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The Relationship Between The Online & Offline Business For GKB Opticals

While much of the buzz around Indian e-commerce has been around multi-brand retail online, single brand retail might also soon make its presence felt. In October 2011, GKB Opticals, an eyewear retail chain went online with a soft launch, and has just announced its official launch. We spoke with Dhruv Gupta, CEO of GKBoptical.com, about the offline business going online:

MediaNama: What’s the relationship between the online and the offline business for GKB Opticals?
Dhruv Gupta: Online is a store, and it’s a simple relationship: we use the brand for the site, there there advantages of leveraging infrastructure. There is no need to set up the infra or a huge investment in terms of warehouse and stock. Both companies have common stock, and the retail company buys certain stock for their store, and it reduces online costs a lost. You have to have a whole team of people looking at products. The eyewear product requires tests, and having this model has an advantage because if the eyewear doesn’t feel right, you can go to a store and get it serviced. We are looking at an online-offline integration. Pureplay online companies have started doing offline. For us, I see a huge advantage already, having a large offline presence. We’re seeing 50% growth month on month, and we started in October 2011.

MediaNama: Would this business be looking for funds?
Dhruv Gupta: We’ve put in own funds, and it’s a reasonable amount. We’re not looking at investment. We don’t forsee an external fundraising need. Funds can be generated internally.

MediaNama: How do you manage distribution?
Dhruv Gupta: We’ve got a bunch of logistics partners. Say, you order your glasses, and with sunglasses, it’s pack it, ship it. With prescription glasses, we manufacture the lenses, put them into a frame and ship them off to you. We do high quality lenses and fitting, and to do those kind of things, and online only player will have to set it up, while GKB already has a setup in place. It takes 4-5 days for the delivery, including the manufacturing time. It may take 1-3 days to manufacture the lenses, and 1-2 days for delivery. GKB is in 18 cities, with 60 stores – Delhi has 3, Chennai has 12, Bangalore 6-7, Kolkata has 12-13, Mumbai has 4-5.

MediaNama: How much of this distribution is outside of these cities?
Dhruv Gupta: It’s equal (between main cities and small towns). We’ve had orders coming in from small towns, where consumers want a certain kind of brand or type, but they don’t get it. It’s either people who don’t have the access or availability, or don’t have the time. The convenience factor is a big pull for people. In the big cities, you have a lot of options. We’re getting orders for both prescription eyewear and sunglasses from all over.

MediaNama: How much does the cost to consumer vary in online vs offline?
Dhruv Gupta: Definitely better online, but it depends. You do get discounts and price benefits online, and we have Rs 1000 rupee to 30,000 rupee product range, and for some there is a 25-30% discount.

MediaNama: Does it cannibalize on the store revenue?
Dhruv Gupta: Not particularly. What we’re noticing is that there are two kinds of buyers: those who are willing to go online and buy it, and those who want to go and try it out. There is such a large market out there, that it is growing so fast, that it doesn’t cannibalize anyone at this point in time. It just grows the market. A third of India’s population is supposed to need eyewear correction, whereas currently only 100 million have eyewear correction. And that’s not even fashion. Having online stores come in, I don’t think there is any challenge with cannibalization.

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Also, in a large store, we could carry 500 SKU’s, and online we have almost 5000 products. In store, RayBan has around 40-50 models, and online we have 250 models. Online, it’s always there. We’ve developed this try-on tool in-house, where you could upload your photo and try the eyewear on. That helps customers in terms of comfort of buying eyewear. We developed our own tool. On an average, we have over a 1000 trials a day.

MediaNama: Are you also pushing older stock?
Dhruv Gupta: There is stuff from this season and the past couple of seasons as well. Every six months you get new styles coming out. For every new season, we get the latest stock, and you get it here online. In the stores it takes time to get the latest, and there is limited shelf space.

MediaNama: How are people finding you?
Dhruv Gupta: through organic (search), paid search and social media.

MediaNama: How are you doing cash on delivery?
Dhruv Gupta: Return rates are quite low. We’ve optimised the process for the  a cash on delivery model, because it is impulse – a lot of people buy because they feel like it at that point in time. We verify the order and confirm it, to make sure that it is accepted. So all the effort that goes into makes sure that there is a low return. Someone calls to confirm the order. We have a return policy, because we want to make sure the customer is comfortable in transacting with us. We give free returns as well, or you could return it to a store.

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