Lenskart Business Model: How Does Lenskart Earn Profit?

Lenskart is one of the leading eyewear companies in India, known for its innovative business model and wide range of products, including spectacles, contact lenses, and sunglasses. Founded in 2010 by Peyush Bansal, Lenskart has transformed the way Indians buy eyewear. It began as an online platform and has grown into a well-recognized omnichannel brand with physical stores across the country. The company is known for offering high-quality eyewear at affordable prices, backed by a unique blend of technology and customer-centric services.

Let’s explore Lenskart’s business model and how the company earns profits in a competitive market.

Lenskart’s Business Model: A Blend of Online and Offline

Lenskart operates on a D2C (Direct-to-Consumer) model, offering products directly to customers without relying heavily on middlemen. This gives Lenskart greater control over its supply chain and pricing, allowing it to maintain competitive prices in the market.

1. Online Platform: Lenskart started as an online eyewear store, offering customers a convenient way to buy spectacles, sunglasses, and contact lenses from the comfort of their homes. The online platform offers a wide range of products, including prescription glasses, fashion eyewear, and daily wear lenses. Customers can easily browse the website or app, select products, upload prescriptions, and get them delivered to their doorstep.

2. Physical Retail Stores: Over time, Lenskart expanded its presence with offline retail stores across major cities in India. These stores allow customers to try on glasses, consult with optometrists, and get their eyes tested before making a purchase. By combining online and offline channels, Lenskart has built a successful omnichannel model that caters to both tech-savvy online shoppers and those who prefer in-store experiences.

3. Technology Integration: Lenskart is heavily reliant on technology to enhance customer experience. It offers a 3D Try-On feature on its website and app, which allows users to virtually try on different styles of glasses using their smartphone or laptop camera. This feature has made it easier for online customers to choose the perfect frame without visiting a store. Additionally, Lenskart uses advanced algorithms to recommend products based on customer preferences, ensuring a personalized shopping experience.

4. Home Eye Check-Up Service: To reach a wider audience, Lenskart introduced a home eye check-up service. Trained optometrists visit customers at their homes, conduct eye tests, and recommend suitable products. This service is especially popular among people who are unable to visit stores due to time constraints or health issues. The convenience of getting an eye check-up at home adds another dimension to Lenskart’s customer-centric business model.

Key Components of Lenskart’s Business Model

1. Vertical Integration: Lenskart has full control over its supply chain, from designing and manufacturing to retailing. This vertical integration allows the company to reduce costs, improve efficiency, and maintain consistent quality across its products. Lenskart manufactures its products in its own factories and then distributes them through its online and offline channels. By cutting out middlemen, Lenskart is able to offer eyewear at competitive prices, making it affordable for a large section of the population.

2. Subscription Model: Lenskart has introduced a subscription service called Lenskart Gold, where customers can pay a yearly fee to receive exclusive discounts, buy-one-get-one offers, and access to special deals. This subscription model helps the company create a steady stream of recurring revenue and foster customer loyalty. Customers are encouraged to renew their memberships, ensuring repeat business for Lenskart.

3. Private Label Products: Lenskart sells both well-known international brands and its private label products. Private labels like John Jacobs and Vincent Chase offer high-quality eyewear at lower prices. Since Lenskart owns these brands, it enjoys higher profit margins on private label products compared to third-party brands. This strategy allows Lenskart to keep its prices competitive while ensuring good profitability.

4. Franchise Model: Lenskart has also adopted a franchise model to expand its physical presence across the country. By partnering with franchisees, Lenskart has been able to open stores in smaller cities and towns. This model allows the company to reach a broader customer base without bearing the full cost of expansion. The franchise stores follow the same standards as company-owned stores, ensuring consistency in customer experience.

How Lenskart Earns Profit

Lenskart generates revenue through multiple streams, which have allowed it to build a sustainable and profitable business. Here’s a breakdown of how the company earns profit:

1. Product Sales: The most obvious source of revenue for Lenskart is the sale of eyewear products, including prescription glasses, contact lenses, and sunglasses. Customers can choose from a wide range of products, and Lenskart earns profits from both online and offline sales. Its competitive pricing, coupled with the convenience of online shopping and physical stores, attracts a large customer base.

2. Private Label Products: As mentioned earlier, Lenskart’s private label products contribute significantly to its profitability. By selling in-house brands like John Jacobs, the company is able to keep the entire margin from the sale, unlike third-party brands where a portion of the sale goes to the manufacturer. Private labels have helped Lenskart boost its overall profit margins.

3. Subscription Revenue: Lenskart’s Gold membership program adds an additional stream of revenue. For a nominal yearly fee, customers can enjoy exclusive offers and discounts. This subscription model not only creates a consistent flow of income for Lenskart but also increases customer retention, as members are more likely to make multiple purchases throughout the year.

4. Eye Check-Up Services: Lenskart earns revenue from its home eye check-up services, where customers are charged a fee for eye tests conducted at home. This service has become increasingly popular, especially during the pandemic, as people prefer the convenience and safety of getting their eyes tested at home. The eye check-up service adds value to Lenskart’s offerings and contributes to its overall revenue.

5. Franchise Fees: Lenskart’s franchise model helps it expand its physical presence without bearing the entire cost of opening new stores. Franchisees pay an initial fee and share a portion of their revenue with Lenskart. This model allows the company to earn profits from its franchise partners while expanding its brand reach across India.

6. In-Store Promotions and Add-On Sales: Lenskart’s physical stores often run in-store promotions and offer add-on products such as lens cleaners, cases, and accessories. These additional sales help increase the average order value, contributing to Lenskart’s profitability. Promotions like buy-one-get-one or discounts on specific brands also drive foot traffic to stores, boosting overall sales.

Challenges and Future Growth Opportunities

While Lenskart has grown rapidly, it faces challenges such as:

• High competition from other eyewear brands and online platforms.
• The need to maintain consistent customer service across online and offline channels.
• Scaling operations in smaller towns, where the purchasing power and demand for premium eyewear may be lower.

However, Lenskart also has tremendous growth opportunities, especially as more Indians become conscious of their eye health and opt for stylish eyewear. The growing demand for blue light-blocking glasses, especially with the increase in screen time, and the expanding middle class, presents significant potential for further growth.

Conclusion

Lenskart’s success lies in its ability to merge the convenience of online shopping with the personal touch of physical stores. With its customer-focused approach, use of technology, and emphasis on affordable yet stylish eyewear, Lenskart has built a robust business model. Through a mix of product sales, private labels, subscription services, and home eye check-ups, Lenskart continues to earn profits and strengthen its position as a market leader in India’s eyewear industry.