[Case Study] Lenskart Business Model: Is it a Loss Making Startup?

Introduction

In today’s digital age, the eyewear industry has witnessed a significant transformation, thanks to companies like Lenskart. With its innovative business model, Lenskart has emerged as a leader in the online eyewear market, revolutionizing the way people buy glasses. This article delves into the Lenskart business model, exploring how the company makes money, its brief history, business model canvas, case study, competitors, and a comprehensive SWOT analysis.

Lenskart Business Model: How Does Lenskart Make Money?

Lenskart has adopted a multi-faceted approach to generate revenue and build a sustainable business. Here are the primary ways Lenskart makes money:

1. Online Sales of Eyewear: Lenskart operates a robust e-commerce platform, offering a wide range of eyewear products, including prescription glasses, sunglasses, contact lenses, and more. Customers can browse through a vast catalog, select their preferred frames and lenses, and complete their purchase online. The company earns revenue through the sale of eyewear products, with a focus on quality, affordability, and convenience.
2. Lenskart Gold Membership: Lenskart offers a subscription-based program called Lenskart Gold, which provides various benefits to its members. These benefits include exclusive discounts, early access to new collections, free eye tests, and priority customer support. The revenue generated from Lenskart Gold subscriptions contributes to the company’s overall profitability.
3. Franchise Partnerships: Lenskart has established a network of franchise partners across different cities and towns. These partners operate physical stores where customers can try on frames, undergo eye tests, and receive personalized assistance. Lenskart earns revenue by partnering with franchisees and sharing a portion of the sales generated through these offline channels.
4. Eyewear Solutions for Businesses: Lenskart also caters to the corporate sector by offering customized eyewear solutions for businesses. This includes providing prescription glasses and safety eyewear for employees in various industries. Lenskart’s B2B services generate revenue by serving the specific eyewear needs of organizations.

A Brief History of Lenskart: Pioneering the Online Eyewear Market

Since its inception in 2010, Lenskart has rapidly grown to become one of India’s leading eyewear companies. Let’s take a glimpse into the key milestones of Lenskart’s journey:

1. Founding Years: Lenskart was founded by Peyush Bansal, Amit Chaudhary, and Sumeet Kapahi in 2010. The trio recognized the untapped potential of the online eyewear market and set out to disrupt the traditional brick-and-mortar eyewear retail model.
2. Online Expansion: Lenskart started as an online platform, offering a wide range of eyeglasses, sunglasses, and contact lenses. With a focus on affordability, quality, and a seamless customer experience, Lenskart quickly gained popularity among consumers.
3. Innovations and Technological Advancements: Lenskart leveraged technological advancements to enhance the eyewear buying experience. The company introduced the “3D Try-On” feature, allowing customers to virtually try on glasses using their computer or smartphone. This innovation bridged the gap between online and offline shopping, boosting customer satisfaction.
4. Omni-channel Approach: Recognizing the importance of physical touchpoints, Lenskart strategically expanded its presence offline. The company opened physical stores, known as Lenskart Offline Studios, across multiple cities, enabling customers to have a hands-on experience with the products and avail of professional eye tests.
5. Lenskart Gold: In 2018, Lenskart launched its Lenskart Gold Membership program, offering exclusive benefits to its members. The program played a vital role in driving customer loyalty and repeat purchases.
6. International Expansion: Building on its success in the Indian market, Lenskart expanded its operations internationally. The company ventured into countries like Singapore, the United Arab Emirates, and the United Kingdom, further solidifying its position as a global eyewear brand.

Lenskart Business Model Canvas: Analyzing the Key Elements

A business model canvas provides a visual representation of how a company creates, delivers, and captures value. Let’s explore the key elements of Lenskart’s business model canvas:

Key Partners: Lenskart collaborates with various partners, including eyewear manufacturers, suppliers, franchisees, and technology providers. These partnerships help Lenskart deliver a diverse range of products and expand its reach.

Key Activities: Lenskart engages in activities such as product sourcing, inventory management, online platform maintenance, retail store operations, marketing, and customer support. These activities ensure the smooth functioning of the business.

Key Resources: Lenskart’s key resources include its online platform, physical stores, supply chain, inventory, technology infrastructure, and human capital. These resources enable Lenskart to deliver its products and services effectively.

Value Proposition: Lenskart’s value proposition lies in providing high-quality eyewear at affordable prices, a seamless online and offline shopping experience, innovative virtual try-on technology, and personalized customer support. Lenskart focuses on customer satisfaction and aims to meet diverse eyewear needs.

Customer Segments: Lenskart caters to a wide range of customer segments, including individuals seeking prescription glasses, sunglasses enthusiasts, contact lens wearers, and businesses requiring customized eyewear solutions. The company serves both domestic and international markets.

Customer Relationships: Lenskart maintains strong customer relationships through its online platform, offline stores, customer support channels, and Lenskart Gold Membership program. The company emphasizes personalized assistance, post-purchase support, and loyalty programs.

Channels: Lenskart utilizes various channels to reach customers, including its website, mobile app, offline stores, franchise partners, social media, and digital marketing campaigns. These channels enable Lenskart to create awareness and drive sales.

Cost Structure: Lenskart’s cost structure consists of expenses related to product sourcing, manufacturing, inventory management, online platform maintenance, retail store operations, marketing, technology investments, human resources, and customer support. The company focuses on optimizing costs to maintain competitive pricing.

Revenue Streams: Lenskart generates revenue through online sales, Lenskart Gold Membership subscriptions, franchise partnerships, and B2B eyewear solutions. The diverse revenue streams contribute to the company’s financial sustainability and growth.

