Foreign lenses, an optical illusion
- By Chen Boyuan
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E-mail China.org.cn, July 25, 2013
Top international lens makers such as the France's Essilor, Germany's Karl Zeiss, and Japan's Hoya are suspected of monopoly in China with their price control regulations, 21st Century Business Herald reported recently.
According to the Herald, these optical giants forbid franchise retailers to sell their products at less than 85 percent of the authorized prices. Legal experts said restricting lower stream dealers' lowest price can be a violation of China's Anti-Monopoly Law, but added that court has the final say regarding the matter.
Dong Hanshui, a Hubei-based optical dealer whose outlets have spread nationwide, said that he resented the big players' arrogance. He said the local industry association repeatedly denied his applications, despite his good standing, because they saw him as a rulebreaker.
In 2003, Dong offered a 60 percent-off discount on Essilor products, while other dealers could offer at most 15 percent off, in line with Essilor's "no more than 15 percent off" policy.
His promotion measures invited bitterness from peer retailers. "They reported Dong's act to Essilor, who immediately suspended supply to me," he said, adding that Essilor rejected his petition on grounds of conducting "malicious competition" with a "price far lower than authorized."
Dong refuted the malicious competition allegation, saying his retail price was "above purchase price" and that he did not mean to defeat fellow dealers.
Other optical dealers admitted the existence of Essilor's price policy and said abiding by the policy was a basic requirement to sell name brand foreign lenses. According to them, lens manufacturers rely on price protection to ensure their profit margin. Also, they said, most retailers would happily follow such policies.
Dong's misfortune did not stop with Essilor's rejection. When he approached renowned Japanese brand Charmant, his cooperation request was quickly rejected. Dong said Charmant asked other wholesalers about his reputation, and they warned Charmant of the risks. "Charmant refunded me all my down payments and said they would not cooperate with me," said Dong.
Industry analysts estimate that China's optical market is worth 30 billion yuan (US$4.84 billion). "Lenses account for half of the market shares. In the lens market alone, foreign brands take up 35 percent," said an industry insider .
Researchers estimate that China has a myopic population of 400 million, a number that is expected to increase by 30 million people every year.
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