A few get to orchestrate a revolution. A lesser few get to witness the same revolution twice. I have been fortunate enough to orchestrate one and now am an observer in, what I believe, is an impending revolution in the eyewear space in the United Arab Emirates (if not the whole of Middle East). I was the product manager at Lenskart when they started the revolution in India and got to witness firsthand, the sort of customer challenges that needed solving and operational oversight required to deliver the revolution.
And now, I believe the United Arab Emirates is at the cusp of a massive eyewear revolution — one that will change the landscape forever.
Understanding the Landscape
History of Web 2.0 Industry Revolutions
Many industry revolutions happen when the incumbents get comfortable in their position and forget to put the customer first. With books & publishing, the incumbents’ Barnes & Noble were oblivious to the customer needs and the market changes, till Amazon came in and reduced the friction of selection & delivery to mere days. With shoes, Zappos founders realized the core problem in shoe shopping was the hassles of returns of incorrect shoe sizes — hence offering free shipping & returns. Almost every B2C industry has been revolutionized through a direct shift from business-centric to customer-centric offerings.
Warby Parker, founded in 2010, took on the challenge of simplifying the eyewear buying process (discussed in depth later in this article) and is now valued at around $6.8 billion. A few years later, Lenskart was formed in India to address similar problems in the Indian market — and it has done a fantastic job of conquering the market by offering compelling reasons to shop both online & offline. It is currently valued at $2.5 billion. Lastly, in 2017, Eyewa.com opened up shop in the UAE to solve similar challenges — raising $21 million total after the latest Series B round — to expand their omnichannel presence
The UAE Market
The UAE market itself is filled with deep-pocket incumbents like Magrabi, Aster Online, Al Jaber Opticals, etc. They all have a strong offline presence — making their position infallible. The eyewear market in the Middle East stood at US$2.75 bn in 2014. Expanding at a robust CAGR of 8.8% from 2015 to 2023, the opportunities in the regional market are expected to reach a worth of US$5.86 bn by 2023 end.
Unlike a few years ago, the market has started to get digital — fast. Mall footfalls are returning to normal, but a large portion of the sales are still being done online — an aftereffect of COVID lockdowns. The market is ripe for bringing in changes to customer buying behaviour.
So where’s the revolution? In my mind, the pieces on the chessboard are placed in a very formidable manner — each player, mentioned above, having the opportunity to overcome some of the key issues, discussed below, that are specific to the region. If anyone of the players takes on solving those issues, tactfully, the pieces will be tipped over — and a revolution will begin.
Note: I’ll keep my observations limited to the online space — as I believe this is where the revolution will kick off. The two players who’re strong here are Eyewa, the incumbent, and Lenskart, the wise new entrant. Both have the advantage of being a startup (even though Lenskart is old, they still function as a startup — extremely agile and responsive to the customer/market needs). Other players are very corporate-y and hence will find it tough to respond to changes — both from customers & competitors.
Key issues in buying eyewear
Eyewear costs & selection
I did a field study last week to understand the current market and found, unsurprisingly that the average cost of buying non-branded eyewear is somewhere around 900–1200 DHS ($240-$330). Of that, the frame will set you back the most, averaging around 60–70% of the price. Special lenses will cost you anywhere between 700–1500 DHS ($120-$420) depending upon your lens type. Industry insiders know that a frame typically costs anywhere between $10-$20 from the factory, while the lens can get to half those numbers for the common types.
So out of the factory, the reseller in the mall is making a 2000% markup. Add in other costs and still, the margin is a pretty 200–400%. The majority of the costs go into paying for the brand name.
Relative to that, in India, the cost of eyewear (frame + lens) is around $100. So, on average, you’re paying about twice the amount in the UAE than in India. For the folks from India, this doesn’t really make sense — and I’m not even talking about named brands yet (like RayBans, Vogue, Armani, Gucci, etc.) — where the markup is even greater (Police frames from two years ago retail for ~1200 DHS ($350)).
(Note: this is based on my experience and some napkin math. The actuals are should be very close to this. You can refer to the link for more details.)
On the selection — since most of the retailers only have a limited physical space, not all frames are stored in display — severely limiting your options. Their online experience is clumsy (try buying eyewear from Magrabi online — you’ll be more confused than when you started).
Eye testing is an expensive activity
It costs 50 DHS for an eye test in the UAE. That’s because eye tests are mandated to get a driving license — making the retailers a registered entity with the RTA. Most retailers waive off the fee if you purchase the eyewear from them. However, as mentioned above, the selection is limited and the prices are sky-high.
Plus, in the field study, of the 8 retailers I visited in the malls, only two of them had their optometrists ‘in’ — and this was peak time 8 pm on a weekend.
Delivery times are borderline unreasonable
I have a common eye power — one that should be in stock in any warehouse. However, I was quoted anywhere between 3–5 days for delivery in the mall. Additional charges would be levied if I wanted the delivery to my doorstep — taking 5–8 days to deliver. I suspect that it is due to volumes (sales generated from a single mall may not be enough) and the operational costs of running the warehouse in the mall itself.
