Entrepreneurship Zone: 08 January 2024 :: Entrepreneur capitalises on Africa’s demand for affordable eyeglasses

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Entrepreneurship Zone: 08 January  2024 :: Entrepreneur capitalises on Africa’s demand for affordable eyeglasses

 




 


 

 

Swiss-born entrepreneur Jérôme Lapaire identified an opportunity to sell eyeglasses to price-sensitive customers in Africa. He shared the story of his entrepreneurial journey with Jack Thompson.

In this article, we take a closer look at:

·         How Lapaire identified two major reasons why many people in Africa don’t wear glasses: awareness and affordability;

·         His initial B2B approach of reaching potential customers through their workplaces, instead of direct sales;

·         The strategy of Lapaire Glasses to challenge the traditional eyewear sector’s high-margin, low-volume model, similar to what IKEA has done in the furniture industry;

·         The unique market potential in French-speaking Africa due to the cultural perception of eyewear; and

·         The importance of being willing to close down a business unit that isn’t working.

When Jérôme Lapaire first pitched his affordable eyeglasses to the employees of Kenyan companies, he had no connections in glasses manufacturing nor an established supply chain. Instead, he ordered a few dozen glasses from an overseas website using his credit card and presented them as Lapaire Glasses’ initial range.

“I did it totally freestyle,” admits the 35-year-old Swiss-born entrepreneur. “I said, okay, where can I get eyeglasses? I know no supplier locally. I know no one in the industry. What can I do? And I went on an online website – you know, in the States, in Europe, you can buy eyeglasses online – and I was okay, I’ll just order them online. I ordered thirty pairs of eyeglasses. They were shipped to me in Kenya, and I showed them as the Lapaire first models. Simple!”

“The setup costs were very limited. I did everything from my apartment at the very beginning,” he adds.

Since this modest start five and half years ago, Lapaire Glasses now has 56 branches across seven African countries with 350 employees. It has secured multi-million-dollar investments and is contributing to making eyewear more accessible for millions.


Identifying a business opportunity in Africa


Although he studied law, Lapaire acknowledges his inherent “entrepreneurial mindset” that led him to establish a shirt tailoring business during his law school years and a travel app shortly thereafter.

“It totally failed. I burnt all my savings,” he says, referring to the tech venture.

Fed up with Europe, Lapaire decided to move to a more dynamic environment. He narrowed it down to three places in Africa: “People told me Cape Town is absolutely beautiful … but it’s not where you’ll have the real grasp [of] the African continent. Lagos is the toughest. And Nairobi is a good middle ground,” says Lapaire on why he chose the Kenyan capital.

After arriving in Nairobi in 2015, he got a job with the impact investment firm, AlphaMundi before joining market research company, Sagaci Research. It was here where he got a broader exposure to Africa, working on projects in countries such as Nigeria, Senegal and Madagascar.

But he always knew that he wanted to run his own enterprise.

Looking for a business idea, he asked himself: “What are the big problems that I need to tackle?”

Having lived in Kenya for three years, he identified three issues. He observed the inefficiency in inter-city transport and saw potential to digitise it. His second observation was the low insurance coverage, and he believed there was an opportunity to make insurance more accessible and transparent.

The final idea came to him when he stumbled upon a study on the market size of eyeglasses in Africa. “I realised, wow, okay, there are half a billion people that need eyeglasses in Africa and only a few million that actually have them,” says the entrepreneur, frequently citing the phrase “no brainer” when talking about the potential of his business.

Despite his limited understanding of the eyewear industry, including the manufacturing processes, and not being a glasses wearer himself, Lapaire was determined to grasp the core issues. In fact, he is adamant that it was this lack of experience and knowledge that made him able to disrupt this established industry.

“I was ready to try anything,” he says.

Lapaire pinpointed two major reasons why many people in Africa didn’t wear glasses: awareness and affordability. He discovered that many people were either completely unaware, or only vaguely aware, that their vision was subpar compared to the average person. Moreover, even when individuals recognised the need for glasses, the cost was prohibitive for most Kenyans without health insurance. In Africa, the rate of insurance coverage is among the lowest globally, primarily due to the cost and availability of policies.


Targeting corporate Kenya


Lapaire initially adopted a strategy of reaching potential customers through their workplaces, rather than direct sales. He sent cold emails to Kenyan companies, offering their employees free eye tests and the option to then purchase his company’s affordable eyewear.

“Most CEOs, most HR people actually answered,” recalls Lapaire. “I was going around: ‘This is insane, I’m sending a cold email and people are actually answering.’”

Operating from Lapaire’s apartment, he and his small team – comprising two employees – travelled to companies by motorbike with mobile testing kits and the frames bought off the internet.

Offering free eye tests was a crucial part of overcoming the awareness part of the puzzle, says Lapaire: “A lot of people had never done an eye test.”

