Indian optical industry has sailed through the most difficult year of this century. For starters, the corporate and retail companies continued to expand. Lenskart attracted attention with the acquisition of Own Days that took their footprints outside India expanding across regions.
Independent retail business houses regrouped and focused on cash flow with prudent inventories. Hospital driven optical outlets were insulated to the challenges for most part other than the lockdown in 2021. Another interesting highlight of 2022 was to see the younger generation taking leadership roles in their businesses. It is also now a safe hypothesis to state that optical retail in India cannot succeed with just online presence, physical stores are important. Of course, we would need to wait for the report card (financials for the year ending March 2023) to determine the health of the business at the operating level to validate this.
The one trend that has emerged as a clear winner – the inherent need of eyecare at a macro level. While the major cities have global ratios of optical stores to population, the tier 1,2 cities are still lacking options. It is the crowd in these smaller cities that has a growing disposable income and increasing awareness of eye care needs. Vision correction is no more a standalone offering in metros as fashion is playing as a catalyst to encourage people to go for spectacles.
Eye care : Growing global need
The Lancet global eye health report released in the year 2021 sets out the path for eye health for a world without avoidable sight loss. It makes the clear socio-economic case that eye care needs to be recognized as a worldwide development issue and is integral to achieve the Sustainable Development Goals by 2030. The key message of the report states that almost everyone will experience impaired vision or an eye condition during their lifetime and will require eye care services.
Quality eye care services are important and not to be compromised. However, the highly cost-effective vision restoring interventions also offer enormous potential to improve quality and outcomes. There is a fire need to increase the eye care workforce. Optical businesses need to build capacity sharing tasks, training, etc . The Government of India through the gazette has therefore recognized Optometrists, Ophthalmic Assistants and Vision Technicians and all of them would be playing a key role in serving the needs of vision correction.
To quote IAPB document released in the year 2021, 411 billion US$ of lost global productivity could be regained with action and productivity can be improved by 20-30% while addressing eye care services. India would also certainly benefit from this action.
From the business angle while the market has many players and intense competition continues, the vision health awareness has gone up significantly. This, coupled with sunglasses with sale of protection against UV, blue light etc. add a value proposition to the consumers and lead to the average selling price going up in the mid and premium category.
The Indian market is clearly getting segmented with luxury, premium on one side and mid-tier on the other. Brands continue to attract interest in the age group of 40+ while the newer and younger generation are less inclined to brands but prefer to own multiple sunglasses/ spectacles. Eye screening cost continues to be cross subsidized through sale of products in the opticals barring the eye hospitals.
On a concluding note
The year 2022 is behind us and the market scenario is quite positive. The gap to address the uncorrected refractive error still exists and if investments happen in the right regions of India, it could fuel an overall trade boost.
The media houses have also played their role with trade exhibitions in India in many cities and for the first time an Indian expo set their footprint overseas in Dubai attracting international customers.
Clearly a year well managed. As we enter 2023 with cautious optimism, the forecast of global recession in many countries remains. But, India could be in for a surprise as the domestic consumption in the eyewear category continues to grow despite headwinds. So let’s wait and watch!