Haichang Contact Lenses: In an era of change, seeking the unchanging growth pattern | WISE2024 Future Consumption Conference

On November 29, the WISE2024 Future Consumption Conference was officially held in Beijing. This conference is hosted by 36Kr Future Consumption, with the theme of "Always with You", focusing on hot topics in the consumer industry. It invites more than 20 investment institutions, platform sides, brand sides, and service provider executives to jointly explore new trends and opportunities in the consumer industry.

It seems that in a seemingly niche track, a large-scale "giant" can also emerge, and Haichang Contact Lenses has been proving this point. Since introducing contact lenses to China in 1985, Haichang has been deeply rooted in this track and continuously exploring. In 2022, against the background of the slowdown in the industry growth rate, Haichang's official controlled retail sales increased by 20% against the trend; in 2023, the business scale of contact lenses continued to rise, with official controlled retail sales exceeding 1 billion yuan, covering more than 50 million users. In the contemporary era of weak growth in consumer goods, Haichang and its contact lenses have not "disappeared".

What is the secret behind this? Li Li, the director of the Brand Marketing Center of Haichang Contact Lenses, shared her methodology at the 36Kr Future Consumption Conference, "Products are the foundation of the brand. Continuously exploring the needs and pain points of consumers and doing well the '1' of the product is the most critical point."

In terms of products, Haichang communicates deeply with consumers to enhance trust in the audience's hearts; in marketing, it looks for emotions that fit contemporary young people to establish a deeper emotional connection between the brand and consumers; in innovation, Haichang is not satisfied with the traditional functional needs, but expands the color contact lens track to meet the needs of people who want to enhance their confidence through makeup.

Li Li believes that To be a long-lasting brand, it is necessary to implement a "crowd strategy" and continuously improve the brand's compound interest growth model on the basis of existing value.

Through comparison, Li Li assesses that in the Chinese mainland market, the contact lens industry has huge growth potential. There are 680 million myopic people in China, but the penetration rate is only 10%. In contrast, the penetration rate in Japan and South Korea is more than 30%. "In the next 5 - 10 years, we are confident to increase the penetration rate to 15% - 20%."

Li Li, Director of the Brand Marketing Center of Haichang Contact Lenses

The following is the speech record of Li Li, the director of the Brand Marketing Center of Haichang Contact Lenses, edited and organized by 36Kr:

Good afternoon, everyone! I am very glad to be here today to share some thoughts on the contact lens industry with you.

Contact lenses may be regarded as a niche category in many people's eyes, but in fact, the annual retail scale of this industry in China is close to 20 billion yuan, and there is still a lot of room for development in the future. Today, I would like to combine the theme of "Future Consumption" to talk with you about the current situation of the contact lens industry and how to break through the current situation and move towards greater possibilities.

First of all, let me briefly introduce the basic situation of contact lenses. It is a small product with a diameter of only 14.0 - 14.5 millimeters. It can be said that the product itself is very invisible. Contact lenses belong to the third type of medical devices, which means it is subject to strict supervision and marketing restrictions.

Perhaps you may have some impressions. Before 2015, we could see celebrity endorsements of contact lens brands on some major media. For example, Haichang once cooperated with S.H.E and Jolin Tsai. But after 2015, celebrity endorsements were completely banned in the contact lens industry, which also triggered new thinking about the content and methods of communication of contact lens brands.

Let's talk about the industry population penetration of contact lenses. There are 680 million myopic people in China (data from 2023), but the number of contact lens users is only 65 million, and the penetration rate is only 10%. In contrast, the penetration rate of contact lenses in Taiwan, China is 34%, South Korea is 30%, and Japan is 32% (this is still the number from 2021), and we predict that the penetration in these regions should be around 40% in recent years. It can be seen that the Chinese mainland market has huge growth potential. In the next 5 - 10 years, we are confident to increase the penetration rate to 15% - 20%.

In everyone's intuitive perception, contact lenses should be a product for correcting vision, but in fact, there are currently two main categories of contact lenses. We can use the "beauty" category that everyone is more familiar with for analogy, which may be more intuitive.

Transparent contact lenses are more like skin care products, and their main function is to correct vision. Its decorative attribute is not strong, and consumers are more concerned about the comfort and quality of wearing. The market competition for this type of product is not so fierce. There are only six or seven main brands in the market, and the entire market share accounts for about 40% of contact lenses.

Color contact lenses (referred to as "color pupil lenses") are completely different. It is more like makeup. Color pupil lenses of different colors, patterns, and diameters can make eye makeup more changeable.

In recent years, the color pupil lens track has developed very rapidly. Especially in scenes such as daily selfies, travel, and concerts, young consumers will choose color pupil lenses to enhance their makeup effects. There is a very interesting phenomenon: In the past two years, concerts across the country have grown explosively, and in addition, the growth of the contact lens takeout channel in the past two years has been very rapid. Every time within a 3-kilometer radius near the concert, the small packages of daily disposable color pupil lenses will be sold out.

