00:00This one is for 14,000 and this one is for 4,000.
00:15There must be a difference, right?
00:17Actually, not at all.
00:19Whether it's Ray-Ban or Vogue,
00:21Prada or Michael Kors,
00:23they all are made by the same company.
00:25Their customer base is so big
00:27that they can make a country as big as India.
00:29And their 1.4 billion people
00:31unknowingly depend on Luxottica's products.
00:34To make a quality frame,
00:36it takes Rs. 350 to Rs. 1,500.
00:38So why do we spend more than Rs. 15,000 for them?
00:41Luxottica has put its eye on the entire industry.
00:45In this episode of First Day Fashion,
00:47we will understand the rise of Luxottica
00:49and see why we buy glasses at a thousand times more price.
00:54Maybe it's Luxottica
00:56which started with a small workshop
00:58and today controls more than 80% of major eyewear brands
01:03like Ray-Ban, Oakley, Prada, Versace and God knows what.
01:07Funny part, this company doesn't even put its logo on them
01:11when glasses were only needed for medical purposes,
01:13not fashion accessories.
01:15People were forced to wear glasses
01:18and there was also social stigma on it.
01:20At that time, production was also done by external subcontractors
01:24and this is where the story of Luxottica begins.
01:27Luxottica was founded in 1961
01:30in a village in Italy by Leonardo Di Vecchio.
01:33At that time, Di Vecchio was a skilled craftsman
01:36who made small parts and tools for spectacles.
01:39He saw that there was a lot of potential in the eyewear industry
01:42and with this vision, he established Luxottica
01:46which means light and optics.
01:48Luxottica had already understood that
01:51if you want dominance in the market,
01:53vertical integration is necessary
01:55which is very common these days
01:57but it was a unique thing in the 70s.
01:59This concept means
02:01controlling the entire production chain
02:04from design to manufacturing and distribution.
02:07By buying distribution companies,
02:09he controlled his entire supply chain.
02:12But there was still a big problem.
02:15His glasses looked like other competitors
02:18and they were also sold at normal prices.
02:21Di Vecchio understood that
02:23if his glasses are linked to a luxury brand,
02:26people will spend more money on them.
02:29Then came the age of television
02:31and everything changed.
02:33Celebrities made glasses a style statement.
02:36Tom Cruise's top gun aviators,
02:38John Lennon's round glasses
02:40and Men in Black and The Matrix's all-black sunglasses
02:44made glasses a part of fashion.
02:46Del Vecchio took advantage of this trend
02:49by partnering with designer brands.
02:51He approached major fashion houses
02:53proposing a unique deal.
02:55You give us license fees
02:57and we will give you your brand's logo glasses.
03:00This is how it started with Giorgio Armani.
03:03After 30 years,
03:04hearing the name of their partnerships,
03:06it seems that we have come to Paris Fashion Week.
03:09Prada, Chanel, Burberry, Michael Kors,
03:12Ralph Lauren, Tiffany, Versace
03:14and on and on.
03:15Del Vecchio bought U.S. Shoe Corporation
03:18because they had the largest optical retail chain in the US,
03:21LensCrafters.
03:22After that,
03:23they filled Luxottica's glasses there.
03:26In 1995,
03:27only 5% of sales from here were from Luxottica.
03:30Today, more than 90% of LensCrafter's sales
03:33are from Luxottica's glasses.
03:35This was a genius move.
03:37But we didn't call them evil geniuses.
03:40First, U.S. Shoe rejected the offer.
03:43Del Vecchio brought the board members to his side
03:46in his clever ways
03:48and bought them again.
03:49By giving the products a perfect placement,
03:51he tried to attract the customers
03:53directly to his glasses.
03:56While he completely ignored the competitors.
04:00But there was a problem.
04:02They had to give royalty to the fashion houses.
04:05For more profits,
04:06Del Vecchio wanted to buy the brands himself.
04:09Like Ray-Ban and Oakley.
04:11Even in this story,
04:12we see their evil genius.
04:15Oakley made its niche among extreme sports enthusiasts.
04:19But Luxottica acquired Sunglass Hut.
04:22Where Oakley's maximum glasses were sold.
04:26On top of that,
04:27they made a carbon copy of Oakley's best-selling models.
04:30Eventually, Oakley lost to Luxottica
04:32and merged with them.
04:34Luxottica's disproportionate size and power
04:37is stopping the industry competition.
04:39This industry has a lot of profits.
04:42And there has been no serious innovation for years.
04:45In 2018, Luxottica merged with Essilor Group.
04:49They were the world's largest lens manufacturer.
04:52Del Vecchio's plan was simple.
04:54Control the lens-making supply chain
04:57and finish off their competitors on another front.
05:00By making Essilor's lenses in-house,
05:02they launched a masterstroke
05:04to reduce costs and gain full control over pricing.
05:08They choose affordability, eco-friendliness and sustainability
05:11over luxury branding.
05:13New competitors are emerging to meet this demand shift.
05:17Like Lenskart,
05:18which is offering stylish designs at a lower price.
05:21And is challenging Luxottica's monopoly.
05:25We are slowly becoming a lens-wearing species.
05:28We may need screens, LED lights,
05:30or an aging population.
05:33But demand is increasing everywhere.
05:36Today, 70% of adults in developed countries need lenses.
05:40And every other child in India.
05:43Are so many prices justified in the name of luxury?
05:47Let us know in the comments.
05:49And if you think twice before buying Prada or Ray-Ban
05:53because of this video,
05:55then a like and subscribe is a must.
05:58I am Osanaka.
05:59I'll see you soon.
06:06www.osanaka.com
Comments