Contact lenses do more than simply restore 20/20

China's cosmetic contact lens market is rapidly growing, with domestic players on the rise as consumers pay increasing attention to appearance.

Lu Yiyi, a 29-year-old white collar worker in Beijing, has a small drawer specifically used to store her cosmetic contact lenses. The dozens of boxes of lenses are carefully categorized by color, brand and diameter. Apart from US, European, Japanese and South Korean brands, domestic brands are gradually taking a share in Lu's assortment.

"I have begun to turn to domestic cosmetic contact lens companies as I find such Chinese products are improving," she said.

Lu is among the millions of cosmetic contact lenses consumers in China. Data from Beijing-based investment company Cyanhill Capital showed that in 2020, China's sales revenue of cosmetic contact lenses totaled 20 billion yuan ($3.1 billion), with a compound annual growth rate of 41 percent between 2016 and 2020. Compared with the 30 percent market penetration rate in some developed countries, China's penetration rate for cosmetic contact lenses was merely 7.5 percent, demonstrating its huge growth potential.

Intelligent information platform MobTech estimated that by 2025, China's cosmetic contact lens market will reach 50 billion yuan. China is expected to become the top cosmetic contact lens market by that year.

Industry experts said that cosmetic contact lenses not only solve the problem of myopia, but also visually enlarge eyes and make them appear brighter. In the pandemic era, when people have to wear face masks and eyes are often the only part of faces visible, females place more importance on eye makeup and the wearing of cosmetic contact lenses.

Amid this trend, domestic brands are gaining increasing popularity. During last year's Double Eleven shopping festival, the Tmall flagship store of Shanghai-based cosmetic contact lens company Moody, which was founded in January 2020, sold nearly 40 million yuan worth of cosmetic contact lenses. In 2020, its gross merchandise volume surpassed 200 million yuan. Less than one year after opening shop, the GMV of Beijing-based cosmetics contact lens company Cofancy also surpassed 100 million yuan. Its bestselling product set a record of 100,000 unit sales in just one minute during last year's Double Eleven shopping spree.

Due to their increasing popularity, investors are also favoring homegrown brands. In May 2020, Cofancy received an investment of over 10 million yuan. Five months later, Shantou, Guangdong province-based Kilala announced an investment of nearly 100 million yuan. In February, Moody completed two rounds of investment, with a total amount of 380 million yuan. In March, Shanghai-based 4iNLOOK completed an investment worth of 100 million yuan.

Industry experts said that just like homegrown cosmetics brands, domestic cosmetic contact lens companies are good at taking advantage of marketing strategies to quickly grab market share.

They invite key opinion leaders on online content platforms, such as Xiaohongshu, Douyin and Bilibili, to recommend cosmetic contact lenses to consumers. The KOL sharing cultivates user consumption habits and sense of beauty, encouraging them to buy products.

Brands also invite celebrities to be spokespersons of cosmetic contact lenses as these well-known cultural figures help direct online traffic to products, and fans tend to trust their idols' choices.

Meanwhile, they use intellectual property and co-branding to build up brand cachet. From artists such as Claude Monet and Alphonse Maria Mucha to cartoon characters Pretty Guardian Sailor Moon and Chi-bi Maruko, companies put the IPs on the cosmetic contact lenses packages to attract consumers. Moody teamed up with South Korean popular IP Line Friends, while 4iNLOOK cooperated with Hello Kitty, winning the hearts of consumers.

However, behind innovative marketing strategies are rising costs. Chen Yu, founder of 4iNLOOK, said during an interview with online finance media Caijingtuya that the gross profit rate of OEM players is around 30 percent.

Consumers are paying over half the price for KOLs, spokespersons and IPs, market insiders said.