In the summer of 2015, Peyush Bansal, Founder & CEO of Lenskart Solutions Pvt. Ltd., which calls itself “India’s largest online optical store”, took an unusual step for a company that was slowly being recognised as one of the success stories in the Indian e-commerce space. Lenskart also started operating through brickand-mortar stores. “We were tired of blindly spending ad money on online activities,” says Bansal. “Besides, there was a growing demand from customers that they wanted to experience the eye testing and eyecare experiences offline.”
Today, Lenskart operates through 240 franchisee stores in 80 cities, apart from continuing to have a strong online presence. It is one of the largest sellers of eyeglasses, contact lenses, sunglasses and eyewear accessories in this part of the world. Encouraged by the results from its offline foray, it plans to open 15 new such stores every month, mainly in tier-1 and tier-2 cities. The idea is to reach a target of 1,000 stores within the next few years. By June 2018, half of Lenskart’s revenues are expected to flow in from its brick-and-mortar stores.
There is a logical synergy between the two models – the offline shops also enable within their geographical areas, the delivery, service and return of Lenskart products. But the biggest gain is that in many cases, the offline stores allow customers to experience products before purchasing them online. Thanks to this dual approach, Lenskart products are now available across a broad spectrum of channels: the desktop, mobile phone, hypermarkets, high streets, malls and hospitals, among them.
Like the close mesh between its online and offline models, Lenskart has thrived on the back of similar strategic moves. Some time back, it tied up with UpGrad, which operates an online education platform for working professionals. Under the programme, Lenskart provides three month long scholarships, each costing Rs. 50,000, to 50 potential entrepreneurs. The selected candidates are chosen for possible synergies they might bring to the optical giant’s business model later on. But perhaps the company’s smartest manoeuvre has been the introduction of a `at home’ eye check and prescription glasses sale facility.
THE SAVVIEST MOVE OF ALL
Peyush Bansal was inspired by pathology laboratories to start the Lenskart Home Eye Checkup service after noticing that many online visits were not being converted into sales. “Many people were not sure if they would get the right power for the lenses if they ordered online. And most of them first wanted to physically try out the frames,” says Bansal. Customers first register online for a home eye test. A Lenskart optometrist arrives at home with a computerised test kit. Along with him is a salesman with a wide range of frames. Even while the two are around, customers also have the option of ‘virtually’ trying out hundreds of frames on the Lenskart app. Once the order has been placed, it can be tracked in real time. The service makes immense business sense for the company. Lenskart will later be able to expand its reach faster to tier-2 and tier-3 cities without locking up funds in expensive property. This service is currently available in Delhi, Mumbai, Bangalore, Kolkata, Hyderabad, Chennai and Pune.
Going ahead, in the coming years, 25 per cent of the revenues are expected to be generated by the Lenskart Lite app. Smaller in size when compared to the company’s main app, the Lite app was launched to cater to customers in tier-3 and tier-4 towns. The users here typically face network connectivity problems. The new app also works on economical smartphones that does not hog up too much of memory space. All these clever moves have helped Lenskart gallop at a fast pace. It closed the financial year ending March 2016 at Rs. 160 crore. This financial year (ending March 2017) is expected to be much better, with revenues more than doubling to Rs. 350 crore. What’s more, Bansal reveals that Lenskart will turn profitable next year.
A hawks-eye focus on costs will make it much easier to achieve the target. Lenskart sells other people’s brands. But around 90 per cent of its revenues comes from its own brands. So it does not have to pass on sale profits to other players. Having its own production facilities also helps. Lenskart products are now manufactured at two units totally spread over 50,000 sq ft at Okhla in East Delhi. A third unit spread over 150,000 sq ft is coming up nearby.
The staggering financial and other numbers reveal a clear-cut, winning game plan. Last year, Lenskart catered to 750,000 customers. Within the next five years, this figure is expected to leapfrog to 4 million. It is now delivering 150,000 spectacles a month to Indian consumers. Its grand vision: to deliver 1,50,000 in a day over the next five years. All this will be possible thanks to the company’s focus on local manufacturing backed by cutting-edge technology. One example: the installation of robotic technology that increases the productivity level to be able to make four pairs of spectacles glasses in just under a minute.
Around this time last year, Lenskart was valued at Rs. 1500 crore. Two years after being set up, it was able to attract funding from IDG Ventures. Since then, many other venture capital firms have opened their purse strings and totally released Rs 750 crore for the optical player, including IFC, Adveq, TR Capital and TPG Growth.
In addition, the investment companies associated with some of the marquee names of the Indian business world like Ratan Tata, Azim Premji, Infosys co-founder Kris Gopalakrishnan and Ronnie Screwvalla have given the thumbs up to Bansal’s foray. Screwvalla’s Unilazer Ventures owns 19 per cent of Lenskart.
But Lenskart was not Bansal’s first brush with entrepreneurship. After passing out from McGill University, Canada, in 2006 (Bachelors of Engineering Honors, Electrical-IT, Control & Automation), Bansal had worked for a year at the Microsoft headquarters in Redmond, Washington. He also completed his Management Programme for Entrepreneurs & Family Businesses (MPEFB) from IIM, Bangalore.
In December 2007, he founded SearchMyCampus.com, India’s first online campus classifieds portal before launching Lenskart in November 2010. Along the way Bansal had also floated Jewelskart.com, Bagskart.com and Watchkart.com. But he killed the three e-com sites two years ago to focus on Lenskart.
Two challenges Indian start-ups often face are getting the right talent and managing them. Bansal says that right from the outset, he did not want to compromise on building the right team. Towards this end, he focused on getting talented yet motivated people. As far as managing them was concerned, Bansal says that is never a problem in the initial stages of any venture. “On the whole, there is very good teamwork. People are all geared up to give off their best.”
Bansal admits to being a very hands-on manager in the initial phase of Lenskart’s growth. But over the years, he has delegated most of the responsibilities to his senior managerial team. He has a lesson for budding entrepreneurs who believe in taking the long term view.
“Just focus initially on making your name in the market,” he says. “It is tricky. You keep asking yourself: am I on the right path?” It is only once you are all set that you start talking about core values, he adds. In the case of Lenskart, the company’s USP has been to “provide the highest quality spectacles at the best possible price.”
That Lenskart is on a winning track is borne out by market figures. Nearly half the population (530 million Indians) need vision correction. But only 170 million have them. According to a company statement, Lenskart was founded “with a vision to revolutionize eyewear in India. Our mission since our inception has been to create enthusiastically satisfied customers all the time.”
At least till now Lenskart has been reading the customer pulse right and has been making the right business moves. The company and its founder are clearly here for the long term. Further proof is evident in one of the proclaimations on Bansal’s LinkedIn page: `Looking to acquire young start-ups.’