• Thu. Jul 25th, 2024

Lenskart: Revolutionizing the Eyewear Industry-Business Model

ByNishat Manzar

Jun 30, 2024

In a world where approximately 64% of adults require corrective lenses, the eyewear industry plays a crucial role in improving people’s quality of life. Among the many players in this field, one company has stood out for its innovative approach and customer-centric business model: Lenskart. Founded in 2010, Lenskart has transformed the way people shop for eyewear in India and beyond, combining affordability, convenience, and style in a unique blend that has disrupted the traditional eyewear market.

In this comprehensive blog post, we’ll delve deep into Lenskart’s business model, exploring how it makes money, its unique selling propositions, growth drivers, and the challenges it faces in a competitive landscape. We’ll also analyze the company’s strengths, weaknesses, opportunities, and threats to gain a holistic understanding of its position in the market.

Lenskart Business Model: The Genesis of Lenskart

Lenskart was founded by Peyush Bansal, Sumeet Kapahi, and Amit Chaudhary with a clear vision: to make quality eyewear accessible and affordable to everyone. Peyush Bansal, the CEO of Valyoo Technologies (Lenskart’s parent company), brings a rich background to the table. With a Bachelor’s degree in Electrical Engineering from McGill University and management education from IIM Bangalore, Bansal’s journey from a Program Manager at Microsoft to the founder of a unicorn startup is inspiring.

The idea for Lenskart was born out of the founders’ observation that buying eyeglasses in India was often a cumbersome and expensive process. Traditional offline stores offered limited choices at high prices, creating a gap in the market for an innovative solution. Lenskart was created to bridge this gap, offering a wide range of eyewear at affordable prices through an online marketplace.

Lenskart’s Business Model: A Closer Look

At its core, Lenskart operates on a Business-to-Consumer (B2C) model, focusing on direct sales to end consumers. However, what sets Lenskart apart is its innovative approach to combining online and offline channels, creating an omnichannel experience for customers.

Let’s break down the key components of Lenskart’s business model:

  1. Product Sourcing and Manufacturing:
    Lenskart has partnered with major names in the eyewear business to source high-quality frames and lenses at reasonable prices. The company also collaborates with lens manufacturers to create its own branded lenses. This approach allows Lenskart to offer a wide range of products while maintaining control over quality and pricing.
  2. Design and Trend Forecasting:
    Lenskart employs a team of designers and stylists who keep a close eye on the latest trends in eyewear. These designs are then passed on to manufacturers, ensuring that Lenskart’s product range remains fashionable and up-to-date.
  3. Omnichannel Presence:
    While Lenskart started as an online business, it quickly recognized the importance of physical presence in the eyewear market. The company has expanded to over 1,500 omnichannel stores across 175 cities in India, Singapore, and Dubai. This hybrid model allows customers to choose between online convenience and in-store experiences.
  4. Technology Integration:
    Lenskart has heavily invested in technology to enhance the customer experience. Notable innovations include:
  • Virtual 3D try-on technology, allowing customers to see how frames look on their faces online
  • Robotic technology imported from Germany for precise eyewear manufacturing
  • A user-friendly website and mobile app for easy browsing and purchasing
  1. Customer-Centric Services:
    Lenskart offers several unique services to enhance customer satisfaction:
  • Free home eye check-ups
  • “Try at home” service, where customers can choose up to 5 frames to try before purchasing
  • 14-day return policy
  • Subscription-based services like Lenskart Gold, offering exclusive benefits to members

How Lenskart Makes Money

Lenskart’s revenue model is multi-faceted, encompassing several streams:

  1. Product Sales:
    The primary source of revenue for Lenskart is the sale of eyewear products, including frames, lenses, sunglasses, and contact lenses. In the fiscal year 2023, Lenskart’s total revenue, including other income, reached INR 3,927.9 Cr, a significant increase of 142.7% from the previous year.
  2. Subscription Services:
    Lenskart offers subscription-based services like Lenskart Gold, which provides members with benefits such as free eye tests, home eye check-ups, and discounts on eyewear products.
  3. Additional Accessories and Add-ons:
    The company generates revenue through the sale of eyewear accessories like cases, cleaning solutions, and lens wipes. They also offer add-ons such as scratch-resistant and anti-glare coatings.
  4. Franchise Fees:
    Lenskart collects franchise fees from optical retailers that partner with the company, contributing to its revenue stream.
  5. Service Fees:
    The company also earns from fees for training, services, and in-home vision tests.

