India, a country one-third the size of Canada, has a population of 1.5 billion that is growing at double the rate of the country’s job market. As young people enter the job market after graduation, they either remain unemployed or are forced to take jobs that do not employ their skills and abilities. Given the situation, the country’s privileged few often relocate to countries like Canada that promise them a stable livelihood through their various immigration programs. One amongst these few was Peyush Bansal, a young boy from Delhi who enrolled at McGill’s Faculty of Engineering in 2002. What made Bansal’s journey so unique was his determination to use his education to transform the lives of the other, less privileged half of India’s population, rather than as a pathway to immigrate into Canada.
Soon after graduating from McGill in 2006, Bansal landed a job at Microsoft’s Redmond Campus in Seattle. At Microsoft, he described himself as being just “one in fifty-thousand,” surrounded by employees working towards improving the lives of people whose lives were already relatively better off. Bansal felt as if his experiences had taught him to improve the lives of those in need.
Bansal felt as if his experiences had taught him to improve the lives of those in need.
One such need he identified was vision correction. According to him, 50 percent of the Indian population needed spectacles. Out of these 750 million people, only 187 million had spectacles. To put this in terms of economic product, the global economy faces an estimated annual loss of $227 billion USD due to the productivity loss caused by uncorrected vision. This dire need for vision correction motivated him to return to India and found Lenskart, an online prescription eyewear company, in 2014.
Prior to Lenskart’s launch, India’s eyewear market was largely unorganized, with only a few brands. The buying process for a customer was extremely cumbersome, as it took up to two weeks from the date of prescription for the customer to receive a pair of glasses. Moreover, the cheapest pair of branded glasses cost at least $30, whereas the average hourly wage in India is a mere $1.50 USD, making them unaffordable for most of the population. Some of these brands, however, such as Warby Parker and Luxottica, had low costs and profit margins of up to $69 and $166 respectively, according to a UCLA study. With these low costs and high margins, companies aimed to leverage the inelastic demand for spectacles. In other words, eyewear companies knew that their customers, regardless of their job or pay rate, would shell out any amount to correct their own vision or their family members’.
After witnessing brands leverage this customer pain point, Bansal envisioned a massive business opportunity. When he launched Lenskart, he significantly cut down profit margins and sold pairs of spectacles for prices as low as $4 USD. Apart from price penetration, Bansal cut down the delivery time of spectacles to 3 days from the average 14-day wait. Lastly, by offering over 5,000 varieties of frames, he tried to position Lenskart as a fashionable lifestyle brand.This lifestyle marketing was aimed at reducing hesitation for Indian consumers, who often stigmatized the use of glasses because they were medically prescribed products.
After witnessing brands leverage this customer pain point, Bansal envisioned a massive business opportunity.
Over the years, however, Lenskart faced multiple problems. Its main issue was a paradox of choosing to launch primarily as an online business while simultaneously trying to increase access to eyewear products in India. 65% of the Indian population lived in semi-urban or rural areas with limited access to the internet and with customers reluctant to shop online. As a result, Lenskart had a difficult time reaching a majority of Indian consumers through its e-commerce model.
To circumvent this problem, Bansal adopted the “endless-aisle” strategy and opened physical stores in smaller Indian cities in 2014. With this strategy, a customer could walk into the store, get their power checked, choose their frame, and have the store manager place their order through Lenskart’s online portal. Consequently, while the physical store provided tangible benefits such as the possibility to touch and try the product, the order was still being fulfilled by the company’s conventional e-commerce supply chain.
Due to this omnichannel model, Lenskart stores only ordered products when customers expressed interest through the physical store’s portal. As a result, the stores did not accumulate deadstock, and Lenskart was able to avoid unnecessary storage costs. Additionally, unlike other local opticians, Lenskart manufactured its own frames rather than ordering them from other brands, giving them even more control over costs. These low costs enabled Lenskart to give commissions as high as 25-30% to franchise owners who operated its stores. This attractive commission incentivized local opticians to convert their stores into Lenskart franchises. Consequently, Bansal’s brand was able to pave its way into smaller, less developed markets in India in an ethical and inclusive manner that gave local opticians an alternative business opportunity rather than completely eliminating them.
Over time, Bansal’s choice to launch as an e-commerce platform has paid off. With the endless-aisle strategy and the growing acceptance of e-commerce in rural India, Lenskart has gained an edge over its competitors in India. In the 2019-20 fiscal year, the company’s revenue grew by almost 100% in comparison to its closest competitor, Titan, proving Lenskart’s growing prominence in the Indian eyewear market.
Over time, Bansal’s choice to launch as an e-commerce platform has paid off.
Today, Lenskart has a value of over $2.5 billion USD. In its 12 years of existence, the company has, both literally and figuratively, provided several individuals and businesses in India with a vision. Bansal’s vision also seems to have come full circle– from pitching his vision correction business to investors at SoftBank to hosting as an investor on the reality show Shark Tank India, where he is supporting numerous other start-up visions.