Spread of coronavirus for more time will definitely lead to development lag and impact output
With screen space getting more personal, there is a huge demand for personal devices like headphones
Growing smartphone ecosystem has given a big boost to accessories like headphones. While the likes of Bose Corporation, Sony Corporation and Bang & Olufsen are go-to brands when it comes to premium headphones in the affordable segment, a-Delhi based company boAt lifestyle has captivated millenials with its attractive pricing, cool-looking products and grass root understanding of what young consumers want. In an interview with Mint, Aman Gupta, co-founder, boAt lifestyle, elaborated on the philosophy behind boAt, its future plans, impact of coronavirus and why manufacturing in India is important.
How is boAt doing in India and what is the future target?
Going by the figures, we are currently number one in India in headphones. Though there is no data to back it as there are no market reports for headphones. We have sold 8,000-10,000 units every day in 2019 and we are hoping to sell over 10,000 units every day this year. We registered ₹100 crore in FY18 in gross sales and eyeing ₹500 crores by 2021. We have got a 30% repeat rate.
How dependent are audio companies on China? What will be the impact of coronavirus on business if the situation doesn’t improve?
Almost 99% of headphones market in India, which includes headphones above ₹500 are made outside, mainly in China. If (spread of ) coronavirus continues for more time, it will definitely lead to development lag and impact production. We had a sale planned in February and we had to cancel it so that we have enough products for next month. We are closely watching what is happening there. We have got products in buffer till March 15. If the situation doesn’t improve, we will consider getting them by air.
We are seeing phone companies manufacture phones in India. When are audio companies like boAt going to start it?
The ecosystem is getting developed as we speak. Xiaomi Global and Samsung have started manufacturing in India. I think with the mobile device market embracing Make in India, the surrounding ecosystem devices market will start developing too. I don't think the time is far when we will also start making products in India. Our chargers and cables are already made in India. We are also moving in that direction because it's getting a little difficult amid Chinese trade war with the US and now due to coronavirus. The whole market is looking beyond China.
How has the audio industry in India changed in the last few years?
Earlier we used to get free headphones with mobiles and people expected them to be free. Today’s generation, especially millennials, own many pairs of headphones for communication, travel, movies and audio playback. With the screen getting more personal, there is a huge demand for personal devices. With that, the related accessory market including that of headphones is also growing.
What makes boAt so popular with the younger generation?
Our pricing is very sharp, which makes our products aspirational yet affordable. Also, our product development starts from user feedback we get on e-commerce stores and from our boAtheads (boAt’s community comprising over 2 million loyal consumers) and we take their feedback into account for our next products. We also work closely with designers so our products looks cool and fashionable.
How does boAt manage to keep the prices of its products low?
Our prices are not cheap. Our ASP (average selling price) last year was ₹700 and this year its ₹1,100. We are somewhere in between cheap and premium. In fact, we taught the competitors how to price the products. For instance, Harman International has launched their sub brand Infinity, just to compete with us. If the price is right, people actually don’t mind spending.
Has boAt got any plans to venture into high-end segment?
Our ASP has gone up 30% over the last year. We have started taking the ASP into account as technology is improving too. We also saw an increased interest in wired to wireless and wireless to twin wireless. Quality of our products has improved. Noise cancelling (headphones) was also sold as a luxury item in India, which is where brands like us come in and democratise the technology. We just launched noise cancelling headphones for ₹3,000. But we are not going to be very crazily expensive either.