Luxottica, the maker of Ray-Ban, faces competition from Warby Parker's growth plans.

• Warby Parker debuted on the stock market in September in a direct listing.
• Dave Gilboa, co-founder, stated that the company is shifting its focus from being solely a glasses manufacturer to providing a comprehensive vision care solution.
• EssilorLuxottica, with a market cap of around $87 billion, is much larger than the firm, which Gilboa believes could grow faster than the rest of the industry.

Eyewear company is at an inflection point in its 12-year history.

The company has been recognized as a pioneer in direct-to-consumer sales, where businesses sell directly to customers without intermediaries, and has served as an inspiration to other companies such as Away and Allbirds.

By offering glasses at a starting price of $95, including lenses, Warby Parker gained recognition for selling glasses online and competing with incumbents such as Ray-Ban.

Warby Parker, which debuted on the stock market through a direct listing on September 29 and experienced a surge in stock price that day, is now moving forward with its next phase of growth: expanding its offerings to include not only glasses but also services, as co-founder and CEO Dave Gilboa shared with CNBC in a phone interview.

"We have transitioned from being a glasses company and eyeglasses brand to a holistic vision care company, where customers can now purchase glasses, eye exams, and prescriptions from us," Gilboa stated.

In 2020, Warby Parker's customers spent an average of $218 each, up from $188 in 2018. The company anticipates growth from customers who purchase progressive lenses, eye exams, and contacts. These "holistic vision customers" have the potential to spend $500 or more annually after their initial purchase, which is double the amount for a glasses-only shopper.

Another way to expand is through physical outlets. Currently, Warby Parker has 160 locations in the U.S. and Canada, and Gilboa said it has the potential to increase that number to 900, though he said it will take time to achieve that goal.

Can Warby Parker compete with EssilorLuxottica, the $85 billion French-Italian giant resulting from a 48-billion-euro merger in 2018, despite its current market cap of $3.37 billion?

Oliver Chen, an analyst and managing director at an investment bank, stated that Warby Parker has a chance against the European company. He argued that Warby Parker is a disrupter in the profitable segment and offers better value than others.

In the 12 months to June 30, 2021, Warby Parker generated $487 million in revenue, a 33% increase from the previous year. Although the company was profitable on an EBITDA basis, making $27 million, it recorded a net loss of $53.2 million.

EssilorLuxottica operates as a multi-brand manufacturer, producing its own labels such as Ray-Ban and licensing for some of the world's largest luxury brands, including Chanel, Versace, and others. The company produces around 80 million to 90 million pairs of glasses annually and made 5.5 billion euros in revenue in the third quarter of 2021, selling in North America, EMEA, and Asia.

Rebecca Harwood-Lincoln, an eyewear industry consultant, views operating in various aspects of the market as a "fabulous concept."

The company bought out retail outlets such as Sunglass Hut, Lenscrafters, and David Clulow, which granted them automatic distribution of their products and allowed them to benefit from the margins. Last year, the firm acquired Dutch eyewear retail GrandVision in an $8.5 billion deal.

EssilorLuxottica sees opportunities in the growing number of people who need glasses but don't yet own them in Asia, particularly in China and Latin America. The company is focusing on innovation, with its smart glasses collaboration with Facebook, Ray-Ban Stories, and Stellest, a lens that can slow the progression of short-sightedness in children.

Can Warby Parker compete? "We don't spend much time thinking about our competitors and, as a direct-to-consumer company, we receive a lot of feedback on what's working well," Gilboa said. "We anticipate growing significantly faster than the overall industry in the coming years and decades, but we don't focus on market share or becoming the largest in our category."

EssilorLuxottica may not be significantly impacted by Warby Parker's potential market share growth, as Mark Mahaney, a senior managing director and analyst at , suggests.