Saturday, June 15, 2013

Lenskart.com-the next flipkart of eyecare?

I ordered my new pair of spectacles online from www.lenskart.com after the old one broke. It had lived its life of 3yrs and getting a new one is difficult logistically since I get only weekends free and hardly any opticians shop near where I stay, so finally decided to give online shopping a try, and I was not disappointed. My review below of lenskart, but this post is more on the business model,
http://www.mouthshut.com/review/Lenskart-com-review-tulortuqrr

What do I mean by 'flipkart of eyecare'? Well, flipkart to me means speed, reliability(no cancelled orders), polite and prompt customer service and (till recently) deeply discounted rates passing on cost savings. All these seem true for lenskart.com as well. 

For some background, I read articles about them and founder Peeyish Bansal in Business Today and Economic Times. He is not a first time entrepreneur, in fact he had set up e-commerce ventures earlier in the USA and India in education and eyewear i.e searchmycampus.com) and Flyrr.com. However, due to logistics issues and economic conditions, his focus shifted away from them to Lenskart.In November 2010, he set up Lenskart.com, starting with contact lenses. In February 2011, he included eye-glasses and in March, sunglasses as well.  As per an Apr12 article in Business Today, Lenskart now gets about 45,000 visitors every day, of whom about 400-500 spend an average Rs 1,200 on ordering contact lenses, spectacles and eye accessories, and an expected FY12 topline of Rs 15-20 crore.

Lessons I could glean for this success[I call it success from the customer front, not so sure about the profitability but considering this is his 2nd venture, it should be profitable]
  1. Second time venture, so lessons learnt:-Logistics/customer service probably excellent due to this. Advertising on Facebook is also a good way to tap customers. 
  2. Tapping into an imperfect unorganized sector:-Like how www.redbus.com found its niche in bus travel, they found theirs in eyewear, which saw entry of retail chains like Reliance and Titan only recently. As per ET article, optical shops typically sell frames even at 100-200% margins and an average person has no idea what a frame actually costs. “A frame that’s priced at Rs 5,000-6,000 in a store actually costs only Rs 2,000. Also, rates vary as per area, unlike e-commerce, so thats a perfect way to make the market efficient.
  3. Huge scope yet information asymmetry:- Almost one-third of our population has a vision correction problem and off these, only 25% use any kind of eyewear. The market in India is worth around $2 billion, growing at 25-30%. People usually trust their optician to prescribe something within their budget, but that is far from ideal. Online purchasing makes it transparent with his buying guide, risk free returns, and 'Try on your face'. Also, with use of smartphones and laptops increasing eye-strain, the market potential only goes up
  4. Savvy HR policy:- As per Business Today article. LensKart, for instance, has strict rules against poaching. Candidates are employed only if they have not changed jobs frequently in the recent past, and are not offered more than a 15 to 20 per cent hike over their existing salary. This ensures they do not pay too much for talent which quits soon. 
  5. Excellent customer service:-Be it instant chat on website, SMS asking whether satisfied or not, prepaid returns label for BlueDart and returns form, procedures are very streamlined.
  6. Great logistics They handle it in-house via EComExpress, which is quite responsive too, they accepted my request to deliver at residence quite easily, and followed up professionally. 
  7. Great offline ideas like 'Home Try-On', tieup with opticians etc, so they do not ignore the offline sector as well or the importance of physical customer connect.
  8. Spreading common costs like logistics across multiple verticials:- Bansal has launched three more websites, each of which, like Lenskart, aims to become the category leader on the net. While Watchkart and Bagskart were launched last year, Jewelskart went online in January. Valyoo’s investor seems to approve of the strategy. IDG Ventures MD TC Meenakshisundaram says that Valyoo focuses on creating category leaders in product segments where supply chain inefficiencies lead to high costs. Also, synergies arise from giving customers a coupon book to use for the other websites as well, I got coupons 'worth' Rs 2,000 with my eyeglasses.
  9. Getting domain names efficiently:-LensKart/WatchKart/BagsKart/JewelKart all convey their name at a glance, and probably save plenty of advertising dollars. 
Will be interesting to see how they progress. 


4 comments:

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