2014 was a year of growth for the Italian eyewear industry, but only thanks to exports, which have leapt from 70 to 90 percent of the total production in the last few years. The industry's turnover grew last year by 9.4 percent to €3,171 million, with sales outside Italy rising by 11.8 percent to €3,110 million.
The domestic market continued to suffer, with purchases from Italian optical stores down by 3 percent. The demand from Italian opticians has been shifting to lower-priced products, as shown by the 13 percent increase in imports to a value of around one billion euros, with 69 percent of that coming from Asia. Italy's trade balance for eyewear is nonetheless ultra-positive. It improved by 11 percent to over €2 billion.
The few relatively large Italian eyewear chains that have their own label are starting to turn around, but many independent stores are still in a critical situation. For 2015, the Association of Italian Eyewear Manufacturers, Anfao, foresees an improvement in the Italian economy and consequently in the eyewear market, thanks to factors such as lower energy costs, a more favorable exchange rate for Italian producers, and more growth-oriented European and national economic policies.
The Italian industry's exports began to grow strongly in the second half of last year due to three major factors: the upturn in the global economy, led by the U.S., the fall in oil prices and the reduction in the value of the euro against the dollar. For the Italian eyewear industry, the structural consequences were a certain stability in the number of companies operating in the sector. They stood at a total of 868 at the end of the year, with the demise of a few firms that were already on shaky ground compensated by the arrival of newcomers that are focusing on niche markets and luxury products. The total workforce in the sector increased by 2.3 percent to a total of 16,195 people.
The most interesting phenomenon was the emergence of a new “reshoring” trend, with several Italian companies that had moved their production offshore choosing to bring it back to Italy, for various reasons including the rising labor costs in China. The trend has concerned mainly the larger players. Even some foreign companies have opted for the quality of Italian production, which can help them to generate higher profits because they can charge higher prices when using the “Made in Italy” label.
Italy remains the world's second-largest exporter of eyewear after China. According to Anfao, it has a market share of around 23 percent in global exports of sunglasses and frames, estimated at around €13.9 billion. Anfao claims that its share rises to 70 percent when it comes to the premium segment of the market. Last year, Italy had global market shares of close to 30 percent for sunglasses and 20 percent in optical frames.
In terms of volume, Italy exported around 94 million pairs of glasses in 2014, up by around 2 percent from the previous year. Some 61 million pairs were sunglasses and 33 million were prescription frames, representing respectively 66 and 34 percent of the total volume. The disparity in the growth rates in value and volume is indicative of major increases in average export prices.
The 11.8 percent growth in exports resulted from sun and prescription eyewear in almost identical measures, with sun eyewear up by 11.7 percent to over €2billion and frames up by 12.0 percent to around €974 million.
In terms of geographical distribution, some 97.7 percent of Italy's exports went to other European countries, North America and Asia. The rest of Europe took 50 percent of the total export turnover, up by 12.7 percent overall, with sun eyewear up by 13.0 percent and frames up by 12 .3 percent. Asia took 17.7 percent of the total, and gave a brilliant performance in 2014 with a 15 percent hike, mainly due to a 16 percent rise in East Asia. Exports to Africa were up by 14.7 percent.
The Americas' share in 2014 was just short of 30 percent, with sun and prescription eyewear together up by 9.6 percent. Within the region, North America clocked up the highest increase at 12.7 percent. In the U.S. - the largest single destination with a share of 23 percent - the combined sun and prescription sectors of the Italian industry grew by 13.3 percent. Sun eyewear once more led the way with growth of 15.1 percent, though frames also did well with a rise of 8.6 percent.
In Europe, France, Germany and the U.K. kept their lead. Exports to Germany and the U.K. jumped by more than 20 percent last year. Sales in Germany went up by 28.3 percent, with frames recording slightly higher growth than sunglasses. In the U.K., sales increased by 23.7 percent, including a 36.1 percent jump for sunglasses. Sales to France grew by 6.7 percent, with sunglasses scoring better than frames.
Some markets that were struggling in 2013 gained considerable ground, with Greece up by 15.1 percent, Portugal by 13.1 percent and Spain by 8.2 percent. Only 2 percent of Italy's exports go to Northern Europe, but sales in the region enjoyed strong growth rates last year: up 16.9 percent for Sweden, 16.5 percent for Norway and 28 percent for Finland.
Elsewhere around the world, Italian exports grew by 27.6 percent in Japan, driven by sunglasses, by 20.6 percent in South Korea and by 11.7 percent in Brazil, but they fell by 16.8 percent in Russia. Italy's exports to China recorded the highest growth rate last year, up by 178 percent, while Israel had the lowest growth at 10.1 percent.
Among the emerging markets, alongside the BRIC countries we now have the so-called STIM group of countries – South Africa, Turkey, Indonesia and Malaysia - that are coming on strongly. Vietnam, Burma, the Philippines and Chile are following on their heels. The African continent as a whole will then no doubt have its turn. Among the emerging countries, both China and Brazil now take 2 percent of Italian eyewear exports each, while Poland and India each take a 0.5 percent share.