Boat's journey to becoming the 5th largest wearable brand
Boat is one of the most incredible and astonishing brands in the Indian start-up ecosystem. What is unique about it as well, is that within very limited time, it has garnered a market share of 35% compared to below 10% for its Indian peers Realme, Noise and a couple of others. Pleasantly, it has managed to do all of this while being profitable and exhibiting multi-fold growth.
So what is it that propelled this brand while the rest of the pack in the economy segment for audio devices (wireless speakers, earphones etc.). Ofcourse, the answer is not a simple one lever solution, but a combination of industry changes as well as change in the overall market strategy adopted by Boat. Let us look at some of the important factors
1. Actual Value vs Perceived Value:
One is the actual quality of the product, while the other is the value perceived by us (influenced through marketing etc.)
If we go back to One+, just after One+ 6 was launched, and they tied up with Robert Downey Jr. and suddenly there was a shift in the perceived value of the brand. Make no mistake; the product in itself was great to begin with. Add a positive perceived value to that and it yields great market power. For a time, One+ sold more Phones in India than Apple and Samsung combined. Another thing that should be kept in mind is, the market opportunity. One+ was in a pricing range, where there were not too many players at that time (Rs. 35k-55k range)
Some of the same characteristics are visible in Boat – It created a perceived value, roping in Hardik Pandya as a brand ambassador in 2018, when the market share of other players in the economy segment was less than 10% combined.
2. Type of Product defines the strategy (In this case a commodity)
In our research, we also found that the quality of sound is same to the untrained ear, so in such a market (commoditized goods), it becomes even more important to separate oneself from the heard by creating a brand. Other companies in the space are now trying to brand themselves.
Airpods is the Xerox of the wireless earphone market, and there is a reason for that. They have excelled in creating a perceived value that far outweighs the benefit to the customer.
3. Constantly improving the product basket
As we have mentioned in previous blogs, we are not fans of companies trying to do get into unrelated businesses without any synergies. Boat has continued to add related products to its portfolio, where it would have some competitive advantage with regards to design, production, marketing or distribution to its portfolio; It is also looking to foray into smart watches and other related segments.
To sum up, Boat’s success has largely been due to a combination of factors including smart marketing and product addition, but also price positioning in a segment where it could compete with the others; On the business end as well, they have maintained fiscal responsibility, not running huge losses to gain market share which is something we admire because the culture stems from the top.