Himalaya Optical is one of the biggest companies in the eyewear retailing segment in India. Sarat Binani, MD, Himalaya Optical, shares his experience and vision about the future of his brand and eyewear retailing segment in India.
Q. What according to you is the size of organized eyewear retailing segment in the country?
No specific research data is available in India in terms of the size of the organized optical retail business; however, the estimated figure based on assumption says that 10 percent of Indians currently wear glasses and a further 30 percent require eyewear and eye care. A research paper by an Italian trade body estimated that 386 million Indians require spectacles every year and replace their glasses, on an average, every three years.
The total Indian market for optical products is estimated to be about over $1.13 bn, with the prescription eyewear market (comprising sun-glasses, spectacle lenses and frames, Lasik surgery, contact lenses, and cleaning solutions) amounting to Rs 2,300 crore in 2007. The demand in this sector has changed from necessity and requirement to fashion trends and lifestyle.
The organized players such as Himalaya Optical, Lawrence & Mayo, and Vision Express have managed to gain leverage and establish themselves firmly in the Indian market for eyewear. Himalaya Optical already has 56 outlets in 28 cities and plans to add one store every month on an average to its retail network.
Q. What is your share in this segment?
There is no specific data available in terms of the market segmentation as no specific research is conducted on this; however, it is estimated that the market is highly unorganized with only 10-15 percent or a little more of the market is under organized category. Among the organized segment, our market share should be among the top three players in India.
Q. How many stores do you have in the country? What are your future expansion plans?
Currently, we have 56 stores spread across the country. Our pan India spread includes 15 states and 28 cities. We aim to open 75 stores by 2015 and intend to reach the milestone of 100 stores by 2018. We are not only focused to increase the number of stores under our belt but also looking for overall growth of optical retail industry.
Q. Who are your target group of customers?
Our target audience comprise all age brackets . Youth, the population aged between 15-24 years, constitute some 222 million and represent 20 percent of the Indian population and soon these young adults would turn into the adult consumers of the future. Therefore, this group of the population is also a part of our target audience. Kids represent an important demographic for us as they have "pester power," that is, children’s ability to nag their parents into purchasing items they may not otherwise buy.
Q. Which are the fast moving or best selling eyewear products in your stores? What are the upcoming trends in eyewear category?
Brands such as Ray-Ban, Vogue, Tommy Hilfiger, Esprit, and Gucci are very fast moving or can be taken as the bestseller at our stores. Frames from popular designer houses of France and Italy, such as Philippe Morelle, Oliver Martini, Horn N Wood, GenX , Allan Azzaro, and Uth, are also in demand. A niche segment of customers also has a craving for luxury brands like Cartier, Chrome Hearts, Mont Blanc, Burberry, and Lindberg to name a few.
There is a huge demand for bold plastic frames in different shapes like the ones used in the 70s; even the retro style is back and such frames are being flaunted by the B town and Hollywood celebrities.
Himalaya, known for bringing in innovation, has introduced first time in India “Flippers” collection crafted by a group of popular French designers D STYLE, both for men and women. Flippers allows you to choose two looks of the temples, so that you can change your look for every style, situation, and whim just by flipping the temples! With Flippers you don’t have the hassle of carrying the pair of extra temple or spectacle. All you need to do is flip the temple to get a completely new look as per your mood and attire! Now Flippers are available across all our 56 outlets across India.
Q. What kind of services do you provide to your customers?
Since last 75 years, we offer assistance in frame selection, provide consultancy on choosing a suitable lens for frame and lifestyle, and advise our patients to select a suitable tint for their sunglasses. Dispensing of specialty glasses and extremities are our unique skills. Our dedicated team of optometrists can fit all kinds of contact lenses. With tight quality control, selection of the finest optical grade lenses and faster turnover time, our lab enhances the retail optical experience of our patients.
At the optometry clinical front, we have a blend of lot of specialties. We provide facilities to sports people to check whether their visual deficiency is blocking their success, we take care of partially sighted people to regain their confidence, and also provide services to detect and treat lazy eyes of children. We also work with people who spend most of their time on computers and suffer from various computer vision syndromes.
Q. What is the investment for opening up a new store? How long does it take for you to break-even?
A store format of 500 to 700 sq.ft. in an A or B town would typically cost somewhere between Rs 50 lakh to 80 lakh, depending upon its location, furnishing, and the stock mix.
Q. What made you come up with this concept of eyewear retailing?
Himalaya Optical started with one retail outlet in Karachi (now in Pakistan) in the year 1935 by Mannalal Binani. Today, it has grown manifolds and has become a group of 54 comprehensive, multi-branded, and exclusive retail outlets.