Unique Selling Propositions (USPs) of Lenskart

Lenskart has carved out a niche for itself in the eyewear market through several unique selling propositions:

  1. Convenience:
    Lenskart offers a seamless shopping experience across online and offline channels. Customers can shop from the comfort of their homes, schedule in-home eye exams, or visit physical stores for a hands-on experience.
  2. Customization:
    The company’s virtual try-on tool and in-store optometrists help customers find the perfect eyewear for their face and style.
  3. Quality:
    Lenskart focuses on providing durable products made from high-quality materials, backed by a generous return policy.
  4. Affordability:
    By managing its supply chain and leveraging technology, Lenskart offers competitive prices without compromising on quality.
  5. Innovation:
    Continuous investment in technology, such as the 3D try-on feature and robotic manufacturing, sets Lenskart apart from traditional eyewear retailers.

SWOT Analysis of Lenskart

To better understand Lenskart’s position in the market, let’s conduct a SWOT analysis:

Strengths:

  1. Vertical integration of the supply chain, allowing for efficient inventory management and quality control
  2. Hybrid retail strategy, catering to diverse consumer preferences
  3. Technological innovation, particularly in virtual try-on and manufacturing processes
  4. Strong brand presence and effective marketing strategies
  5. Customer-centric approach with easy returns and product guarantees

Weaknesses:

  1. Operational challenges in managing both online and offline channels
  2. Reliance on discounts and promotions, potentially impacting profit margins
  3. Intense competition in the eyewear industry

Opportunities:

  1. Growing middle-class consumer base and increased focus on eye health in emerging markets
  2. Expansion of internet access, increasing the potential for online sales
  3. Potential for diversification into adjacent product categories (e.g., high-end eyewear, sports eyewear, smart eyewear)
  4. Untapped market potential in smaller cities and rural areas

Threats:

  1. Regulatory changes affecting online sales or import/export policies
  2. Disruptive technologies potentially altering market dynamics
  3. Supply chain disruptions due to natural disasters, pandemics, or geopolitical conflicts
  4. Risk of counterfeit products damaging brand reputation

The Omnichannel Approach: A Key to Success

Lenskart’s shift from a purely online model to an omnichannel strategy has been crucial to its success. This approach addresses the unique challenges of selling eyewear, a high-involvement product that customers often prefer to try before buying. The omnichannel strategy offers several advantages:

  1. Increased Customer Touchpoints:
    By providing both online and offline options, Lenskart caters to a wider range of customer preferences and shopping habits.
  2. Enhanced Customer Experience:
    The integration of online and offline channels allows for a seamless shopping experience, with customers able to browse online, try on frames in-store, and make purchases through their preferred channel.
  3. Building Trust:
    Physical stores provide credibility and the ability for customers to interact with products and staff, which is particularly important in the eyewear industry.
  4. Data-Driven Insights:
    The omnichannel approach allows Lenskart to gather valuable data on customer preferences and behavior across different channels, informing product development and marketing strategies.
  5. Expanded Market Reach:
    While online channels provide convenience and reach, physical stores allow Lenskart to penetrate markets where online shopping may not be as prevalent.

Growth Drivers for Lenskart

Several key factors have contributed to Lenskart’s rapid growth and success:

  1. Innovative Marketing Strategies:
    Lenskart’s “first frame free” offer and “try at home” service have been instrumental in attracting first-time buyers and encouraging product sampling.
  2. Home Services:
    The introduction of eye checkups by optometrists at home has expanded Lenskart’s reach and convenience factor.
  3. Technological Innovation:
    The development of the 3D facial visualizer has enhanced the online shopping experience, allowing customers to see how frames will look on their faces virtually.
  4. Franchise Model:
    Lenskart’s franchise-based expansion has allowed for rapid growth in physical store presence while sharing risks and rewards with franchisees.
  5. Product Diversity:
    Offering a wide range of eyewear options, from budget-friendly to premium brands, caters to diverse customer segments.

