Week 1: The story of boAt in brief
How an Indian electronics brand gave the Chinese (brands) a tough time
INTRODUCTION
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Nothing we learn is ever wasted ~ Eleanor Roosevelt
STARTUP IN FOCUS
The story of boAt
BoAt is an India-based consumer electronics brand established in 2015 that markets earphones, headphones stereos, travel chargers and premium rugged cables.
BoAt became a household brand a few years ago owing to its reasonably priced and stylish headphones/earphones that struck a chord with the youth and recently came into spotlight yet again thanks to SharkTank India, which featured the co-founder and CMO(Chief Marketing Officer) Aman Gupta as one of the sharks in the show.
But what made boAt really stand out in the already crowded electronics market and carve the largest market share in just a few years after their inception? Let’s delve deeper.
I/ Ideate: Solve a problem and solve it damn well
boAt originally started selling wired and indestructible cables. Ever found yourself borrowing a charging cable for your phone just because yours stopped working as the wire covering just wore off?
Or the time when you had to ditch your favourite wired earphones because you were tired of adjusting the wire of the earphones by twisting and turning it by every angle possible to hear that latest track of Arijit Singh or Justin Bieber on loop?
boAT entered the market with its sturdy cables that solved the perennial issue of breaking of mobile charger cables with the use of Kevlar fibre to extend the life of connector cables. They sold around 20k units in less than an hour of the launch of the product!
Now that they had a foot in the door, how did they compete with the already crowded and cutthroat electronics market in India, dominated by China?
II/ Identify: The market gap and dive right in
The Indian mobile accessories market is valued at about $250bn+ and about to almost double in value in the next 7-8 years to $400bn+ . From charging cables to smartwatches to Bluetooth Earphones, the market is heavily saturated now by brands from China as well as from India and other countries.
The earphones segment can be broken down into different segments namely:
Ultra Premium
Earphones costing more than ₹15k-20k with leaders as Bose and Apple fall into this category.
Premium
Premium category earphones ranging from ₹10k to ₹15k with JBL being the category leader.Sub Premium
₹5k-₹10k earphones led by Sennheiser consist the sub premium range of earphones.Affordable
The affordable segment is where BoAt targetted to launch its products.
Two major changes in the market around the same time boAt launched helped boost its growth and catalysed the adoption across the country.
a. Cheap Internet
Jio launched in 2016, around the same year boAt launched.
With unlimited high speed internet at their disposal, Indians started consuming content on the internet like never before and the demand for mid-range and low-range phones catapulted.
More people consuming videos and music online meant greater demand for earphones and other mobile accessories!
b. Companies stopped shipping headsets with phones
Mobile phone companies used to ship the earphones along with the charger and phone until a few years back.
About 7-8 years ago, these companies stopped shipping earphones and even if they did, they were your basic earphones that were uncomfortable and not durable.
This change in approach of the phone manufacturers enabled earphones and wearable brands to move in and capture the wearable headset market.
Other factors such as ride aggregators (Ola/Uber) making waves in the market by roping in drivers to their application also assisted in the sales of the affordable earphones.
Does the above approach remind you of another brand that followed a similar strategy?
It was 2015 and I was all set to buy my first smartphone. I didn't want to splash my dad’s money on the Apples and Samsungs nor did I want to settle for the Xiaomis or Nokias. From a plethora of options available in the market, I set my eyes on this Chinese phone that newly launched in India, OnePlus One.
OnePlus went on to become the leading smartphone brand in India, capturing more than 34% of the market share by applying similar principles in identifying the gap in the market and going aggressive with its ad campaigns.
III/ Leverage Marketing and Sales to the fullest
Brands that are consumer facing often have narrow margins when it comes to profits. They have to rely on the scale of their sales to ensure they have a strong foothold in their respective markets.
BoAt leveraged the power of sales and marketing to the fullest by going all out with their targeted marketing campaigns.
It started with roping in Hardik Pandya, an Indian cricketer, in 2018 in one of the ads, followed by other notable cricketers like Rishab Pant, Shikhar Dhawan, etc.
This move not only created the visibility of boAt among the youth (given how crazy Indians are about cricket) but also increased the aspirational value of the product.
Tangible vs Perceived Values
Sure, your logical reasoning and your careful comparisons of products before buying pre date the chances of you getting influenced by celebrity endorsements. But imagine the scenario at scale in India, if most of your school or college friends are using a particular product (say they got influenced by the ads) and give a good review about it, won’t you want to jump on the bandwagon and at least try the product?
The tangible value of a product is based on the features it consists of and the related benefits those features provide to customers. For instance, a car has value because of its usefulness in transportation as well as its emotional value in helping people feel a sense of status.
The perceived value is determined by the kind of image the brand creates about itself through promotions, target audience, and celebrity endorsements.
In the earphones market, only a few trained ears can recognise the difference in the audio quality of multiple earphones. Majority of the image of an earphone is created through perceived value.
Not only cricketers, boAt brought in Bollywood celebrities like Kartik Aryan, Kiara Advani and Guru Randhawa to promote their range of products.
boAt even manufactured a line of products in collaboration with Masaba Gupta, a fashion designer, and Bira 91, an Indian craft beer brand.
All these partnerships and efforts at promotions paid off as the brand had strong products to justify the marketing that they were doing. People were drawn in due to the marketing efforts but stayed thanks to the durability and quality of products.
Ending Notes
boAt has went on to become a household name these days due to its strategic marketing and quality products. I hope the short case study was helpful and you gained some kind of perspective on how startups tackle problems and come up with solutions!
Sources
boAt website: https://www.boat-lifestyle.com
Indian Silicon Valley by Jivraj Singh Sachar
ThinkSchool
Barbershop with Shantanu
I am thinking of covering lessons from a podcast in the next issue along with another story about a startup - let me know if you have any suggestions!
