Lenskart, a well-known eyewear brand, has caught people’s interest not just for its cool glasses but also because it’s making good money. When we look at how the company does business year after year, we find an exciting story of growth. That’s the time the folks wonder- Is Lenskart profitable?
Right from the beginning, Lenskart has been smart about using the internet to sell glasses, and people really like their online store. They’re good at changing what customers like, and they’ve come up with cool things like trying on glasses virtually. This has helped them become more popular. When we look at how much money they make each year, we see a story about being flexible and trying new things. However, the profitability of the business still remains a mystery.
So, in this write-up, we will uncover the YOY business results of Lenskart and answer the question- Is Lenskart profitable?
Here we go!
Lenskart: A Brief Overview
Lenskart, founded in 2010 by Peyush Bansal, Amit Chaudhary, and Sumeet Kapahi, has emerged as a pioneering force in the eyewear industry. With its innovative approach to online eyewear shopping, Lenskart has redefined the way customers perceive and purchase eyeglasses and sunglasses.
Lenskart has revolutionized eyewear shopping by disrupting the traditional mode. How? With the help of the following strategies-
1. Direct-to-Consumer (D2C) Strategy
Lenskart disrupted the traditional eyewear retail model by adopting a direct-to-consumer strategy. This approach eliminated the need for middlemen, allowing the company to offer a wide range of eyewear at competitive prices. By maintaining control over the entire production and distribution process, Lenskart could deliver high-quality eyeglasses and sunglasses directly to customers.
Note: We have written a detailed distinction between D2C and B2C. For more details visit the article “D2C vs B2C.”
2. Enhanced the Shopping Experience with Virtual Try-On Technology
One of Lenskart’s standout features is its virtual try-on technology. Leveraging augmented reality, customers can virtually try on different frames before making a purchase decision. This technology bridges the gap between online and offline shopping experiences, providing customers with the confidence to choose frames that suit their style and face shape.
3. Innovative Subscription Models
Lenskart introduced innovative subscription models that revolutionized the eyewear market. Through programs like Lenskart Gold and Lenskart Air, customers can enjoy eyewear without hefty upfront costs. These subscription plans offer a cost-effective way to access eyeglasses, making eyewear more affordable and accessible to a wider audience.
4. Omnichannel Presence
Recognizing the importance of a seamless shopping experience, Lenskart expanded into the brick-and-mortar space. By opening physical stores across various locations, the company allows customers to get their eyes tested, try on frames, and experience its products in person. This omnichannel approach blends the advantages of online convenience with the personal touch of in-store interactions.
In a relatively short span of time, Lenskart has not only disrupted the eyewear industry but also transformed the way people shop for glasses. Through its innovative strategies, technological advancements, and commitment to social responsibility, Lenskart has solidified its position as a trailblazer in the eyewear market, catering to customers’ diverse needs and preferences.
Lenskart Financials: Uncovering YOY Business Results
Let’s look at the financials of the company-
1. Revenue earned
In the fiscal year 2022, Lenskart earned revenue of Rs.1,503 crores through its diverse revenue sources. How does Lenskart make money? Are you curious to know it? If yes, then visit Lenskart’s business model, where we have described its revenue sources and working strategy in detail.
Let’s compare the revenue earned by Lenskart on a YOY basis-
|Sale of Products||Rs.1,418 crore||Rs.855 crore||Rs.851.21 crore|
|Subscription Fees||Rs.49 crore||Rs.43 crore||Rs.37.20 crore|
|Other Operating Revenue||Rs.36 crore||Rs.7 crore||Rs.11.79 crore|
|Results||Rs.1,503 crore||Rs.905 crore||Rs.900.20 crore|
The amount you spend on the operations of the company determines the profit/loss of your company. If the amount of money you spend exceeds the amount of revenue you earn. Then, your company will drown in losses. It looks like Lenskart also dipped into huge losses.
Now look at the following expenses of the last three fiscal years that led to the losses for the company “Lenskart.”
|Cost of Materials||Rs.635 crore||Rs.338 crore||Rs.274.03 crore|
|Marketing & Promotion Expenses||Rs.235 crore||Rs.128 crore||Rs.203.74 crore|
|Commission paid to other selling agents||Rs.305 crore||Rs.186 crore||Rs.111.10 crore|
|Employee benefits expense||Rs.245 crore||Rs.160 crore||Rs.176.50 crore|
|IT and Communications expense||Rs.39 crore||Rs.22 crore||Rs.26.78 crore|
|Telephone Postage||Rs.42 crore||Rs.28 crore||Rs.80.69 crore|
|Other expenses||Rs.225 crore||Rs.128 crore||Rs.80.69 crore|
|Total||Rs.1,726 crore||Rs.999 crore||Rs.963.14 crore|
Is Lenskart profitable?
Here comes the most anticipated part of this write-up. The query on profitability is obvious for a company with a humongous valuation. Don’t you wonder whether it is profitable or not despite being valued at $4.5 billion?
You will get to know it by looking at the data in the following tables-
You will get to know it by looking at the data of last three fiscal years in the following tables-
|Market Valuation||$4.5 billion (Rs.36,742 crores)||–||–|
|Revenue Earned||Rs.1,503 crore||Rs.905 crore||Rs.900.20|
|Expenses||Rs.1,726 crore||Rs.999 crore||Rs.963.14 crore|
|Profit/Loss||Loss of Rs.102 crore||Loss of Rs.29 crore||Loss of Rs.6.32 crore|
So, here is your answer- “Lenskart was not profitable in FY22 because it dipped in the loss of Rs.102 crore.” Even though it earned an appreciable amount of revenue from its numerous revenue sources. But the cash outflow in various expenses was high as well. This means the amount spent on expenditures exceeded the amount of revenue earned. Eventually, it faced a considerable amount of loss.
Another notable point is that Lenskart made losses in the last fiscal year too. However, its condition worsened. How? Its losses increased to Rs.102 crore in FY22 from Rs.29 crore in FY21. Also, in FY20, it dipped into the loss of Rs.6.32 crore.
By now, you might have got the answer of- Is Lenskart profitable? Sadly, its not! Lenskart is planning to expand in South India in the upcoming years. How? By opening over 150 retail stores. Currently, it has 550 retail stores in South India. In the future, the number will increase to 700 at the end of the current fiscal year. Also, it raised a total of $1.6 billion in funding over 17 rounds. Their latest funding round occurred on June 15, 2023.
We have explained Lenskart shareholder’s breakdown, funding, and valuation. You can look into it for more details.