There are various reasons why a startup might fail - lack of vision, profitability, and no product-market fit, being a few. Experts say that competition is the fourth most common reason for the failure of a startup. Unfortunately, only a few companies survive this sea of competitors and come out as game-changers.
One such example of a company that brought a revolution in the audio devices space in India was boAt. Launched in 2016, boAt company successfully survived tough situations, evolved into the biggest lifestyle brand for Indian consumers, and is currently planning to launch an IPO with a valuation at $1.5 - 2 billion.
So in this article, we are going to explain exactly how boAt did it, and some lessons you can learn from the company.
First, a bit of history. Let’s travel back to 2016!
I still remember the first wired headphone I bought. It was an Audio Technica over-the-ear headphones, the most affordable one in the sub-1500 price range.
The headphone market in 2016 was heavily crowded. There was crazy competition in every segment and price range. For instance, Beats & Bose were leaders in the premium segment, while Sennheiser & Sony were known for their high audio quality across price ranges. There was no chance a new player could compete with these brands!
But there was still an important narrative most of these brands were missing. For the young generation, headphones weren’t just supposed to be about quality audio or amazing comfort.
Rather headphones were supposed to be a fashion accessory -- something they could flaunt & something that could make a statement for them!
Aman Gupta, the founder of boAt company caught on to this problem and partnered with co-founder Sameer Mehta.
See, the upside of entering a crowded market is that there's a high chance that some companies will already have a solution for the problem you want to solve. Beats was a great validation for “headphones as a fashion accessory”, but they were priced insanely. So Aman & Sameer also had to make this more affordable.
boAt - Company Highlights
Startup Name | boAt Lifestyle |
Headquarters | New Delhi, India |
Sector | Consumer Electronics |
Founders | Sameer Mehta, Aman Gupta |
Founded | 2016 |
Total Funding Raised | $177 million (October 2022) |
Revenue | $362.6 million (INR 3,000 crore, FY22) |
Valuation | $266.8 million (INR 2,200 crore, April 2021) |
Website | boat-lifestyle.com |
boAt company origin
In his early days, Aman Gupta worked in the product management division of JBL, where he had to understand the Indian market and supply the right products to electronic retailers like Croma. There he found out that Indians were looking at audio devices as a fashion accessory rather than a utility, and that even though the market was crowded with big players, people were willing to try new brands. So in 2014, he joined Sameer Mehta to create a lifestyle brand for the millennials.
But they didn’t create an audio product right away! First, they wanted to solve a problem that the average consumer had, and by solving that, build trust among the millennials.
Remember when authentic iPhone charger cables used to break near the ends after a few months? Yes, they started with that. After investing the first 2 years in research and product exploration they decided that selling sturdy cables for iPhone chargers was the right move. This was an instant hit as most people were still using the easily breakable charger cables that came with the boxes. Shortly, they launched a bass-heavy audio product for the simple reason that Indians like that punchy sound.
Since they kept the prices between the mid-range and premium segments, they like to call themselves the “Zara of electronics”.
They started up with the 3 million from their own pockets and recorded a revenue of 25Cr in the first year. They recorded a whopping 2873 crore in revenue in 2022 and bagged a $60-million funding from Warburg and Malabar Investments. The numbers look pretty solid to us considering they are planning to launch an IPO pretty soon.
boAt company revenue and growth
1. Revenue growth y-o-y
Let’s look at the revenue numbers for each year. Brace yourselves!
2017 - 27 crore
2018 - 108 crore
2019 - 239.4 crore
2020 - 704 crore
2021 - 1314 crore
2022 - 2873 crore
2. It's a profit powerhouse!
Starting with just iPhone charger cables, boAt quickly shifted to selling audio devices and wearables when they sold nearly 10,000 pieces of wearables in just a minute on Flipkart.
In 2021, boAt was already selling 15000 units per day, up from 6000 units in 2018 and 2019. The profits also rose from 9Cr in 2019, to 48.5Cr in 2020. Recently they posted a 78.6Cr profit in 2021, a 61% increase!
3. Higher revenue, higher profits, and higher AOV
What we found more interesting was that the average order value (AOV) also increased as follows:
2019 - Rs.493
2020 - Rs.1093
2021 - Rs.1280
This steady incremental increase in the AOV proves that people continued to buy from the company even if the prices tend to increase YOY, and due to the varied category of products introduced into the market.
I didn’t believe this when I first saw these numbers. But then I looked around my house and found the following boAt products I bought from 2018 till today:
Wired earphones - Rs.300
Wireless Bluetooth earphones - Rs.800
Gaming over-the-ear headset - Rs.1300
TWS Airdopes - Rs.2000
Stone speaker - Rs.3100
See how the order values have increased each time I got a new product? This is only possible if a company has managed to earn the customer’s trust.
boAt in the major leagues!
Would you believe it if I said they've become the 5th largest wearables company in the world, and the first in India in just 5 years after launch? Well, achieving this in a short span was no easy feat, but they did it!
By selling only on e-commerce platforms during the initial days, the company is now present in 5,000+ retail stores across India, serving more than 20 million Indians till now.
Key takeaways from boAt company's success story
Here are a few lessons that startups can learn from boAt's success.
1. Understood the Indian mindset
Since the beginning, the targeting was on point. They provided stylish and affordable audio devices to the millennials in India. They were also focused and consistent on their strategies to attract the youngsters in India. For example, they featured the biggest icons in Bollywood and cricket in their ads to give a fresh feel and a youthful outlook.
2. Started small at first, expanded later
Any other new company in that industry would’ve come up with yet another audio product. But these founders spent the first 2 years understanding the customer’s problems. They knew that people were still using the easily breakable original cables.
So they launched a tougher braided cable with a lifecycle of 10,000 bends. This “starting small” strategy made boAt a trustable brand, and when they launched their first audio product, people wanted to try it out. So I think this strategy of “starting small” is brilliant for any startup!
3. Focussed on building a community
The company always had a name for its customers right from the beginning– boAtheads. So when youngsters saw their favorite stars like Hardik Pandya, Diljit Singh, Neha Kakkar, and Shikar Dhawan being referred to by that name, they immediately wanted to become a boAthead.
4. Aggressive marketing from the start
Since millennials spent most of their time online, the company had primarily stuck with online advertising during the first three years and ran campaigns on social media platforms to raise brand awareness. They also used celebrities to inspire more millennials to make a fashion statement with their products.
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