With this piece, we take a look at the story of boAt in India. the boAt is an Indian Consumer Electronics Startup, that has revolutionized the way people listen to music. Only within 5 years of its operations, it has become the market leader with a whopping 27.3% market share in the earwear segment, selling 8,000-10,000 units every day in 2019! How did boAt achieve this? Let’s take a look at the success story of boAt.
We’ll start by looking at the recorded music industry of India, existing competitors, the journey of boAt, its communication strategy, and finally the future.
Let’s jump right into the piece!
India’s Music Industry:
The revenue generated from India’s recorded music industry in 2019 stood at INR 1278 Cr and out of this, streaming services accounted for 73.2% i.e., INR 935 Cr, while, the other digital and physical services made up to 10.7% of the revenue. So what are these streaming services we’re talking about? Take a look at the following image:
Driven by low data rates and increasing smartphone penetration, the country is witnessing higher traffic towards legitimate sources of music such as OTT platforms, video streaming platforms, etc.
Related: Take a look at the Audio OTT Economy of India
Building a differentiation in a highly competitive market
To cater to such an extensive and diverse demand, a lot of audio OTT players have started competing in the space. And, to supplement their growth, global companies such as Apple, JBL, Sony, Bose, and Sennheiser have now started offering output devices ranging from wired & wireless earphones and Bluetooth headphones.
But the obvious bummer with these players was the pricing. The prices at which these players were offering their products were way too high vs consumer expectations. We all know India is a price-sensitive market. Secondly, a lot of consumers were accustomed to using bundled headphones that come packaged with the smartphones and hence did not found viable to pay a premium price for just the audio accessories. Third, the pirates and Chinese Products. Street vendors who were selling these counterparts at a much lower price but lacked quality and were not durable. This unfortunately set a perception in the market that paying a premium or “anything extra” for a set of headsets is pointless.
This is where boAt found the opportunity. Before we get into the opportunity itself, let’s understand the Journey of boAt.
The story of boAt
The two founders Aman Gupta and Sameer Mehta started Imagine Marketing in 2014, the parent company of boAt, with an initial capital of ₹30 lakh, which they raised from family and friends, this investment helped them leap to their first Product in 2016 — the boAt BassHeads225.
Initially, the founders limited their channels to popular e-commerce platforms like Amazon and Flipkart. But, in May 2018, it caught traction, when Fireside Ventures invested ₹6 crores and its founder Kanwaljit Singh became a key member in the company’s offline strategy. Under his leadership, he opened a few offline stores and in 2019, around 20% of its sales came from these stores.
The insights boAt discovered were simple, yet, powerful ones. During their target consumer (Millennials) research well they found the following insights:
- This generation in India looked for quality and affordable products. They looked more for a great experience and value for their money invested
- They wanted the accessories which would go with their lifestyle and are durable
- They preferred bass-focused music
- They wanted easy to use products (ex. cables which were easy to untangle)
And hence, they launched a range of products that created a kind of experience that plugged their consumers into Nirvana. Today, their portfolio includes an extensive catalog of headphones, earphones, speakers, travel chargers & premium cables.
Going by the figures, boAt clocked revenue of ₹108 crores in FY2018 from only ₹27 crores in 2017, a hike of almost 300%. They have a repeat rate of 30% and are eyeing a revenue of ₹500 crores by 2021.
So, what was their strategy to reach this number of audience in such a shorter time?
boAt has a community for their audience, all the users of boAt products are called ‘boAtheads’. Possibly one of the few “Indian” brands to do something on these lines for headsets/earphones. The founders believe in the consumer-first approach, hence they pay attention to what consumers are expressing and then build and modify their products accordingly.
Related: Take a look at the rise of Kia motors in India
They Sponsored popular youth events like Sunburn, Lakme Fashion week and IPL which striked the right chord of the millennials.
They roped in Brand Ambassadors to whom the audience could relate to, that is, their core target audience. They launched campaigns which further strengthened the brand appeal among the musicophiles. Here are a few of them:
Soul of the Musicians
Sound of the Champions
Glamour of the Stars
The Journey towards the future
Except for the chargers and cables, boAt has been manufacturing its products from China. However, with the mobile device market embracing ‘Make in India’, the surrounding ecosystem devices market will soon follow.
With more people consuming data and screen getting more personal, the demand for personal audio devices is ought to grow. Encashing the opportunity, boAt is bound to reach its next milestone of achieving more than $70 Mn in sales within the next five years.
Lastly, the brand has recently launched its new products – smartwatches and trimmers for men. Which seems like a little bit of stretch. Do you think, along with being the market leader in the earwear segment, it will capture a significant share in Men’s grooming category?
Let us know your thoughts. That’s it for the piece. Hope you liked it!
Join our community of 5000+ readers by subscribing to our newsletter.