Lenskart to invest Rs 380cr in 2nd plant, sales go past Titan Eyeplus

BENGALURU: Lenskart closed the financial year ending March 2020 with total sales doubling to over Rs 1,000 crore, taking a major lead over the sales of Titan’s eyewear business, which grew at 6% to Rs 544 crore during the same period.

Sales of the SoftBank-backed unicorn (startup valued at over $1 billion) had stood at Rs 486 crore in the previous fiscal FY19 compared to Rs 511 crore by the Tata Group-owned company business, which primarily operates under

Titan Eyeplus

besides Titan and Fastrack brands as well. After tax, Lenskart’s revenues in FY20 stood at about Rs 900 crore, according to founder and CEO

Peyush Bansal

.

With increasing sales, Lenskart plans to invest $50 million, or Rs 380 crore, in setting up its biggest manufacturing plant at an undisclosed location in India. Right now, it gets a significant supply through a plant in China besides a factory in Gurgaon. It has signed up for the new facility, which is expected to be launched in the next six months. This would be spread across 4-5 lakh sqft — five times the size of its current Indian facility, said Bansal.

The Faridabad-based company sees at least a 20% growth in business in the ongoing financial year with plans to open 200-300 more stores, despite the

pandemic

that is forcing most speciality retailers to shut down outlets. Lenskart currently has 600 stores, out of which it has already reopened 550 by taking precautions like booking store appointments online to avoid crowding and sanitising frames after every trial with UV light ovens.

“The consumer has become very price and quality conscious, which we are seeing as a very positive trend...right now we see a lot of opportunity for gaining market share,” said Bansal, a former Microsoft program manager who launched Lenskart in 2010. According to him, rentals are available at 30-50% cheaper rates and sales at open stores are already catching up to pre-pandemic levels. It has added 25 stores since the start of the financial year with another 82 in the pipeline, where leases are being finalised.

“For us, there could not be a better time to expand stores and we may even take the 200 stores to 300, but haven’t finalised yet,” said Bansal. While Lenskart started out with a focus on online sales, over the years it has effected a rapid expansion of its offline stores, which work through a mix of fixed rental and revenue-share model.

But with the pandemic, it has seen online sales increase from 20% to 40% of its business. And online is now driving 90% of its sales as compared to 70% before the pandemic, as customers short-list frames and book appointments online before stepping into its stores.

“We are ramping up our manufacturing in India aggressively. We have adopted a lot of local partners, who are serving us now. Based on what has been happening in the past, we have definitely ordered a lot of equipment and are in the process of ramping up our manufacturing capabilities for frames,” he added. Compared to China, its frame purchases are spread across a higher number of local vendors here as Indian partners, on a standalone basis, are yet to be at the similar scale as their Chinese counterparts.

“In India, the size of what a single manufacturer could give you will not be more than 20,000-30,000 frames. So, we have to definitely buy across multiple guys. So, at scale, to service our demand, we have to build in-house capabilities. Already, a large percentage of what we are selling is being made in India,” Bansal said.

He added that he is seeing the cost benefit of manufacturing in India, compared to China, even though initial capital expenditure might be higher to set up ancillary services, which are often outsourced by manufacturers in China. “The mandate is clear — right now we are building all the ancillary support in-house,” he added.


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