How boAt Achieved Massive Scale In A Saturated Market.
From Thomas Edison’s invention of the phonogram (the first recording technology) in 1877, to the development of the cassette, Sony’s Walkman and CD technology, the way we listened to music changed massively even before the introduction of the Internet. A microcosm of music’s evolution is the evolution of portable music systems and the development of earphones. In its infancy, like with most technology, headphone/earphone technology slotted into the premium category; and while tech advancements have meant headphones have become more affordable, no company has been able to infiltrate the low-budget sector of this market in India like ‘boAt’, thanks to its successful boat marketing strategy. By focusing on affordability and quality, boAt has been able to carve out a niche in the market and capture the attention of price-sensitive consumers, making its products accessible to a wider audience.
This boat marketing strategy has helped them build a loyal customer base and establish themselves as one of the top brands in the audio accessories market in India. By leveraging social media platforms and collaborating with popular influencers, boAt has been able to effectively promote its products and reach a wider audience. This boat marketing strategy has been instrumental in the company’s success, helping them stay ahead of the competition and maintain their position as a leader in the industry.
Before we get into the details, here’s a quick summary of how boAt began their journey and where they are today:
- Hailed as India’s no. 1 earwear audio brand; boAt began its journey as a cash strapped startup manufacturing and selling cables.
- The business was founded in 2016 by Sameer Mehta, the CPO, and Aman Gupta, the CMO, of boAt.
- As of 2020, boAt served 8,00,000 customers, managing to wiggle its way into a competitive market with big players such as Sony, JBL, Phillips, Harman, Bose etc. having already staked their claim.
- As of April 2021, boAt was valued at INR 2,200 Crore and recorded an annual revenue of INR 1,531 Crore in FY21.
- The brand commands a market share of a whopping 35.8%, with its competitors paling in comparison (Boult – 5.3%, Noise – 7.7% and Realme – 8.1%).
By implementing strategies for efficient supply chains and cost-cutting mechanisms, boAt has been able to pass on the benefits of cost to their customers. For example, while boAt’s budget earphones (bassheads) begin at INR 379, JBL’s cheapest wired earphones are priced at INR 599, and Senheisser’s at INR 1,990. Premium brands such as Bose do not even factor in the same bracket with a majority of their products being priced at INR 15,000 and above.
BoAt’s meteoric rise in the Indian market is owed to many clever business, brand and marketing-related strategies.
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Let’s talk about how boAt was able to achieve all of the above, and how you can use their strategies to build your own brand.
- Pinpoint Precision For Marketing: Through its lifecycle, the brand has purposefully stayed away from marketing its products through traditional forms of media (such as print, TV commercials, and hoardings) and has focused solely on social media and digital marketing techniques (such as search engine optimisation, paid ads etc.) to promote its products. boAt’s advertising promotion costs (or online marketing costs) are significant and form the second largest cost centre for the business, accounting for 10.3% of its annual expenses. These expenses jumped from INR 51 Crore in FY20 to a very telling INR 147 Crore in FY21! boAt is living proof that brands in India can persevere and succeed through a purely digital marketing approach!
- Picking The Pipeline For The Product: The internet brought a different outlook (or outlisten?) to how we listen to music and also revolutionised the way we buy music technology. That’s where “boAt” comes in. What makes boAt particularly unique is its pioneering sales and distribution strategy. The brand sells 8 out of 10 of its products online, and relies almost exclusively on sales through e-commerce intermediaries like Amazon and Flipkart. So while managing to save on expenditures such as sales staff and rent, boAt wiggles its way into the spotlight by having their products displayed and pushed on these monster e-commerce platforms with repeated festive sales offers and mammoth advertising budgets. This strategy also allowed boAt to scale during the pandemic, during a time when almost every business suffered. With Amazon and Flipkart functioning at almost full tilt, boAt was able to access its target market with continuity and relative ease.
The flipside is that boAt’s reliance on these platforms means they have all their eggs in one basket, and any change in their equation might result in a negative impact on the business.
- Communities Take the Centre Stage: boAt has always worked towards building a relationship with its customer, focusing on i) the consumer’s needs, ii) the consumer’s desires and iii) the consumer’s behaviour patterns. Furthermore, the brand has attempted to create a community of its purchasers by naming the group ‘boAtheads’ and thereby instilling a sense of ‘family’. This, like with so many successful brands over the years, has proved vital to boAt’s success. Communities affect the psychology of the consumer by i) creating a sense of belonging, ii) building the capacity and potential for repeat purchases, iii) establishing long-term relationships between buyer and seller, and iii) encouraging loyalty that often transcends pricing and features.