In the luxury eyewear space, the time is further delayed — 5–8 days to prepare the lenses, with very little wiggle room to get it done faster.
Lens Selection is Limited or Hidden
If you go shopping online on Eyewa — you don’t get to choose your lens. The choice is made for you. Offline, you get a sense that the most expensive (or the preferred lens partner, if that’s a thing) is being pushed. Only on asking for specific lens manufacturers are you shown the booklet that contains the price. Those booklet prices are marked up — again bringing the total cost & experience of buying to a zero-sum game of need v/s luxury spending.
Returns or exchanges
Again, of the 8 retailers, only one offered a full refund if the product wasn’t suitable (their rationale being — you tried it here and hence you should be committed). Online, Magrabi offers 14 days returns, while Eyewa offers 30 days.
Insurance sponsored buying
Most insurances cover the cost of the eyewear purchased, some offer a co-pay option. This can significantly bring down the cost of the eyewear for an insured customer. Unfortunately, this forces the customer to make a tactical decision on the buying — sacrificing options for availability.
Online specific issues
Note: the below issues are subject to change as it is easy to implement the fixes for the issues listed below. But they hold at the time of writing the article.
- Size guide
No retailer offers size guides to inform you about the size of the frames. Customers are expected to know about the specifics of the eyewear industry (how to find your eyewear size, what’s your current size etc) on their own. It is as if, there is a book to be read before you can purchase eyewear online.
- Prescription Assistance
Similarly, helping the users understand how to input their prescription (or simply allowing them to take a photograph of it), isn’t possible — one is expected to know what SPH, CYL translate to, in the prescription forms.
- User Experience
Except Lenskart, all online players fail the basic user test. The experience is very industry-focused. Imitation, I guess is hard, even in the online space.
The Luxottica factor
The Middle-east (specifically the UAE) is a hub for luxury brands. Consequently, sporting the latest fashion in eyewear is core to the buying culture in the UAE. Sure, some are fine with replicas but the die-hards are willing to shell out the big bucks needed to have that brand stamp on the edge of their eyewear.
And when it comes to luxury eyewear, there is no bigger player than Luxottica — an organization that has single-handedly cornered this space through aggressive acquisitions. Big brand names like Oakley had to comply to align with their strategy.
In other words, if you’re doing anything in the eyewear space, you better have the permission of the big-daddy Luxottica to make a significant profit. And they like their mark-ups a lot. Consequently, they’ve ensured that the prices of the frames remain steady at the huge markup.
And if that wasn’t enough, their (sister?) concern EssilorLuxotica, which has the big names in lens manufacturing and distribution (and the technology, if you’re wondering) all aligned to their corporate strategy. It is, as I like to call it, a shadow monopoly — brands allowed to play competitively in the sandbox provided by them.
And because of this, solving the core challenge — of bringing the prices down on the frames & lenses — is a herculean task for anyone trying to ‘make it’ in the online luxury space. You can manufacture your frames, but you’ll still need to eat the markup on the lenses.
The Challenges Ahead
Both Lenskart and Eyewa have a great number of challenges ahead. I’ll break them down here by the players:
Lenskart comes with the experience of bringing the revolution to the masses in India. They’ve tried and tested multiple solutions and have come to an ‘ideal’ solution that works in the market. With their recent funding, they look ready to eat up any competition without worrying too much about their margins. They have a solid technology infrastructure — websites, apps, and feature set that is ready to roll out at a moment’s notice.
However, a few challenges exist that impede their take over on the market:
- Too Soon, Too Fast
Applying the same set of solutions to the problems faced by the customers in one country, in the next country is a little too soon and too fast. Take, for example, their loyalty scheme of Buy 1 Get 1(available only on the app)— for a cool 100 DHS ($30) you get a year of buy 1 get 1 on the eyewear — no matter the choice. However, without establishing themselves as a reliable brand, this seems too early an offering — inciting more doubt than confidence.
- Missing Infrastructure
A great feature of Lenskart is that anywhere in India, you can get your eyeglasses faster than at the local mom & pop store. They have the operational tenacity and business foresight to understand the market and can respond to it. However, in the UAE, their current offering seems a little short — it takes anywhere between 10–15 days to get your eyewear. I can only guess the returns time.
Globally, when new players enter the market from their established presence in other markets, there is a lot of work done to ensure the right infrastructure is in place. Amazon spent 3–4 years building their operational understanding when they entered India, as did IKEA. It pays to have a spectacular experience delivered from Day 1.
- Building Confidence
Another key aspect that made Lenskart successful was the launch of the Try Before You Buy feature. As a customer, you could order 5 different pairs of eyeglasses and return the ones you didn’t like… (there is a fun story of how it was done — maybe for a later time), but that instilled confidence in the brand. As a customer, I was never worried about the frames fitting me.
Many such features were launched to solidify Lenskart as the place to shop for eyewear online — so much so that any other player in the market had to bow out. This was in part due to a ferocious leadership, who insisted on customer satisfaction at any cost. I understand that these were not profit-making features — hell, it cost Lenskart an arm & a leg. But, the customer trust it bought was immeasurable. The PR alone, around it, was worth many millions in marketing spending.
