E-commerce in India has come a long way in the past three years. What began as an online shopping for only books, electronics and mobiles, now includes practically everything, including expensive jewellery. In 2010-11, e-commerce pundits predicted that verticals with high touch-and-feel products like apparels and eyewear will not receive much traction.
While apparels contribute a major chunk of e-commerce transactions today, leading eyewear e-commerce site Lenskart has grown by 200% in the previous year. Backed by IDG Ventures, India, and Unilazer Ventures, Valyoo Technologies Pvt Ltd runs the leading eyewear portal along with three other portals - WatchKart, Jewelkart and Bagskart.
In an exclusive interaction with YourStory, the group’s founder Peyush Bansal claims the group will turn EBITDA profitable by the end of this year.
Peyush spoke on various aspects of the company, including reasons behind curtailing the work-force, outlook of e-commerce in 2014 and maturing ecosystem.
YS: How was 2013 for Valyoo portfolio companies in terms of traction and growth?
PB: 2013 was a promising year for all the four karts. We have grown by 100% in the last one year and Lenskart alone has grown by 200%. We are seeing positive traction in consumers coming back and more and more people willing to buy prescribed eye glasses online.There is a definite shift in consumer confidence when it comes to buying eyewear online, even without the touch-and-feel factor. Of course, our unique service has made shopping more convenient. They now also have the option of calling us home for a free eye check-up and a broad range of eyewear to try and buy from.
Our virtual mirror makes it fun for everyone to choose an eyewear that suits them. Our other services have ensured that we give a special experience and over last year, it has paid off well.
YS: According to our sources, Valyoo had curtailed its work-force significantly over the past few months. What is the strategy behind this move?
PB: E-commerce is primarily about technology. Since our inception, we have implemented various technologies which enabled us to reduce manual work-force across different processes. Valyoo is constantly evolving and eventually e-commerce business is a way to invest more and more on technology and we are planning to bring in more efficiency by making the logistics much better and efficient.
The idea is to add a talent pool in all spheres of our e-commerce business. We are a very customer-focussed company and every decision is based on that only.
YS: Is there any sign of Valyoo companies turning profitable this year?
PB: We are EBITDA positive, even though none of the big e-commerce companies have achieved this so far. We also have a strong and experienced financial controller now. Our marketing strategies are much more focussed and targeted. Having said that, our eyewear will still be high quality, yet affordable, with all possible services we can extend to our customers. We will achieve profitability (in terms of EBITDA) by the end of this year.
YS: Unlike the 2011-12 period, we have seen e-commerce companies allocating less funds towards marketing. Is it a sign of maturing ecosystem or a funds crunch?
PB: Definitely a maturing ecosystem. Mature e-commerce businesses have now learnt their lessons and know exactly what to target. Fundings are still happening, so overall it has nothing to do with the crunch of investor's money. We have allocated significant marketing budget this year and major chunk of it will be spent on mass media like television.
YS: Is Lenskart eyeing to raise funds this year?
PB: No, not this year.
YS: What would be the outlook of Indian e-commerce space in 2014?
PB: This year will see more consolidation. Focus on e-commerce will be better since all the key players now understand their strong and weak points. The big will become bigger and newer players will keep pouring in, making it more convenient for the customer.
YS: Take us through Valyoo's future plans.
PB: One-third of India’s population needs vision correction and spectacles. At Lenskart, we are only able to cater to a small part of this number so far. We plan to provide the majority of this population with reasonable and the best quality eye glasses.
We also intend to extend the benefits of our sales to the ones in need, and have made efforts in that direction through our 'buy one, give one' programme in which we donated a lot of spectacles to the poor in Delhi (NCR).