On January 22, 2022, Imagine Marketing Ltd (boAt), an Indian lifestyle brand that made fashionable wearable products, announced it was going in for an IPO in April or May 2022. With the proposed IPO, boAt was set to become the first D2C start-up in India to come up with an IPO. The company planned to raise ₹2,000 crore through the IPO.
Earlier, in the first week of January 2021, Warburg Pincus, a US-based private equity firm, had invested ₹731 crore in boAt. The company planned to invest the amount on improving its manufacturing capacity in India and venturing into the global market.
According to International Data Corporation (IDC), globally, in the wearables market, boAt occupied the fifth place by volume of shipments and market share in Q1 2022. The first four places were held by Apple, Samsung, Xiaomi, and Huawei respectively.
However, in the Indian wearables market, boAT had a leadership position. Even though boAt had made it to the top five in the wearables segment globally and was a market leader in India, it was facing increased competition from global brands.
Analysts opined that, in the future, the company would have to focus on its marketing strategy and bring forth innovative products that appeal to the millennials. They added that the market penetration of its products in the rural segment of India was another focus area.
About boAT
boAt is a New Delhi-based company founded by Sameer Mehta and Aman Gupta in 2016. The company was bootstrapped entirely with a funding of ₹30 lakh from its founders. In the initial stages, it was a struggle for the founders to raise funds and manufacture products that were affordable as well as fashionable.
In due course, boAt received funding from various investors such as Qualcomm Ventures, Warburg Pincus, InnoVen Capital, Navi Technologies, and Fireside Ventures.
The launch of affordable fashionable audio products gave a boost to boAt’s popularity and its revenues increased by more than three times to ₹113 crore in FY 2018, up from ₹31 crore in FY 2017. The company’s revenue in FY 2019 was ₹237 crore and in FY 2020 it touched ₹701 crore. In FY 2021, the company posted a revenue of ₹1,531 crore.
Initially, boAt sold its products through e-commerce websites such as Amazon, and Flipkart. Later on, it expanded its e-commerce presence to include Croma, Myntra, and Jabong. As of November 2021, the company sells its products through 5,000 retail stores and 20 distributors and has served two crore customers in India.
Marketing strategy
boAT identified a gap in the market, came up with innovations, focused on quality, positioned the product well, and paid increased attention to customer requirements. It also went in for celebrity endorsements and online marketing.
White space
The company found that one of the problems people frequently faced was the snapping of mobile charging cables. So, this was the first problem that it solved with the introduction of indestructible cables. The company sensed the need of the customers and immediately developed a product that would serve and satisfy them.
Similarly, the need for tangle-free cables for wired earphones led to the introduction of braided wire longer cables. As customers were bored with plastic earphones, the company introduced metal-based earphones
Innovation rationale
The company consistently worked on developing new products and introducing them in the market to keep ahead of the competition. It found that Indians loved bass in their music and launched earphones called BassHeads. In 2018, it then launched speakers, and home audio systems and soundbars the very next year.
Focus on quality
In the market, premium quality earphones were costly and unaffordable to the millennials. So, the company launched products that were not only durable but were also priced reasonably. Its affordable yet good-quality products enabled the company to compete effectively with competitors such as Sony, JBL, Samsung, and Sennheiser. The affordable prices offered by boAt even led to JBL cutting down on the prices of some of its products.
Product positioning
boAt portrayed its products as lifestyle products that were a part of everyday fashion and not as electronic accessories. The products were mainly targeted at millennials who loved trendy, affordable, and quality products with a premium look.
Attuned to customer needs
boAt’s marketing strategy was to pay increased attention to the requirements of the customer and create a relationship with them. The company named its loyal customers ‘boAtheads’ and had a dedicated community for them. The request for changes in any product and the introduction of new products was done by taking any criticism from these loyal boAthead communities positively. These customer-focused initiatives helped the company’s customer base increase to 20 lakh by 2020 from 8 lakh in 2018.
Celebrity endorsements
Most of the brand ambassadors of boAt were either from Bollywood or cricketers as these were the most popular pastimes of millennials — boAt’s target segment. The brand ambassadors of the company were actors such as Kiara Advani, Karthik Aryan, and Jacqueline Fernandez, while from the cricketing field, it was KL Rahul, Shikhar Dhawan, and Hardik Pandya.
Some famous music personalities such as Diljeet Dosanjh and Neha Kakkar have also been brand ambassadors. Celebrity endorsements helped the company overcome the challenge of creating brand awareness in tier-2cities.
Digital marketing
As most millennials were active on social media and spent most of their time online, boAt adopted the online mode to run its marketing campaigns . With a minimal presence on television and print media, the company preferred social media campaigns on platforms such as Facebook and others.
Millennial mindset
boAt sold electronic products as fashion accessories and that caught the attention of the millennials. The company also partnered with fashion designers to launch products that catered to the younger generation. Product durability was one of the main reasons for boAt’s success and that combined with the right pricing, helped the company clinch its share in a market dominated by foreign brands.
In June 2019, boAt partnered with singer Neha Kakkar to promote its range of audio products. As the company’s audio products were linked to music, this was the right move.
Road ahead
The major part of boAt’s business was online and comprised 60 to 70 per cent of its total sales. Most of the offline sales of boAt were from the top ten to 20 cities and the company was keen to focus on the smaller towns and rural markets. The company planned to reach more offline customers through partnerships with retail players such as Croma and Vijay Sales.
The company also had plans to venture into the overseas market and diversify its portfolio to include products that were gaming-based such as keyboards, mouses, and headphones. With the tendency to purchase earphones along with smartphones showing an upward trend, most smartphone companies had tied up with audio companies for combined deals on smartphones and earphones.
Apple had tied up with Beats, and Samsung with Harman and JBL. boAt was also on the lookout for a partnership with smartphone manufacturers to promote the sales of its audio devices. In the future, it aims to provide Indian customers with audio products with the latest technology so that they would not have to depend on foreign products.
The task
Imagine you’ve been tasked with the responsibility of planning the future of the company and chalk out a growth strategy by answering these questions:
- What can boAT do to ensure that it retains its millennial customer base?
- Formulate a expansion strategy for boAt to tap into towns and rural areas in India.
- Create an international market expansion strategy for the company.