He highlights the profound impact of providing glasses to people for the first time, recalling his experiences of personally carrying out eye tests in the company’s early days. “When you have a 30 or 40-year-old person that … tries [on glasses] and has a smile and looks around and rediscovers the world, I was shaking,” recounts Lapaire. “It’s pretty powerful.”

He also reflects on a childhood incident that demonstrates how access to eyewear can enhance educational and productivity outcomes in Africa. When his younger brother transitioned from primary to secondary school and changed his seating in the classroom, his academic performance declined. Upon inquiry by their parents, his brother revealed that he was struggling to see the blackboard, leading to a loss of focus and engagement in class.

“He got a pair of eyeglasses and then his grades went back up,” says Lapaire. “So, if you have this problem in Switzerland, imagine the potential in Africa.”

This clear impact meant the pitch to companies was not a hard sell: “I would cold call CEOs and HR directors in Nairobi and tell them, ‘Guys I want to offer you something that will increase the revenues of your company … You will have more performing employees, less accidents if you are manufacturing, and happier employees. And you don’t have to pay anything, employees will pay for their own glasses.’”

For these reasons, several prominent companies in Kenya signed up, including Uber, Bidco and Broadway Bakery.


Low margin, high volume business model


The company’s typical target customer earns between $200 to $800 a month and doesn’t have insurance. Some 65% of them have never owned a pair of glasses before.

“Our customers … have a little bit of disposable income at the end of the month, and they need to decide what they want to do with it. Do they invest it in a pair of shoes? Do they invest it in a smartphone? Or do they invest in a pair of eyeglasses?” Lapaire explains. “The idea was to be priced much cheaper than the entry level smartphone because we always knew we were going to fight for disposable income.”

Lapaire Glasses was priced 80% cheaper than traditional opticians at its launch in 2018, according to the founder. Currently the company’s glasses cost around $25 for the frame and lenses.

Lapaire asserts that in the case of $500 designer glasses, merely $10 goes towards manufacturing costs, while much of the rest is marketing expenses. “What’s expensive is asking Brad Pitt and Angelina Jolie to be on a massive billboard in Times Square.”

The company sought to disrupt the traditional high-margin, low-volume business model in eyewear. Similar to IKEA’s affordable furniture strategy, it adopted an approach of lower margins but higher volume. Key to this model is direct engagement with manufacturers, bypassing middlemen and selling only the company’s own brand.

To increase sales, the company introduced a payment-over-time option to help customers unable to pay the full cost upfront save for their glasses. For this, Lapaire drew inspiration from M-Kopa in Kenya, a company known for its flexible financing of home solar systems, smartphones and other consumer items.

“I was just taking ideas from everywhere,” says the entrepreneur. “What we realised is that actually some customers really wanted eyeglasses. They might not have the $25 right in their pockets but they were willing to put [down] maybe five, ten, or 15 dollars … and they knew that they would get the additional 10 … when they would get their salary.”

The company experimented with its deposit requirement, initially setting it at 50%. They found that a 5% deposit was too low, as it didn’t sufficiently commit customers and left a substantial remaining balance. Eventually, a 30% initial payment emerged as the sweet spot. “We have an extremely low default rate,” Lapaire notes.


Branching out


Initially, the company focused on selling glasses to company employees. But as these customers started asking for eye tests for their family and friends, Lapaire realised it was time to open a store. The first branch was set up in Westlands, Nairobi, although he chose not to follow the industry trend of picking prime retail locations.

“Branch is a big word – it was a small back office,” laughs Lapaire. “[Customers] would struggle so much to find it they would call us three times.”



Inside a Lapaire Glasses outlet.

 

After six months of starting the business, Lapaire had a thriving business-to-business (B2B) operation and an outlet in Nairobi – but he had bigger ambitions.

“We had two choices,” recalls the entrepreneur. It was either to focus on expanding throughout Kenya, given its vast market, or aim for a pan-African presence thereby proving that the company has a scalable and replicable model.

The decision was to take on the rest of Africa because Lapaire wanted to show investors “that the market is actually 500 million people and not just Kenya with 50 million people”.

The company raised $500,000 from friends, family, and the venture capital firm Saviu Ventures. Lapaire didn’t see this as gambling with others’ money. “I was very confident,” he says. “The B2B uptake was so positive that I felt … we found a goldmine.”

The founder relocated to Côte d’Ivoire to establish the business in the bustling city of Abidjan. He was eager to venture into Francophone Africa because the optical industry works entirely differently than in many English-speaking countries.

Lapaire describes the conventional process of acquiring glasses in French-speaking Africa as a “nightmare”. In these countries, individuals typically first visit an ophthalmologist, often located in public hospitals, for an eye test. This is followed by a separate trip to an optician to have the glasses fitted. This differs from English-speaking African countries, where a single optician visit typically suffices for both services.