Lenskart Case Study: A Revolutionary Disruption

The success story of Lenskart serves as an inspiring case study in the eyewear industry. Here are some key aspects that make Lenskart a case worth studying:

1. Digital Disruption: Lenskart disrupted the traditional eyewear retail model by leveraging the power of e-commerce and technology. The company introduced virtual try-on, home eye tests, and seamless online purchasing, setting new standards for the industry.
2. Focus on Affordability: Lenskart’s commitment to providing affordable eyewear has resonated with customers. By optimizing costs, streamlining operations, and eliminating intermediaries, Lenskart offers high-quality products at prices significantly lower than traditional retailers.
3. Seamless Online-Offline Integration: Lenskart pioneered the integration of online and offline channels in the eyewear market. The combination of virtual try-on and physical stores allows customers to make informed choices, resulting in higher customer satisfaction and increased sales.
4. Customer-Centric Approach: Lenskart places great emphasis on customer satisfaction. The company’s Lenskart Gold Membership program, personalized customer support, and hassle-free returns have helped build trust and loyalty among its customer base.

Lenskart’s Competitors: Navigating the Competitive Landscape

While Lenskart has established itself as a leader in the eyewear market, it faces competition from various players. Let’s take a look at some of Lenskart’s key competitors:

1. Titan Eyeplus: Titan Eyeplus, a subsidiary of Titan Company Limited, offers a wide range of eyewear products across multiple price segments. With its extensive retail network and brand recognition, Titan Eyeplus poses a significant competition to Lenskart.
2. Specsavers: Specsavers is a global optical retail chain that provides a comprehensive range of eyewear solutions, including glasses, contact lenses, and hearing aids. Specsavers’ strong presence in multiple countries makes it a formidable competitor for Lenskart.
3. GKB Opticals: GKB Opticals is one of India’s leading eyewear retail chains, offering a diverse selection of eyewear brands and products. With its offline presence and established reputation, GKB Opticals competes with Lenskart for a share of the Indian market.
4. Warby Parker: Warby Parker, based in the United States, is renowned for its direct-to-consumer approach and affordable eyewear offerings. Known for its stylish frames and home try-on program, Warby Parker has gained popularity as a disruptive force in the eyewear industry.

Lenskart’s SWOT Analysis: Evaluating Strengths, Weaknesses, Opportunities, and Threats

A SWOT analysis provides valuable insights into a company’s internal strengths and weaknesses, as well as external opportunities and threats. Let’s examine the SWOT analysis of Lenskart:

Strengths:

• Strong online presence and innovative virtual try-on technology.
• Wide range of affordable eyewear options for different customer segments.
• Growing network of offline stores for personalized customer experience.
• Lenskart Gold Membership program driving customer loyalty.
• Expansion into international markets, tapping into global opportunities.

Weaknesses:

• Reliance on third-party manufacturers for product sourcing.
• Limited brand recognition compared to established eyewear brands.
• Challenges in maintaining consistent quality across a vast product range.
• Some customers may prefer the in-person experience offered by traditional eyewear retailers.

Opportunities:

• Growing demand for online eyewear purchases, especially in emerging markets.
• Expansion of Lenskart Offline Studios to reach more customers.
• Partnership opportunities with fashion influencers and celebrities.
• Diversification into related areas like eye care products and services.

Threats:

• Intense competition from both online and offline eyewear retailers.
• Counterfeit products and unauthorized sellers impacting brand reputation.
• Economic factors affecting consumer spending on non-essential items.
• Potential disruption from new entrants and technological advancements.

Frequently Asked Questions (FAQs)

Q1. How does Lenskart’s virtual try-on feature work?

A1. Lenskart’s virtual try-on feature uses augmented reality technology to allow customers to virtually try on glasses frames using their computer or smartphone. By selecting a frame and activating the camera, customers can see how the glasses would look on their face in real-time.

Q2. What are the benefits of Lenskart Gold Membership?

A2. Lenskart Gold Membership offers exclusive benefits such as early access to new collections, discounts on eyewear products, free eye tests, priority customer support, and more. It provides added value to customers and encourages repeat purchases.

Q3. Can Lenskart fulfill prescription glasses requirements?

A3. Yes, Lenskart offers prescription glasses. Customers can enter their prescription details during the ordering process, and Lenskart ensures the lenses are customized accordingly.

Q4. Are Lenskart’s products covered by warranty?

A4. Yes, Lenskart provides a warranty on its products against manufacturing defects. Customers can reach out to Lenskart’s customer support for assistance in case of any issues.

Q5. Does Lenskart offer a return policy?

A5. Lenskart has a hassle-free return policy. Customers can return their eyewear within a specified timeframe if they are not satisfied. However, certain terms and conditions apply, and it’s advisable to review the return policy on Lenskart’s website for complete details.

Q6. Can Lenskart’s eyewear be purchased offline?

A6. Yes, Lenskart has physical stores called Lenskart Offline Studios. Customers can visit these stores to try on frames, undergo eye tests, and receive personalized assistance.

Conclusion: Empowering Vision with Innovation

Lenskart’s business model has revolutionized the eyewear industry, combining technology, affordability, and customer-centricity. Through its online platform, offline stores, Lenskart Gold Membership program, and innovative solutions like virtual try-on, Lenskart has disrupted traditional eyewear retail models. The company’s journey, marked by milestones and achievements, showcases the power of digital transformation in enhancing the customer experience. As Lenskart continues to grow, expand internationally, and navigate the competitive landscape, it remains focused on providing quality eyewear solutions and empowering vision worldwide.