Disruptive Brands. The verdict on Lenskart’s vision: the eyes have it!

Reading the newspaper one day in late 2010, Peyush Bansal was struck by an intriguing bit of news. A report said that three out of four Indians who needed spectacles for corrective vision did not, in fact, go in for them.

On reading this, Bansal’s business instincts went into overdrive. Why, he wondered, did even those who needed them not wear spectacles?

“It started with India being underpenetrated in the eyewear space,” recalls Bansal.

“We realised that the quality of products was poor and we wanted to make it better, add an aspirational element, and make it fashion-oriented. So we created our own brand with a range that people would love.”

Thus was born Lenskart, an online marketplace for eyewear, which has gone many a mile to break down ‘buyer resistance’ and exorcise the nerdy eyewear look and trade it for something that borders on the fashionable.

Bansal, CEO and co-founder of Lenskart, says he started off with the realisation that if he could make eyewear easily accessible, reasonably priced and trendy, a big market would open up. Lenskart went live in 2011; today it has a manufacturing capacity of 5,000 pairs of spectacles a day, which it hopes to ramp up to 30,000 pairs a day. So successful has the brand been that marquee investors have been lining up virtually every year to buy into the company.

Before Lenskart was born, the eyewear market was largely unorganised, dominated by mom-and-pop stores, with only a handful of big brands. And it was a commoditised market: gawky reading glasses could be bought off the pavement for ₹50.

The ‘buyer resistance’ that Bansal noticed was spawned in large parts by inertia about going to an optometrist; it just seemed easier to get by with less than 20x20 vision than face the perceived ‘hassle’ of getting off the couch!

Bansal used technology to break through that inertia. “Our business model was disruptive because nobody in the industry had worked backwards to check what the consumers wanted,” he says. “We introduced the home eye check-up programme.”

For a nominal fee of ₹100 (even which is adjusted against an eventual purchase), customers can register online for a home eye test and set up an appointment; a qualified Lenskart optometrist turns up with a snazzy computerised test kit.

A salesman in tow showcases frames on the spot, and in almost every instance, once a prescription is made out, an order is placed immediately.

Lenskart also uses biometric technology to perfect the process. Numerous photographs are taken to determine the contours of a customer’s face, and frames are matched and lenses are ground to precision.

Harnessing technology, Lenskart also goes that extra mile to allow customers to ‘virtually’ try out various kinds of frames from the comfort of their couch. “We worked on creating a virtual-reality ecosystem as we realised people are otherwise not able to try many frames,” says Bansal.

On the Lenskart app, cusomers can use their camera phones and try out more than 10,000 frames. To procure the lenses, a user just has to upload the prescription: Lenskart’s robots will create the perfect pair of glasses.

“Ours is India’s first automated, robotically run lab to make glasses. The precision is ten times better,” claims Bansal. And the company’s 14-day money-back policy helps customers overcome their inhibitions about buying online.

Another area in which Lenskart has effectively changed buying behaviour is by promoting the idea that you need occasion-specific frames and spectacles. Frames in different colours, varying shapes: a formal pair for office, a casual pair for when you’re louging at home, a third pair for that night out…

“We made eyewear fashionable and not a medically-run business,” says Bansal, whose company offers private-label solutions for ophthalmic and sun eyewear as well as contact lenses.

While Lenskart also sells other brands, 95 per cent of its revenues come from its own brands. That’s because Lenskart’s products are at least 50 per cent cheaper than other brands.

“We procure our own material and manufacture the products. About 70 per cent of our SKUs (stock keeping units) are cheaper than other brands,” says Bansal.

Since sales are done online, there are no intermediaries eating into the revenue. Economies of scale also kick in. “We are centralised, manufacturing in Delhi only, and not at multiple locations,” Bansal notes.

All this, and the many rounds of investment from private equity firms, have given Lenskart the muscle to expand rapidly. So far, it has secured investments from IFC (the World Bank’s venture capital arm), TPG Growth, IDG Ventures, Unilazer Ventures, and Adveq. Premji Invest pumped in about ₹200 crore in September.

“In the early years, it was difficult to convince investors, but after the first two rounds, our numbers spoke for themselves,” says Bansal.

Right now, Lenskart is growing at over 100 per cent annually. “We are profitable, but not at the EBITDA level, as we are investing in technology. Our path to profitability is clear: in a year from now, we will be EBITDA-level profitable,” he says.

More recently, the company has opted for a hybrid model – by setting up 250 offline stores in less than two years. Bansal points out that about 50 per cent of Lenskart’s customers are repeat buyers.

Arvind Singhal, chairman and MD of advisory firm Technopak, says the online-offline presence is a powerful combo. “They are vertically integrated and have their own lens-making facility. That gives them quality control,” he adds.

Singhal, however, reckons that Lenskart has not invested much in branding itself, which is a prerequisite for securing a larger customer base. “They are competing with mom-and-pop stores; they have to build a loyal customer base,” he notes.

Bansal concedes that his business has its own set of challenges. “Good execution and ensuring that the brand is liked are the two important challenges,” he says. Moreover, copycat players are bound to come up. “But in the end, it’s all about execution. We can’t slow down. There is a lot more to do,” he adds.

Bansal and Lenskart have come this far on the strength of the founder’s vision. So long as they can continue to light up customers’ eyes with value-for-money deals, Lenskart can be sure of continued success.

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