Seeing The Right Proposition
Lenskart has changed the way people buy eyewear.
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While working at Microsoft as a Product Manager Peyush Bansal got an overdose around consumers spending hours and hours with them on how to make their life incrementally better. That excitement made Peyush think about making life revolutionary better, which turned out to be his entrepreneurial moment. Today his company Lenskart has changed the way people buy eyewear. Bansal shares how franchising has supported the growth of this eCommerce giant.
From closing Bagskart, Watchkart and Jewelskart, what led you to focus on Lenskart?
The opportunity in eyewear was surprising us again and again. The problem, which we are solving, is attempted by nobody. Moreover, we saw that trend coming along our way. And we didn't want to be distracted. It was not about other businesses not making money. It's about keeping focus on where are we creating maximum value for consumers.
How has been the growth with Lenskart?
Right now, we are the largest in eyewear in online plus offline. We are shipping close to 5,000 specs a day. Offline, we have about 150 stores. They are all franchised. The way it works is people actually go to stores, they can have a look at our range and they can book orders with us online and then we ship the specs to them. That has turned out to be a beautiful opportunity. Average store size would be about 300-400 sq. ft. which is half the size of a typical optical store. It works really well in terms of branding and conversion.
You have achieved expansion at a fast rate. How did it happen?
We don't make any specs at the store. Typical businesses have to worry about larger spaces, inventory, fitting equipment, eye-testing guy, etc. But in our case, you don't have to worry about; you are just assisting people to place orders online. You just have to do all the work centrally. Every month we are opening 12-15 stores. We are in around 55 cities.
What's keeping the franchise hooked?
The brand is there, consumption is there, the product is 10 times better with 10 times lower price. The moment a franchisee opens a store, customers flood in. Franchisee are making money, their ROI is much higher. We give 60-70 percent ROI every year versus a 8-9 percent they would get in a bank. We tell them go ahead and we will support you. One of our customers became our first franchise. More than 50 percent of our partners are those who were not businessmen.
Is the manufacturing done in-house?
One thing we don't like to risk is manufacturing. Our investment in our manufacturing plant is highest that anybody has ever done in the Indian optical space. It's about Rs 60 crore. We never shied away from investing in our backend infrastructure. The frames that you get are designed by us. But they are not made by us, they are made in China, Italy and Korea. The lens, on the other hand, is manufactured by us. The cutting of lens and putting it in a frame, I do myself.
Tell us about the funding.
There is IDG. We have our early day investors till date. Ronnie Screwvala is a great partner, mentor and friend. I met him when I was looking to raise Series B. We have raised $22 million from TPG. We have begun talks for raising another round.
What is your main challenge at this stage?
I think finding great people are one of the most challenging parts. It takes years to build the right team. Organizations are seldom built by an entrepreneur. I haven't even opened a single store. I have not even visited more than 10 percent of my stores. I should have enough faith in the person building the store. After 150 stores, I should know how to get to 1,000 and for that we need to get different type of talent. That is most challenging.
This article first appeared in the Indian edition of Entrepreneur magazine (April 2016 Issue).