- Leaving Your Target Market Starstruck: Once the name gathered traction and its sales began their upward trajectory, boAt began a marketing campaign to target the aspirations of their target market i.e., the youth. Youth icons such as Hardik Pandya, Jaspreet Bumrah, Shikhar Dhawan, Rishabh Pant, Neha Kakkar, Kiara Alia Advani, Kartik Aryan, Shreya Iyer and Diljit Dosanjh were roped in to leverage aspirational value. Additionally, boAt decided to collaborate with brands like Masaba Gupta (Designer) to release a limited edition series of designed earphones for the Lakme Fashion Week 2020, and Bira (a homegrown beer brand) to establish itself as a ‘lifestyle’ brand. By all accounts, the endeavours have been a success.
A combination of these strategies ensured that boAt was able to boost its ‘Perceived Value’ (how the product/brand is perceived) which is vital for a product such as earphones where the differences in ‘Tangible Value’ (the actual specs and features of the product/brand) is difficult or almost impossible for a layperson to understand.
- Constant Evolution: The brand focuses on innovation and devising solutions like the indestructible charger cable for Apple products, setting them apart from their boat competitors. This sought to address the issue of damaged and fraying apple chargers that was a complaint of Apple users across the board. boAt also has a constantly growing product catalogue with the brand adding new earphones, headphones, portable speakers, cables and several other music accessories on a monthly or bi-monthly basis, keeping them ahead of their boat competitors. boAt is now entering the smart watch segment, where it seems it will once again succeed and create new competition for boat competitors. By continuously expanding their product offerings and exploring new markets, boAt has established itself as a brand that is always evolving and adapting to meet the changing needs of consumers. This forward-thinking approach has helped them stay ahead of their boat competitors and maintain their position as one of the top brands in the audio accessories market.
- Modelled To Be Light On Your Pocket: Before the advent of boAt, boat competitors would have perceived that the earphone/headphone market was already close to saturation with marquee international brands like Bose, Sony, Harman, Seinheiser, Phillips and so many more already making successful entries into India. boAt, however, stamped its authority on the segment by devoting itself to low budget, high quality options, with their products coming in at INR 1,000 to INR 5,000 range, and even the sub INR 1,000 range. This strategy opened up the market to the youth and a large section of the Indian population that were otherwise forced to rely on brandless knock offs from India and abroad, providing tough competition for other boat competitors. By carving out a niche in the market and offering affordable yet high-quality products, boAt competitors had to adapt and innovate to keep up with the changing market dynamics. Despite facing fierce competition, boAt’s focus on affordability and quality has helped them establish a strong foothold in the Indian market, making them a force to be reckoned with in the industry.
How you can take an oar from boAt’s boat to grow your own brand.
From a reading of the above, it’s evident that there are certain clear-cut strategies that you can employ to boost your brand and pave the way for success:
- It is crucial for you to build a researched strategy by identifying the target market and the corresponding pricing.
- Creating communities that subscribe to your brand and its products/services facilitate buyer-seller relationships, brand loyalty and repeat purchases.
- Once this has been put in place, it is most important to structure an advertising and marketing approach that will maximise your business’s/brand’s/product’s reach without exceeding your allocated budget. As can be observed from boAt’s model, employing a purely digital marketing approach can do wonders for your brand without you having to break the bank.
- Associations or collaborations with celebrities and social media influencers (through influencer marketing) allow you to capture the attention of your target market and create psychological connections between your brand, the influencer/celebrity and the customer’s need. Influencer marketing can be implemented by identifying the influencer with the audience that is most likely to be interested in your product, which is especially important for boat competitors. For example, founders of startups are likely to follow Rahul Mathur, while individuals interested in finance will follow ‘Finance with Sharan With Sharan’. By targeting the right influencers, boat competitors can effectively promote their products and differentiate themselves from other brands in the market. However, not all of us are business strategy experts.
The footnote to a successful voyage.
All of the above paints a wonderfully rosy picture of boAt, its products and its strategy across the board. While the boAt revolution has certainly evolved the market and can be deemed a success on the whole, everything may not be as it seems at the music technology powerhouse.
- boAt sources all their products from external manufacturers, with 89% of their products coming from China. As we’re all aware India’s relationship with China is tenuous, and global tensions don’t make these situations any better. Irrespective of this, it’s never a great idea to depend so heavily on another country for your manufacturing, and boAt is trying to redress this issue by working with manufacturers from India and Vietnam.
- boAt is aiming to launch its Initial Public Offering (IPO) around April-May 2022 and is seeking a valuation of a whopping USD 2 Billion. As recently as January 2021, they raised USD 100 Million from PE firm Warburg Pincus at a valuation of USD 300 Million, which begs the question: Have they really done enough to justify such a major jump in only one year? Moreover, boAt will be following in the footsteps of companies like Nykaa and Zomato who haven’t really performed since their introduction to the stock market.