Chinese Brand Overview: Moody Colored Contact Lens
Millennials and GenZ are the biggest consumer groups of colored contact lenses in China, and they have very different consumption habits. Older millennials (post-80s) prefer international brands, younger millennials (post-90s) are looking for Korean and Japanese brands, and Gen Z (post-95s and post-00s) have already started purchasing colored contact lenses from up-and-coming Chinese brands such as Moody.
Moody Entered the Industry at the Perfect Time
Like we mentioned in our previous article talking about the beauty industry post COVID , since people have to wear face masks all the time, they don’t feel like doing a full face of makeup nowadays.
People are focusing more on eye makeup, which has driven the increasing popularity of colored contact lenses.
Chinese brand Moody has benefited greatly from the trend. The brand was founded in 2019, and in January 2020, right as COVID hit, it launched a store on Tmall. But as a DTC digital-first brand, this didn’t hurt it. During the 2020 Double 11 shopping festival, the brand achieved over 40 million RMB in sales. Its annual revenue for 2020 was 200 million RMB.
Moody’s Investment Banker Founder Spotted a Hole in The Market
Moody’s founder Ci Ran (慈然) is from the post-90s generation. After he graduated from Cornell University, he began working for J.P.Morgan Chase & Co in 2016. Two years later, he went back to China and kept working in the investment industry.
Ci never expected himself to be an entrepreneur. The turning point came in 2019 when he learned from Tmall statistics that post-90s and post-95s made up almost 70% of online colored contact lens consumption. What’s more, the number of sales, the number of consumers, and the amount per order were all increasing at the growth rates of 31%, 20.9% and 8.4% respectively.
Ci realized this is a promising industry.
Colored Contact Lens Market Was Stagnant
Two other things that helped Ci decide to create Moody was first that he saw the Chinese cosmetics industry rapidly developing and the colored contact lens industry wasn’t keeping up.
In the Chinese contact lens market, there were mainly two types of contact lenses brands. One is traditional multinational optical brands such as Johnson & Johnson. But the big brands lack fashion sense and weren’t keeping up with consumer demand for variety. For example, J&J sub-brand Define only has 5 SKUs in this product category.
The other type is Korean and Japanese brands. Though they are fashionable, they are not comfortable after wearing. They are often sold by individual, unverified sellers on WeChat, which means they don’t have strong safety guarantees.
Ci Ran felt that colored contact lenses were a blank field that no one else had treated seriously before.
Demand is Growing
Second, the number of young Chinese people who are short-sighted is increasing. This is relevant because, according to a report co-published by CBNData and Ali Health (阿里健康), 70% of consumers who buy short-sighted contact lens choose colored ones.
What’s also interesting is that in China, the colored contact lens industry is known for its high repurchasing rate at 30-50%. This means that once you get a new consumer, if you are able to satisfy their needs (often with new designs and comfortable wearing experience) you can quickly have a loyal customer.
Launching Moody
In 2019, Ci resigned from his career as an investor and became an entrepreneur. Since his target audience is Gen Z, he named the brand Moody, which matches Gen Z’s tendency to express their feelings loudly.
From creating the brand, to officially launching a Tmall store, Ci and his team spent one year studying Moody’s target customer behaviours and the contact lens industry supply chain. In addition to the market opportunities identified above, Ci and his team found another – there was a massive lack of daily colored contact lens.
Based on this, they decided to start by creating daily colored contact lenses and tackle that niche first, using them as a window to let more consumers know the brand.
Many brands fail from trying to be everything to no one. Instead, Ci niched down as far as possible.
In January 2020, Moody launched its first collection “HE DOESN’T KNOW” and two months later, amidst the pandemic, its Tmall sales broke 1 million RMB. Five months later, the sales surpassed 20 million RMB.
The name of the collection signified that the aim was to make the colored contact lenses look very natural and suitable for everyday wear. Even though they are colored, they would look so natural that people wouldn’t realize you’re wearing colored lenses.
A Strong Supply Chain is Crucial
In fact, there are many coloured contact lenses brands in China. But why is Moody doing so well? A key reason is the brand’s supply chain which makes moody grows faster and better than its competitors.
Co-founder of moody Cao Biao (曹彪) was a former sales director at Johnson & Johnson and the Chinese director of CooperVision, the world’s second largest soft contact lens manufacturer. Cao has abundant experience in the industry and he is the key person that created a high-quality supply chain for Moody.
Manufactured in Taiwan
The world’s most competitive contact lens manufacturers and most developed supply chains are mostly located in Taiwan. The area makes up half the world’s output. There is a saying that the Korean contact lens supply chain is 5-10 years behind Taiwan’s, and Mainland China’s manufacturing ability is about 5-10 years behind Korea.
One of the issues that those contact lens supply chain providers need to tackle is the management. Even with one color, a contact lens will have more than 10 SKUs with different lens strength. This sets a higher threshold for small brands to enter the market because if they don’t manage the supply chain well, they will need huge storage facilities to hold stock.
Moody’s manufacturer is located in Taiwan and it is also the provider for a few top Japanese contact lens brands. It is the only contact lens factory in Asia that has a fully automatic manufacturing line. Because of this, Moody is able to shorten the production circle of its contact lens to 2 months, and the brand is able to come out with new products more frequently.
Moody is also able to track every step in the production of its contact lens. The manufacturer takes photos at every step for every contact lens box. Once a consumer finds something wrong with their contact lens, Moody is able to figure out at what step the problem occurs. This also helps the brand avoid making the same mistake.
To create a more comfortable feeling for customers, Moody uses a gel material: etafilcon A as its main material. This material is tested to have the best feeling after wearing.
Creating its Own Factory
On top of working with the Taiwanese manufacturer, Moody is creating its own manufacturing facility in Xiamen in Mainland China. The factory is expected to start manufacturing in the middle of 2022 and it will create 20 million contact lenses in the first month.
Moody’s Competitors
As mentioned, other than Moody, there are a few other domestic brands performing very well in this space, such as 4iNLOOK, CoFancy and Kelala (可啦啦). It is estimated that the amount of their financing has surpassed 600M RMB combined. Even Chinese beauty unicorn brand Perfect Diary has joined the industry as well.
It appears others saw the same opportunity that Ci did and now we’ll just have to see who can make the most of this opportunity!
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