Features That Set Lenskart Apart

Lenskart has incorporated several features into its business model that enhance the customer experience and drive loyalty:

  1. Vast Product Selection:
    With an extensive range of eyewear options, Lenskart caters to diverse style preferences and budgets.
  2. Virtual Try-On:
    The 3D try-on feature allows customers to visualize how frames will look on their faces before making a purchase.
  3. Home Services:
    From eye check-ups to frame try-ons, Lenskart brings convenience to the customer’s doorstep.
  4. Authentic Products:
    Lenskart ensures that all products sold are 100% authentic, building trust with customers.
  5. Flexible Payment Options:
    Options like cash on delivery make purchases more accessible to a wider customer base.
  6. Customer Support:
    Live chat and responsive customer service teams enhance the shopping experience and resolve issues quickly.

Competitive Landscape

While Lenskart has carved out a significant niche in the eyewear market, it faces competition from various quarters:

  1. Traditional Retailers:
    Established players like GKB, Lawrence and Mayo, and Titan Eye Plus continue to hold significant market share, particularly in offline retail.
  2. Online Competitors:
    Specialized online eyewear retailers like Coolwinks and Deals4Opticals compete directly with Lenskart’s online offerings.
  3. E-commerce Marketplaces:
    Major platforms like Amazon, Flipkart, and Snapdeal offer eyewear products, potentially impacting Lenskart’s online sales.
  4. Brand-Owned Stores:
    Manufacturers like Ray-Ban and Essilor have their own online and offline stores, competing for brand-conscious customers.
  5. Local Opticians:
    The unorganized sector, comprising local opticians and small retailers, still accounts for a significant portion of the market, especially in smaller towns and rural areas.

The Challenge Ahead

Despite its impressive growth and innovative approach, Lenskart faces several challenges as it looks to maintain its momentum and expand further:

  1. Market Penetration:
    With organized players accounting for only 9-10% of the INR 18,000-20,000 crore eyewear market in India, there’s significant potential for growth. However, steering customers away from local opticians and building brand loyalty remains a challenge.
  2. Balancing Online and Offline Operations:
    Managing the complexities of both e-commerce and physical retail requires significant operational expertise and investment.
  3. Maintaining Product Quality:
    As Lenskart expands its product range and manufacturing capabilities, maintaining consistent quality across all offerings will be crucial.
  4. Adapting to Changing Consumer Behavior:
    The COVID-19 pandemic has accelerated the shift towards online shopping, but also highlighted the importance of hygiene and safety in physical retail. Lenskart will need to continuously adapt its strategies to meet evolving consumer preferences.
  5. International Expansion:
    While Lenskart has made inroads into markets like Singapore and Dubai, further international expansion will bring new challenges in terms of regulations, cultural preferences, and competition.

The Future of Lenskart

Looking ahead, Lenskart’s future seems bright, but not without its share of challenges. The company’s mission “to give India a Vision” extends beyond just selling eyewear – it’s about revolutionizing how people perceive and purchase eye care products.

Several factors position Lenskart for continued growth:

  1. Market Potential:
    With a large portion of the Indian eyewear market still unorganized, there’s significant room for expansion, especially in tier 2 and tier 3 cities.
  2. Technological Advancements:
    Continued investment in technologies like AI and AR could further enhance the online shopping experience and streamline operations.
  3. Product Diversification:
    Expansion into related categories like smart eyewear or specialized sports eyewear could open up new revenue streams.
  4. International Expansion:
    Building on its success in India, Lenskart has the potential to replicate its model in other emerging markets with similar demographics and eyewear needs.
  5. Focus on Customer Experience:
    By maintaining its customer-centric approach and continuously innovating in areas like virtual try-ons and home services, Lenskart can build long-term customer loyalty.

Conclusion

Lenskart’s journey from a startup to a unicorn is a testament to the power of innovation and customer-centricity in disrupting traditional industries. By combining technology, convenience, and affordability, Lenskart has not only created a successful business but has also played a significant role in making quality eyewear more accessible to millions of people.

The company’s omnichannel approach, focus on customer experience, and continuous innovation set it apart in a competitive market. While challenges remain, particularly in terms of market penetration and operational complexities, Lenskart’s strong foundation and clear vision position it well for future growth.

For aspiring entrepreneurs, Lenskart’s story offers valuable lessons in identifying market gaps, leveraging technology, and putting the customer at the center of business strategy. As the company continues to evolve and expand, it will be fascinating to watch how it shapes the future of the eyewear industry, not just in India but potentially on a global scale.