- Product Pricing
While I don’t understand the nitty-gritty of pricing here in the UAE (Luxottica influence in the region may be much stronger than in India), there is definitely a higher markup here than in India. More information would be needed to make a conclusive statement on the pricing challenges, but given the lead times in getting the frames delivered, I’m guessing the operations are based out of India and the delivery time is primarily due to shipping delays in the region. Add taxes and other aspects of doing business in the region — the markup may be justified to a degree — but not so much as it appears right now.
- Customer Mindset
Another industry challenge is in the understanding of the customer mindset — post-COVID, UAE shoppers are returning to the malls, but a large portion of the frequent purchases (like grocery, basic commodity shopping) is relegated to online. Lenskart has the vision that you can have a different pair of eyeglasses every month, if not every week. To get the same level of spending on eyewear — which does ascribe style to many — the customer mindset (and their pocket) needs to be understood well. Fringe/Impulse spending requires a low barrier — something that heavily relies on both pricing & positioning of the brand to align with customer needs.
This brings me to the next point — cross-border ecommerce. Brands like Shein & Alibaba are making the frame buying process easy. Fashion-conscious HENRY buyers (High Earners Not Rich Yet) tend to pick up frames from these international stores and have the frames fitted locally — cost-effectively flaunting their style.
As the incumbent in the market, Eyewa has a lot to catch up on… they’ve already taken the first step of going offline with their retail store in Ibn Batuta, attracting customers with their virtual try-on mirror. The recent funding puts them in a great position to expand their offline presence — competing with the big players like Magrabi & Aster opticals.
Their challenges are:
- Wrong space to fight in
The jury is still out on the online world moving to the offline space. Even established players in the online space take the omnichannel step only after establishing their brand. Unfortunately, by going offline, Eyewa has effectively killed its ability to fight in the online space. Offline space brings in additional costs of rent, marketing, staffing, etc which do not exist in the online space. They’re forced to price their offline products on par with the other retailers or eat the cost of the rent.
Another problem this brings up is that now, Eyewa is limited in the pricing of its online offering. If they price lower than offline, they’ll self-cannibalize their offline share — if they don’t, they’ll get eaten by online players with a big appetite. It’s a snake eating its tail situation.
- Customer Education
As the incumbent, the brand should have focused on educating the user. Instead, it is focused on pushing the latest trends. This is not a bad strategy, but in the long run, it’s akin to giving a fish to a person — not teaching them how to fish. Democratizing & simplifying the complexities in buying eyewear should have been a parallel pursuit. Whatever customer base that they have accumulated would be an easy grab for any player with the right mindset towards customer education & empowerment.
- User Obstacles/Experience
In the same vein as above, the various obstacles in buying eyewear (like not specifying the price of the frame contains the lens cost too) and not specifying the quality of the lens — remember, it’s the customers’ eyes you’re dealing with where you have to guarantee quality — are some of the obstacles faced by the user. The user experience is critical — I know this because, at Lenskart, we doggedly pursued this — even going so far as to break our operational processes to serve the users.
- Luxottica Factor
These are similar to those faced by Lenskart, with a couple of exceptions: Eyewa already has Luxottica on board. This can severely dampen their ability to outprice other players with their own brand products. AFAIK, Luxottica keeps a close eye on the sale of its products and provides very little wiggle room when it comes to the offering — meaning they could reduce the frame styles if their products are not doing well on the site if not outright discontinue the offering.
Already, Lenskart has begun aggressive digital marketing — something that Eyewa, in my experience at least, has been missing out on… standard marketing practices of retargeting, acquisition, etc — which Lenskart knows really well — is missing in the marketing arsenal of Eyewa. I guess the marketing budget is being spent on offline marketing — a move, which I still hold, is detrimental to Eyewa’s growth.
Having studied similar situations in the past for other industries, I think the following will happen:
- 6 months from now, Lenskart will make a massive entry into the market with their local operations, significantly increasing the pressure on the incumbents.
- Another 6 months for the first offline store — they have the budgets to do this — expanding over the year as the response grows and their brand gets recognition.
- Parallelly, Eyewa will build out more stores sealing their omnichannel offering. Hopefully, a price war will ensue — leading to a better selection of frames and brands for us, the customer to choose from…
- After a period of stabilization (1–2 years), each will retire to their corners, waiting for the next round — which will, hopefully not end in a merge & acquisition (M&A). An M&A will be bad for the customer as the prices will go up eventually due to a lack of competition. Both players are backed by big capital — each ready to draw out the fight. And I will have a frame for every week of the year 🙂
What shouldn’t (but possibly can) happen is the corporate greed takes over and both players sit happily in their corners, letting the customers punch themselves in the face. That wouldn’t be a revolution. That would be an opportunity left untapped and a sad ending for the customer.
What will happen next?
It remains to be seen… these things take time. But there is a definite first-mover advantage in solving the above problems. Who knows! There might be another player gearing up to solve all those challenges in one go — the region tends to keep things under wrap before making a big leap.
All I can say is if this works out, there will be only one winner — the customer. And ultimately, isn’t that what we all want?