In the coming years, Valyoo Technologies’ sole focus will be on Lenskart.com. Through a combination of online and offline sales strategies such as door-to-door eye-check up, 3D Face Visualiser and physical stores, the company aims to touch revenues of Rs. 100 crore in FY15
Take a close look at the e-commerce industry and you will notice that several existing and new players have been successful because they operate in a niche segment. Over the last two years, as more and more customers have taken to online shopping, companies have experimented with different business models and realised that it is not just about being the online store for several product categories, but about leveraging specific verticals, be it clothing, books or eyewear.
For Peyush Bansal, founder-CEO, Valyoo Technologies (the parent company of Lenskart.com), the story is no different. In November 2011, Bansal took the plunge into Indian e-commerce with Lenskart.com (Lenskart) and soon branched out into other verticals such as Watchkart.com, Jewelskart.com and Bagskart.com. Today, though all four verticals are performing well, he is betting on the eyewear market and is considering selling the other three businesses in the near future. “Though we are not actively looking for buyers, we might sell them if an attractive offer comes up. Usually, the people who buy eyewear from us also buy other accessories such as watches or bags. But Lenskart by itself has grown exponentially over the years. If you ask me, it wasn’t that obvious before,” admits Bansal.
When we last spoke to him in March 2012, Lenskart was handling an average of 500 orders per day and had a presence in 450 cities. Today, it has 50 brands on board, a presence in 1,500 cities and the portal sells 1,000 spectacles a day. Bansal indicates that the company is focussing more on Tier-II and Tier-III regions for its growth. “Lenskart has a unique differentiation in terms of product and service delivery. Almost 90 per cent of our products are customised according to buyers’ needs. And, since there are no middlemen involved, we offer our products at a price that is upto 70 per cent lesser than the showroom price. This has resulted in a lot of positive feedback from our customers,” he explains. Typically, the product price on Lenskart.com ranges from Rs. 499 to Rs. 22,000.
Almost 90 per cent of our products are customised according to buyers’ needs. And, since there are no middlemen involved, we offer our products at a price that is upto 70 per cent lesser than the showroom price. This has resulted in a lot of positive feedback from our customers.
In May 2011, the New Delhi-based company raised US $4 million from Bengaluru-based IDG ventures, to expand its e-commerce business. In February 2013, it raised its second round, to the tune of Rs. 53 crore from Ronnie Screwvala-backed Unilazer Ventures and existing investor, IDG Ventures. “These funds have been primarily used for marketing including advertising, hiring and product innovation,” says Bansal. He adds that the company is likely to raise a third round in six months.
Learning from the customer
For Bansal, the success of a product depends on three key metrics; constant improvisation, quality and learning from customer feedback. “It is certainly not easy to keep a watch on the changing needs of our customers. That is why we rely heavily on audits, research and surveys,” he states.
The company adopts several strategies to boost online and offline sales. For instance, the team had once conducted a research to find out why customers would not have bought from them earlier. Upon realising that one of the reasons was the need for an eye check-up, Bansal and his team, along with an optometrist started a service where they went to each house, conducted an eye check-up and led them to choose a prescription-based frame from Lenskart.com. Today, this service is available in eight metros across the country. In another instance, to boost online sales, the company has developed a tool which, combined with analytics, digitally places frames onto the buyers’ photographs, thus prompting them to buy a second pair. “We usually target these tools at second time buyers because by then, we would have gathered sufficient behavioural data,” states Bansal, and adds, “We have important metrics across departments like delivery time, consumer acquisition costs, inventory aging and such. These parameters allow us to keep a constant check on areas which needs focus and energies.”
In fact, the company is in the process of developing a 3-D face visualiser to replicate the offline store experience for customers. On the other hand, to boost offline sales and build brand trust, the company has setup physical stores. “These stores act more as contact points for people to get more familiar with the brand,” notes Bansal.
Talking to the masses
A significant change in the company’s thinking reflects in its marketing strategy. Previously, it relied on word-of-mouth referrals and social media to build its brand, but it has recently taken to the mass medium of television.
“The idea was to build brand reputation, brand awareness and also to open the category. It is anything but simple. For example, if Jabong advertises, it does not really help our category because it is not conventional buying. Whereas, television ads give our customers more information about how this process works and helps create awareness about what they can get,” says Bansal.
On back-end technology, the focus for Lenskart.com remains on reducing downtime and improving browsing speed. “Though the website traffic and the number of users has scaled, we are in a very stable stage in terms of back-end technology. In fact, now we have more technology experts working towards making the user interface simpler and faster,” shares Bansal. Even in terms of logistics, the company continues to rely on courier partners for delivery. “If a customer is not happy with the product, that is where we use our own team because we feel logistics partners are not very strong in these areas,” states Bansal. For now, in every city, Lenskart.com has two people managing return logistics.
Looking at the future
In the last two years, the company’s revenues have grown to Rs. 50 crore in FY14. In FY15, it aims to touch the Rs. 100 crore mark. “There is a lot to explore in terms of market opportunity as every third Indian needs spectacles,” notes Bansal. Thus, his aim in the coming years is quite straightforward; to better understand what people want, why people are buying and to better meet their requirements. “When your strength is in product quality and product innovation, eventually, customers will begin to realise the long term benefits of being associated with you. This is what we are trying to achieve,” concludes Bansal.
|Then (March 2012)||Now (June 2014)|
|Present in 450 cities, handling an average of 500 orders a day||Present in 1,500 cities and selling 1,000 spectacles a day|
|Relied on word-of-mouth and social media to build brand||Mass advertising on television, setup kiosks in key localities, door-to-door eye check-up in eight metros, 3-D face visualiser for second time buyers, word-of-mouth|
|Focus on building its four online retail portals||Focus on better understanding customer buying patterns and meeting their requirements, possibly exiting multiple portals to focus on Lenskart|
|Focus on reducing downtime||Employed more people on technology front to reduce downtime and improve browser speed|