For example, in the last concert in Shenzhen, our customer, Dr. Glasses, received replenishment notices from 10 stores in a row, which shows that consumers' demand for this category in the immediate scene is very clear.

Color contact lenses account for about 60% of the entire market share. What is more worthy of attention is that among the purchasers of color pupil lenses, 38% of consumers purchase 0 degrees (flat light). These people are not myopic people. They buy color pupil lenses just to make their makeup more beautiful. This number is a greater opportunity market for us. In this way, the target population targeted by the color pupil lens market is no longer 680 million myopic people, but covers a wider group in the 1.4 billion population.

As the pioneer of the Chinese contact lens market, Haichang introduced contact lenses to China as early as 1985 and officially established the Haichang brand in 1995. By next year, we will celebrate our 30th anniversary. From the first lens in 1985 to today, every stage of the industry's growth and development is faced with different competitions. In different cycles of brand development, we are also thinking, as a leading brand, especially under the baptism of the new consumption wave, how can the brand move from tradition to innovation while maintaining the brand's sustainable growth?

In the long river of the times, to be a long-lasting brand, it is necessary to continuously improve the brand's compound interest growth model on the basis of the existing value of the brand. Simply put, it is the "crowd strategy".

From the changes in users, to the changes in category needs, to the changes in interest fields, there are many opportunities and challenges in the process. But after various validations in the market, in the final analysis, doing well the '1' of the product is the most critical point.

For products, we have been committed to exploring the needs and pain points of consumers.

For example, for the demand of scene-based products, users need to wear more comfortable products in scenes such as fitness, sports, and outdoor. We have launched 0.05-millimeter ultra-thin contact lenses to give consumers a more seamless feeling during use.

In order to make the "996 workers" have a more "painless" long-term "standby", we upgraded the material from hydrogel to silicone hydrogel to meet the needs of modern young people for "long-term standby" with higher oxygen permeability.

In terms of IP, many brands have been doing IP co-branding in recent years, but we believe that co-branding is not simply changing the packaging, but truly combining the product with the IP better and integrating into the interests of consumers.

From 2022 to 2023, we cooperated with the top IP "League of Legends". Based on the strong technical support of Haichang's own supply chain, we designed the corresponding color pupil lens patterns according to the pupil color characteristics of each hero character, which was highly recognized by the IP side, users, and fans, and once showed a strong sales trend at the sales end and also gained a very good reputation in marketing.

In addition, we believe that The brand needs to launch new products to continuously enhance the brand's market vitality, but more importantly, the brand needs to have 1 - 2 core best-selling products to sediment the brand's cognition in the minds of consumers.

In the color pupil lens category, we launched the "Chasing Light Series" in 2020. Through 3 - 4 years of sedimentation, this series stably contributes more than 100 million yuan in sales every year and is in a continuous and rapid growth. This series is not only the success of a single product, but also the embodiment of Haichang's long-term adherence to the "from 1 to many" best-selling strategy.

At the beginning, I mentioned that the industry penetration of contact lenses is currently only 10%. We have been talking about how we are doing with that 10%, but as a leading brand in the industry, we need to drive the overall growth of the industry, break through the existing population penetration, and explore new population growth points.

In this regard, first of all, we need to communicate deeply with consumers. With the rapid development of the online market and the increasing proportion, there are many first-time contact lens users who have not even received a professional eye examination. Two weeks ago, an official media on Douyin posted a post about the sandwich process of color pupil lenses, which once caused a heated discussion on the Internet. As a third-type medical device, contact lenses should increase consumers' attention and importance to its safety.

At present, consumers really need such a trustworthy professional institution to tell them how to choose contact lenses more safely, and what parameters should be used to judge how to choose a pair of contact lenses that suits them, etc. Haichang established the "Pupil Color Research Institute" at the end of 2022, dedicated to empowering consumers with more professional content.

At today's meeting, almost every guest mentioned the word "emotional value". Indeed, in the current era, every brand is trying to provide "emotional value" for users, and we are no exception.

In August this year, we jointly created the industry's first Super Brand Day with Tmall. We launched an artist co-branded color pupil lens. In the naming of the product, we chose some energy words that are more resonant with current users, such as "Money-Attracting Constitution" and "Heartbeat Arrival", etc. The response to the launch of this series was very good, and among them, "Money-Attracting Constitution" sold the best. The current emotional orientation will guide consumers to be attracted by this name. This product that combines the emotional value of consumers has established a deeper emotional connection between the brand and users.

As mentioned earlier, the users of color pupil lenses are not only myopic people, but cover more people who want to enhance their confidence through makeup. This makes the market space of color pupil lenses far exceed that of traditional contact lenses, which is also an opportunity point that we will continue to focus on and continuously break through and penetrate in the next stage.

The future space of the contact lens industry is still very large. For a brand's 30 years and the next 30 years, Haichang will continue to take users and products as the core, and explore more possibilities through product innovation, deep exploration of emotional value, and more accurate marketing methods. As a traditional brand, our goal is not a short-term "explosive popularity", but to achieve a long-term sustainable "resilient growth" and go through every competitive cycle.

This is the end of my sharing. Thank you all!