Eyewear retailer Lenskart’s return to the black in FY23 became possible by scaling up the business by investing heavily in setting up its largest automated eyewear factory in Bhiwadi, Rajasthan, co-founder and product head Ramneek Khurana told Fe. He said that the company will continue to post profit in the current fiscal also.
“Unit-economics wise we have been always profitable. We have done a lot of investment in the new facility which has come up. So, year-over-year it was just about getting to the right scale,” Khurana said.
Founded in 2010, Lenskart reached profitability only in FY20, when it reported a profit of Rs 6.32 crore. It managed to increase its bottomline to Rs 29 crore in the following financial year but in FY22 it went into losses again as procurement costs soared and the company doubled down on expanding its retail footprint.
During this time, the company also invested heavily into its Bhiwadi manufacturing plant, its second plant after the one in Gurugram. Lenskart, whose omni-channel strategy has propelled it as one of the largest eyewear brand in India, has seen strong growth in sales across its more than 1,500 retail outlets and plans to grow at a speed of 400 new stores a year.
Lenskart is one of the first D2C startups to master the omni-channel distribution strategy in India, which is now adopted by a list of D2C brands who are increasingly going “phygital”, that is to say there are focusing on expanding retail store presence as well as online footprint.
“Less than 50% of our overall numbers are coming from metro cities so we plan to go deeper into the tier II markets such as Jaipur, Cochin, Pune and Chandigarh, where we have seen good responses,” Khurana said.
The company is also focusing on South-east asia and Middle East, where it is currently present in Dubai and has plans to expand to a couple of cities in UAE next year. In South-east Asia, Lenskart bought a controlling stake in Japanese eyewear brand Owndays for $400 million in June last year and is now present in 14 countries.
Khurana said that the company’s omnichannels strategy,started as a response to consumer concerns, such as uncertainties about frame fitting, appearance, and prescription issues. The company had initially started off in 2010 as an online platform for selling prescription eyewear, sunglasses and contact lenses.
Now its platform uses artificial intelligence and machine learning to study the online conversion funnel of its customers, including understanding demographics and time spent on product selection, and provide personalised assistance.
The company has raised the second-highest funding of $600 million amid the funding winter this year, in two separate rounds. In March, it raised $500 million in a round led by Abu Dhabi Investment Authority (ADIA) and in June it raised $100 million from PE firm ChrysCapital. As per Tracxn, its valuation stands at $4.5 billion.