Mannalal Binani was a visionary within his first two years of service in the optical industry in Karachi. He started his own business in the year 1935. After partition in 1948, Himalaya started its second innings in India with a retail and wholesale division in Bowbazar, Kolkata. Currently, we are only into optical retail and occupy over 40,000 sq.ft. of retail space across India.
Q. Did you conduct a market research or study before launching Himalaya Optical?
No, as such there was no research done at that point of time. Our forefather started this business because they learnt it while working at an optical store in Karachi and their knack and appetite of setting up their own business has brought us where we are today.
Q. What has been the response like?
Pioneering the concept of exclusive showrooms, at an early stage of its business, Himalaya Optical is positioned as one of the market leaders in this industry with over 75 years of experience, quality, and trust. We have grown manifolds in terms of revenue, retail space, and manpower.
Q. What was last year’s retail turnover? What are your expectations in the coming year?
In the financial year 2010-11, the company has grown by approximately 18 percent. In the current year, we are targeting to grow by 20 percent and above.
Q. What do you think is the future of eyewear retailing in India?
The whole retail trends are on a sweep for a big change. The unorganized businesses are turning into organized with much faster pace than earlier. With the corporate coming into retail business and the market getting open to offshore players, the market growth towards getting organized will become rapid. If this pace continues I hope the organized market share in every retail category will be doubled or more over next five years. There is going to be good consolidation and restructuring in every category of business over the next five years.
Q. What are the challenges and growth prospects in eyewear retailing?
The retail sector in India is growing. In fact every business is on a rise and so is the optical trend. Each and every sector in optical business will grow, whether it is an independent optician, optician with three or four stores, or an optical chain store. But as we all say “fittest of the all will survive,” the same formula will apply to this sector also in the coming years.
Eyewear retail industry is flooded with lots of challenges especially in India. With a fast-paced society and faster-paced technological changes, customers want something new and different. Fast changing trends, huge inflow of new brands together with cost sensitivity on the part of consumers are all mounting pressures at the back end. Larger retailers, especially new chains with their efficiencies of scale at international level, are quite often offering discounts, are pushing prices down, and slashing margins. Stiff competition from departmental store with well-appointed optical departments, as well as semi wholesaler discounters, exert additional pressure on the optical retail to remain competitive.
The optical retail industry is currently on the brink of faster-paced technological changes which demand huge investments to keep the pace with such developments. But limited volume and non-trained employees do not allow reaping the benefits out of it. The typical nature of the optical retail where it is nearest to impossible to replace human touch is probably also a reason for this.
Profitability of an optical store largely depends upon professional optometry facility. Graduate degree program in optometry has just started in India, which means still a few years to go before we have abundant supply of qualified optometrists. Ophthalmologists have strong long-term commitment to their profession. Their practice is mostly focused towards medical and surgical treatments, rather than prescribing glasses. They do not respond to same stimuli as the other professionals in eye care do, limiting the number of prescription for glasses.
Poor eye care awareness, especially in rural area, and lack of trained man power and training providers are a few more challenges. The whole scenario is in fact not very conducive. To me, challenges show presence of huge opportunity. A sound base can be created by establishing optometry and optician training courses to create opportunity for education in a discipline which is very well established in the USA and other developed countries, but not present in India. Regulatory bodies can be formed to limit the entry of non-professionals in this upcoming health care industry. Existing chains like us are ready to accept these challenges. We are looking at the government to invite us to discuss how employment opportunity can be broadened in this industry.
Q. Do you think franchising is a good business proposition for you to grow?
Well! To me a typical franchise agreement means an understanding between two parties whereby franchiser gives franchisee the rights to market a product or service using his trademark or trade name. This sort of business model is very popular in the USA and has been looked upon as one of the fastest ways of growing in numbers even in our country. However, the challenges of this format in our trade are that the high touch of personalized skill of optician and highly vested optometrists are hard to replicate.
In addition, the franchisee most often is driven by the attraction to make money and not to care about optometry, eye care, and customer satisfaction. In the process, customers face lack of service and incompetent complaint handling. The very nature of optical retail is that the customers are not treated as consumer, they are treated as patients and the products are not sold, but provided as a solution is also an important reason why the franchisee model may not be a successful incarnation of ownership for optical retail business.
India is a different market. It is still very dynamic with maximum young audience, whereas European market is more matured, dominating, and structured. There is a huge opportunity for creativity and innovations which may not be seen in the franchise model.
Q. Do you think penetrating further in tier II and III cities will give required fillip to your business?
After the top metros of India, companies are now focusing on tier II and III cities as these would drive the investment and growth phase owing to the huge unexplored potential in these cities.
As tier I cities are becoming saturated, companies are moving to tier II and III cities where profits are higher due to lower rentals and operating costs and moreover such cities are developing at a rapid pace and are largely under penetrated so there is huge potential in these cities.