Indian startups – Remember when smartphones first entered the Indian mainstream market more than a decade ago? Around the same period, another type of device began to gain popularity: earbuds. Because of the ease of access to multimedia content via smartphones, most new smartphone owners used to be on the lookout for a reliable pair of earphones or headphones. But all they could obtain were either pricey devices from giants like Sony, Philips, and Bose, or low-cost Chinese knock-offs.
Despite this, the personal audio device market in India experienced a surge. However, these products were not developed for millennial or Generation Z shoppers at the time. To make matters worse, the majority of them were prohibitively expensive, while Chinese products were frequently of low quality, lacked a full warranty, or failed to provide dependable after-sales care. This meant that if a customer inadvertently destroyed his or her equipment, they would have to purchase a new one.
Aman Gupta and Sameer Mehta were among the first to recognize this disparity. In 2014, the duo founded Imagine Marketing, which gained the exclusive distribution rights for House of Marley headphones, earphones, earbuds, and audio systems in India.
“We conducted extensive research into what customers desired.” We recognized the consumers’ pain points and wants, and we thought, why don’t we produce a product that is as excellent as these multinational brands, has the durability that Indians desire, and sounds the way Indians prefer with deep bass and loud sound output? “We even gave the products a funkier and more aspirational look,” Mehta, who co-founded boAt with Gupta, explains. Earphones with tangle-free flat cables were a noteworthy breakthrough that enchanted many customers and brought numerous word-of-mouth customers to the business. While that is how they began, they have gone a long way since then, learned a lot along the road, and continued to expand the brand. “No, we didn’t.”
According to the International Data Corporation (IDC) Worldwide Quarterly Tracker Q3CY2022 report, boAt has emerged as the second largest brand in the global wearables market, comprising everything from headphones to earphones and even smartwatches. Not only that, but for the previous two years, the company has dominated in both the hearables and wearables markets in India. While boAt began with a little investment of Rs 30 lakh, by the end of FY23, it had amassed sales of Rs 4,000 crore.
While Gupta and Mehta were establishing boAt, many others in India were establishing other brands such as Boult, Noise, pTron, Fire-Boltt, and so on. They have managed a paradigm shift in the country by working together.
Getting it Right
When Varun Gupta founded Boult Audio in 2017, he was selling ranging from a few hundred to a thousand wireless audio devices per month. However, Boult now sells between 500,000 and 800,000 copies per month. “In a good month, we’re able to sell over a million units when there’s an event period, or a big sale event,” says the company’s Co-founder and CEO.
It all began for him with his previous start-up, Brand Hawkers, an e-commerce consultancy service that assisted brands in transitioning from offline to online sales. Around 15 of the 70 brands he dealt with were in the audio area. “On the demand side, I was very connected to the product line in terms of emotion—what was working, what wasn’t.” When you work closely in any sector, you begin to notice holes. I presented these holes to my clients, but they were uninterested in filling them. They responded, “You just sell the goods and don’t worry about how we [could] improve them, how [to] price them, what colors, and so on.”
However, going offline was a waste of money for these enterprises at the time because consumers were hesitant to invest in a new Indian brand. The brand’s channel distribution costs were costly, and its reach was limited. However, e-commerce platforms provided the ideal solution. For starters, their reach was not limited to the top-tier cities and towns, allowing these products to be made available in Tier II, III, and IV cities and towns. Second, rather than accepting the shopkeeper’s word for it, shoppers might verify the community evaluations on e-commerce platforms before making a purchase. This enabled Indian brands to reach a broader audience.
Surprisingly, it turned out to be a win-win situation for e-commerce giants as well, as they were able to eliminate the non-branded products that were prominent on their platforms. A fantastic example is how the home-grown business pTron has managed to have at least 20-25 percent of its products in the Top 100 on Amazon. Between 2014 and 2019, the company sold smartphone accessories on its own platform but realized it couldn’t compete with the e-commerce giants’ supremacy. As a result, it chose to collaborate with Amazon. “We knew there was a huge demand for good quality products at the right price point,” says Ameen Khwaja, Founder and CEO of pTron, adding that the company decided to focus on this market.
While the Make in India initiative began with smartphones and other types of electronics, it has also encouraged the production of wearables in the nation. The government has also aided by imposing taxes on fully constructed units imported into the nation. As a result, approximately 70-85% of these accessories are assembled in India. Furthermore, industry leaders are urging the government to implement a production-linked incentive program for the category in order to source more parts locally. “Two-thirds of smartwatches are currently produced in India, and nearly half of hearables are produced here,” says Anshika Jain, Senior Research Analyst at Counterpoint Research.
In H1CY23, India’s smartwatch market increased by 90% year on year (YoY), driven by affordability, rising customer demand, and the availability of a wide range of alternatives. The True Wireless Stereo (TWS) category rose by 42% within the same time period, while the neckband market fell by 17%. However, the rate of increase is projected to begin slowing soon. According to Gupta of Boult, while headphone sales have begun to level off, they are still rising 40-50 percent year on year. Smartwatches had also been expanding at a rate of approximately 300 percent, but this is expected to stabilize at around 100 percent and then fall to roughly 50 percent in FY25.
Separately, pTron intends to broaden its product line with sound bars and party speakers. It also intends to enter the gaming market with headsets, keyboards, mice, and other gaming equipment. “We have an excellent manufacturing unit.” We can expand this and consider exporting as well. “We can also do OEM-ODM (original design manufacturer) work for brands in Europe and the United States,” Khwaja adds.
However, in the end, all brands recognize that keeping the client at the center of their strategy is the greatest way to ensure that their good fortune continues. “Whenever we launch a new product, Aman and I track the product and its reviews every two hours, even today,” says boAt’s Mehta. That is how fixated we are.