You are plugged into Nirvana. This is what my earphones say when I turn them on. If you have still not got what I am saying, this story is for you. I am talking about my earphones from boAt, a brand that has sky-rocketed its India’s presence in the wearables consumer electronics category in a very short span of time.
Coincidentally, I am writing this article after listening to good soulful music on my boAt earphones! boAt has managed to launch affordable, stylish, and excellent quality consumer electronics. It offers a range of products from headphones, earphones, speakers, to travel chargers and premium cables.
The growing smartphone ecosystem in India has given a big boost to accessories like headphones and earphones. There has always been a plethora of brands available like Apple, JBL, Sony, Bose, and Sennheiser, but there were two problems:
- Firstly products from these companies were too expensive for the price-sensitive Indian consumer. The prices at which these players were offering their products were way too high vis-a-vis customer expectations.
- The second challenge was that many consumers were habituated to using earphones that come packaged with smartphones. Hence, they did not find a reason to pay a premium price for just the audio accessories.
Also, the street vendors selling Chinese products and second copies of well-known brands came at a much lower price but significantly lacked quality and durability. This is where boAt rocked the opportunity.
The success of boAt lies in identifying the needs of its target segment: Millennials. The target audience looked for quality that can give them a great experience but at an affordable price.
They also wanted the accessories that could match with their lifestyle and are durable.
Millennials wanted the convenience to use products. (for example wires of earphones or cables which were easy to untangle)
Last December, boAt was listed as one of the world’s top five brands in market intelligence firm IDC’s wearables and hearables list along with stellar names—Apple, Xiaomi, Huawei, Samsung, and Fitbit (ranked joint fifth with boAt). The recent mass shift to work-from-home got sales of Audio- wearables soaring. With so many work-related calls a day, it is difficult to make a video-call or conduct an online meeting without headphones. Headphones business of boAT contributes to 60% of its business.
The pricing of boAt products is very sharp, which makes boAT’s products aspirational yet affordable.BOAT cofounder Aman Gupta when asked about the popularity among millennials
Paradigm shift in Audio industry:
Millennials today, own multiple pairs of headphones each for communication, travel, web series, movies, and audio playback. With the screen and screen time getting more personal, there is a huge demand for personal electronic devices.
Also complimenting to it is rising demand for the related accessory market including that of headphones. So, growth in digital devices is aiding the category growth of the Audio industry.
What gave boAt an edge was innovations specific to Indian conditions. As the weather is mostly humid throughout the year, boAt launched water-resistant and sweat-proof hearable products. Products were refined to make them dust-resistant.
Most of the boAt’s products are still manufactured in China – A tricky proposition for a home-grown brand. The co-founder says it’s not possible to move the supply chain over-night but they will definitely move the supply chain as they are going forward.
The chargers and cables are already made-in-India. Sameer Mehta, CEO of boAT says, they have set an R&D team in Bangalore, and over the next two to three quarters, we will see some products of boAT made in India.
There is one key that separates boAT from the likes of Micromax (homegrown but faded because of Chinese brands and no local manufacturing). boAt is an aspirational brand and definitely not the cheapest in the market.
Community of boAt users:
boAt calls its customers- ‘boAtheads’. All buyers who buy any accessory of boAt are made a part of the ever-growing clan. The term boAthead gives users a feeling of belongingness.
What has worked for boAt is the community framework- The Community of fans they have built online, which is quite commendablePankaj Mirchandani, who is the managing partner at Rhythm Corner Alaknanda
Another advantage of the community to the boAt as a company is in the product development. It starts from the user feedback that boAt receives on e-commerce websites from its loyal boAtheads (boAt’s community comprising over 2 million loyal consumers).
Cricketers like Hardik Pandya, Rishabh Pant, K.L. Rahul, Prithvi Shaw, Shikhar Dhawan, and Shreyas Iyer are brand ambassadors of boAt. Also, Bollywood celebrities Kartik Aaryan, Kiara Advani, Diljit Dosanjh, and musicians Neha Kakkar and Naezy—are glamorous brand ambassadors who endorse the company’s products on social media and other digital channels.
The Founders call them Chief Technology or Chief Lifestyle officers. The growth of these ambassadors in their careers is similar to the growth trajectory of boAt: From an unknown to the most lovable.
boAt has quite conveniently overlooked the traditional way of advertising which usually means 60% on ATL (above the line marketing), 30% on BTL (below the line), and 10% on digital. For the first three years of boAT, the advertising was 100 percent digital. And recently only, they did TV advertisements for IPL 2020 that too with a powerful message:
The voices that doubt your sincerity, your hard work, the doubts that bring down your faith. In these doubtful moments you do what you got to do- ‘Listen to what matters!!’
In the first week of January 2021, boAT has raised about $100 million from a private equity firm named Warburg Pincus at a valuation of about $300 million. Audio electronics giant boAt plans to use the funds to boost its R&D capacity, expand its portfolio, and accelerate manufacturing its products in India. Before this, Fireside Ventures had invested INR 21 crore as early investors.
The Road Ahead:
Almost 60 -70 percent of boAt business is online. Now, boAt wants to address the issue of reaching consumers through the offline channels. “boAT started offline (sales) only in 2019. A big part of Indian geography is still offline and you just cannot ignore that,” says Gupta, adding that boAt is working closely with the likes of Croma and Vijay Sales on offline sales strategies.
They haven’t gone beyond the top 10-20 cities, and still have a lot of room to grow in India and then go overseas with similar market demand. boAt is also planning to diversify in gaming products like headphones, keyboards, mouses, etc. in the next quarter or so!
To me personally, it’s such a proud moment as an Indian brand is giving foreign brands a good run for their money. And I am sure that with recent funding of $100 Mn boAt will make an effort to make India its manufacturing hub too. It would be interesting to see how boAT achieves similar success with its new product portfolio in the consumer electronics category in the coming months. Let me end this article in the boAt style (when you switch off its earphones): Adios Amigos!!
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