The inside story of how boAt, a homegrown consumer electronics upstart, took the wind out of the sails of foreign wearables giants
December 2016. The Chinese storm had started to batter India. The biggest Indian handset player Micromax—and second in the smartphone pecking order after Samsung—had been brutally cut to size: From 17 percent market share in the January-March period to five percent in the December-ended quarter. Lava, Karbonn and Intex, too, were on skid row. The forecast looked gloomy. Chinese players—led by Xiaomi, Vivo and Oppo—were likely to kick up a tsunami.
Meanwhile, in Gurugram, Aman Gupta knew there was something terrible about the timing of his new venture, a consumer lifestyle accessories brand boAt, which he co-founded with Sameer Mehta in November 2016. “Indians were getting out. Chinese were coming in,” he recounts. “People started writing our obituary even before we were born,” he says. The boat was likely to get rocked before it could set sail. Gupta, though, was keen to navigate choppy waters. “I was looking for my kick.”
Kicks did come from all fronts, and were of all kinds. Banks didn’t believe in his story and declined to lend; investors shied away from putting money in an Indian hardware venture which was pitted against the Germans, Japanese, American, Chinese and a battery of local players; consumers didn’t know what boAt was as there were over 200 brands vying for attention. boAt, recalls Gupta, was entering into a commoditised market.
Undeterred, Gupta kept at it. The co-founders pumped in ₹15 lakh each and set sail their bootstrapped journey by selling mobile cables and chargers. In the first year, it weathered the storm to post sales of ₹31 crore, and a tidy profit of ₹1.67 crore. In the next fiscal, it added wireless earwear products and speakers to its portfolio, and grew close to four times. “We had an earn rate, and a zero burn rate,” Gupta claims.
Fast forward to December 2020. boAt has become the fifth biggest wearable brand in the world in the third quarter this year. Back home, it has overtaken Apple, Samsung, and Xiaomi to become the biggest. Revenue stood at ₹701 crore in FY20, and profits at ₹49 crore, the brand sold 15,000 units every day within a three million-plus online user community, it tied up with six Indian Premier League (IPL) teams this year, and roped in as many as 14 brand ambassadors from Bollywood and cricket. “We have disrupted the space, and we will continue doing that,” he says. The high of becoming the fifth biggest in the world, Gupta underlines, lasted just for a day. “Now I am looking for another high, another kick,” he smiles.
boAt, reckon industry analysts, got the wind in its sails at the right time. “It identified the gap in the market quite early,” says Jaipal Singh, associate research manager (client devices) at IDC India. The earwear market, which was just a few thousands units in 2017, started to become big from 2018 onwards. The Indian market size was 1.6 million units in 2018. A year later it exploded to 8.5 million.
The uptrend got a massive tailwind in the pandemic year. As work and school shifted to homes, laptops and earwear sold like hot cakes. In the first nine months of 2020, the market pole-vaulted to a staggering 17.3 million. What also helped was a corresponding fall in the price of the products: Average price of true wireless stereos dipped by 48.6 percent year-on-year to $57 in the third quarter this year. Unsurprisingly, the market bloated to 10 million units in this period. boAt’s focus on the entry-level segment, finding a sweet spot in terms of pricing, aggressive marketing and advertising and a tight focus on quality aided its exponential growth, adds Singh.
A sharp focus on quality, and a differentiated positioning, is what helped boAt when it started. In fact, boAt did a Havells. What shot the electrical equipment label into instant limelight was its unique value proposition: Wires that don’t catch fire. boAt did something similar with the cables, the first product it rolled out. It identified the pain point of the users: Frequent snapping of the mobile charging cable.