIJING -- In 2006, the head of LensCrafters in China was poring over data on the eyewear-buying habits of the world's most populous nation that hinted at a tough task ahead. Chinese consumers see glasses as just remedial tools, the research said, and their priority often is price, not high quality. While the Chinese cared a lot about their health, he concluded, they weren't willing to invest much money in their eyes.

"Consumers in China are very price-sensitive" when it comes to buying eyewear, said George Minakakis, chief executive of Luxottica Retail Greater China, part of Milan-based Luxottica Group SpA. The group owns the LensCrafters brand, as well as Pearle Vision and Sunglass Hut, and has more than 6,000 stores world-wide.

Because eyewear in China remains a relatively unsophisticated sector, it offers opportunities for foreign brands -- if they can change habits. China ranks as one of the world's most myopic nations; 70% of its 16- to 18-year-olds are nearsighted, according to state media. If the trend persists, researchers say, some 700 million Chinese will be nearsighted by 2045.

LensCrafters entered China in September 2006. Mr. Minakakis began with a branding effort to try to get buyers to trust the LensCrafters name, and he then added advertising. The company rolled out scratch- off cards giving customers various levels of discounts to help keep prices within reach. The company emphasized its quality and 30-day guarantee. This year, a marketing campaign will aim to educate Chinese consumers about the need to take good care of their eyes. A direct- mail strategy is in the works, and the company is tapping celebrities for its sunglasses-marketing effort.

"You need to blast the brand into the minds of the consumers," Mr. Minakakis said.

The marketing blitz has made LensCrafters a trendsetter in the stodgy eyewear industry in China, where shopping for glasses can feel like a museum visit. Spectacles there often are stored in glass cases and admired from a distance; LensCrafters places glasses on open shelves within easy reach of customers.

The company has 166 stores in China. It expects revenue there to jump about 33% this year to about 100 million euros, or nearly $150 million.

Middle-class Chinese, still only a fraction of the urban population, may take a while to get used to LensCrafters' prices. A pair of glasses averages 2,000 yuan, about $280, in LensCrafters' higher-end stores, more than double an average urban household's monthly salary, according to government data. In some LensCrafters stores, products start as low as 280 yuan, although they aren't the main revenue spinners.

"With the money, I'd rather buy a nice suit than a pair of glasses," said Fred Duan, an executive at Siemens China in Beijing.

In China, many consumers go to flea markets and wholesalers to buy glasses; such places advertise bargain-basement prices.

To make its offerings stand out, LensCrafters has an eye-care campaign that touts health. Store assistants will be trained to promote regular eye checkups at LensCrafters stores, a way to get customers to return. Eventually, all its stores will install sophisticated machines, such as tonometers to detect glaucoma, says Ben Chong, director of LensCrafters' retail operations for Beijing and Shanghai. The company has started a school in Beijing to train optical technicians, some of whom may staff its stores when they graduate.

Starting this spring, LensCrafters will focus on sun protection. To promote sunglasses as a must-have fashion item, the company is using "celebrity seeding" marketing. Chinese movie stars and recording artists who wear LensCrafters glasses are encouraged to wear them at public events like movie premieres, where magazine photographers are likely to snap them. The company says it doesn't pay celebrities for such publicity.

Analysts appear upbeat about LensCrafters' prospects, citing Chinese consumers' increasingly deep pockets and developing fashion sense.

"Eyewear is today seen as a form of adornment to be matched with clothes, caps, gloves and handbags," said Wu Wen, a professor of art and fashion at the Xian Polytechnic University. "There are already consumers who will buy Louis Vuitton handbags. They are the ones who also will buy pricey eyewear."

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Sue Feng contributed to this article.