“You have to go to this public hospital that you queue for hours. There’s no booking … You get a paper … You need to go look for opticians … You never know the price that you’re going to end up paying,” he explains.

In these countries, Lapaire Glasses’ affordable and streamlined model was even more attractive. Additionally, the cultural perception of eyewear in French-speaking Africa cemented Lapaire’s decision. “Wearing eyeglasses is a proof of success,” he explains. “If you take a picture from the Ivory Coast government and a picture of the Kenyan government – 90% of the people in the Ivory Coast government have eyeglasses, and Kenya only 10%.”

After starting in Abidjan, Lapaire was eager to test his model beyond more developed economies like Côte d’Ivoire and Kenya. He was curious if it would succeed in countries with lower GDP per capita. So again, he packed his bags and opened branches in Uganda and Burkina Faso. When these locations performed better than expected, he went on to open up in Mali, Togo, and Benin.


Eyeing profitability


In 2021, investment firms Saviu, EQ2 Ventures, and Sayani collectively backed the company with an additional $1.5 million. Then, in November 2023, Investisseurs et Partenaires, AAIC, Beyond Capital and FINCA contributed another multi-million-dollar investment, aiming to expand the business to 500 branches over the next five years.

Lapaire attributes the investors’ interest to the company’s “very healthy” unit economics. Operating with low capital expenditure, its branches are cost-effective to establish and typically staffed by just two to four people.

Although the company does have a website, over 95% of sales occur in branches. The business continues to offer free eye tests, generating revenue solely from eyewear sales.

While currently not profitable, Lapaire explains that the company has always been managed to be close to profitability. The largest expenses are employee salaries. On occasion, the company has hired senior staff earlier than might be ideal from a profit and loss perspective. However, following each significant hire, the aim is to increase revenue within a few months to offset the cost of the new salary.

With the necessary senior staff already in place for expanding to 150 branches and tripling revenue, Lapaire anticipates the business turning profitable by early 2024.


Market consolidation


After Lapaire Glasses rapidly expanded into seven countries, its investors cautioned, ‘You’re too spread out; you need to refocus.’ Lapaire also acknowledges the time, energy, and resources involved in learning the nuances of each country. As a result, the company paused its geographical expansion to consolidate its operations in the countries it already operated. In Abidjan, for example, it now has over a dozen locations.



Lapaire Glasses has 56 branches across seven African countries.

 

“We’re opening between 80 and 100 new stores next year (2024) in our current markets. We really want to become the number one player in our current markets, and then probably by the end of next year, we will be slowly thinking about a new country,” Lapaire says, adding that the company would likely look at bigger countries such as Tanzania and the Democratic Republic of Congo, which have populations of about 63 million and 100 million respectively.

“We will probably take a big market instead of taking these small markets like Benin [and] Togo – they’re great, there is demand … but it’s just a lot of admin and tax and regulation wise for an investment that is going to be limited. Typically in Benin and Togo we won’t be able to operate more than 40 branches … but if we’re talking bigger countries we could operate way more,” he adds.

The company has adopted a centralised structure to manage its pan-African operations. While each territory has its own country director and operations team, departments like marketing, finance, and supply chain are centralised and based in Côte d’Ivoire.

“It’s easier to have one focus point,” Lapaire notes. However, he admits this has its downfalls, particularly in terms of marketing where local context is sometimes needed.


Lessons learnt: Adapting and trusting


Lapaire stresses the importance of being willing to close down a business unit that isn’t working, citing his decision to abandon the initial B2B strategy focused on selling to company employees.

Although B2B sales were the foundation of the business and profitable, Lapaire realised that it wasn’t a scalable model. Challenges included complex unit economics, a finite number of potential corporate clients, frequent postponement of events, and staff often waiting idly for assignments to companies.

“I said we need to stop it and, yes, we will lose customers, we will lose revenue, but it doesn’t matter – the B2C approach, where we drive people to our location, is more scalable.”

Another key factor contributing to Lapaire Glasses’ success, he believes, is his ability to trust people. “I’m not a micro-manager.”

This approach proved crucial when the company expanded to Côte d’Ivoire, as it enabled him to relocate there and establish the business, while depending on his team in Kenya to manage operations. “In Kenya … I hired two people. I worked with them for three months and just gave them the keys of the entire business. I gave them access to the bank account, I gave them access to everything and they ran the business.”

“If you want to scale you need to trust people. You can’t scale if you’re on your own and you want to control everything,” he adds.



Jérôme Lapaire, CEO of Lapaire Glasses

Interview with Jérôme Lapaire
FOUNDER AND CEO, LAPAIRE GLASSES

 

Howwemadeitinafrica

 

 

 


 


 


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