Lenskart Business Model: How Does Lenskart Make Money
Lenskart is a leading e-commerce brand specializing in eyewear accessories, from prescription glasses and contact lenses to stylish shades. This Indian brand has revolutionized the way people purchase eyewear. Many innovative features and affordable prices have made Lenskart a popular name in the Indian eyewear market.
Introduction to Lenskart
Lenskart is a direct-to-customer retailer of eyewear accessories, which has expanded its services to offline channels with the introduction of Lenskart stores all over India. The company was founded in the year 2010 by Peyush Bansal, Sumeet Kapahi and Amit Chaudhari. The mainstay of Lenskart is providing its customers with high-quality eyewear products at affordable prices through its online store or physical stores.
Lenskart’s online platform enables customers to browse and buy spectacles, shades, contact lenses, and other eyewear products without the need to go anywhere physically. A host of innovative technological tools, such as virtual mirrors, 3D try-ons, and home eye checkups, have made the process all the more simple for customers.
Apart from a dedicated online portal, Lenskart operates a network of more than 1400 physical stores covering over 175 cities across India. Lenskart attained the status of a Unicorn company in the year 2019.
|Eyewear, e-commerce, store
|Peyush Bansal, Sumeet Kapahi and Amit Chaudhari
|Faridabad, Haryana, India
Lenskart Business Model Explained
Lenskart works on the principle of eliminating middlemen and directly reaching the consumers. The major elements of its business model have been discussed here.
The primary source of revenue for Lenskart is the sales of eyewear products such as prescription glasses, reading glasses, frames, contact lenses, sunglasses, polarized glasses, computer glasses, and more. The company manufactures all its products instead of purchasing them from third-party manufacturers. Consequently, it is not only able to reduce costs but also maintain a firm control over quality.
Lenskart has its in-house manufacturing facility in Delhi. The products ordered by the customers are sourced from the warehouses and directly shipped to the customers, thereby eliminating intermediaries.
Lenskart has a wide network of physical stores covering both metro and tier-2 and tier-3 cities. The physical stores are based on a franchise model. Physical stores have enabled the company to expand beyond e-commerce. The franchise partners of Lenskart are provided comprehensive training regarding products, technological tools, branding strategies, marketing, and more. The dealers must report about the daily operations such as inventory management, customer service, staff activities, and others.
Lenskart charges a fee of Rs. 35-40 lakhs to grant its franchise. In addition, the store is also required to share a certain percentage of its profit with Lenskart as royalty. As per an estimate, a Lenskart store can expect a 13-35% profit with more than 30% return on investment.
Lenskart has developed strategic partnerships with major manufacturers in the eyewear industry. For instance, it collaborates with leading lens manufacturers to develop its line of lenses and sell them under its own brand name. Moreover, the company also partners with major technology companies to provide a plethora of cutting-edge technological features through its online portal.
Lenskart offers a subscription-based service to its customers, which is called Lenskart Gold. Customers subscribing to Lenskart Gold membership get access to a host of exclusive benefits such as discounts on eyewear products, free home eye checkups, free eye tests, and more.
Focusing on maximizing the convenience factor for the customers helps Lenskart reach a newer audience and maintain existing customers, thereby contributing immensely to a steady flow of revenues. For instance, customers can access virtual and home try-on facilities. Virtual try-ons allow customers to check their appearance with different frames on the online platform. Home try-on enables the customers to select up to 5 frames delivered to their homes for a trial period at no extra cost. The customers are free to try the frames to make a decision.
New customers benefit from the first frame for free on their first purchase. The 14-day return policy allowing the customers to return their products if unsatisfied is yet another benefit for the customers.
Multiple Customer Segments
Lenskart serves a wide range of customers with differing needs and budgets. At affordable rates, it caters to customers with vision problems requiring corrective glasses for myopia, hypermetropia, and astigmatism. Customers wanting fashionable sunglasses at reasonable rates also get access to a huge number of options. Fashion-conscious customers willing to spend more get access to a wide range of trendy and designer eyewear options.
Lenskart has established itself as a major player in the Indian eyewear market. The company seeks to expand its production capacity to 5 crore glasses monthly and expand its franchise network to meet increasing demands in the next few years.