Considered India’s leading smart wearables brand, Noise is bullish about FY25. Bolstered by both organic initiatives and potential inorganic opportunities, it is looking at expanding its offerings to include more offline experiences and is looking at smaller cities including tier-2, 3, and 4 to drive its next level of growth.
In an interview with Storyboard18, Noise co-founder Gaurav Khatri talks about achieving complete localisation of manufacturing in India and discusses how domestic brands have a significant advantage in capturing a larger consumer share by understanding local needs and preferences deeply, in the smart wearable category.
Further, he said that securing funds has not been a challenge for Noise due to its sound financials, market leadership, and strong foundation. However, it is always about finding the right partners who can add value to its boardroom and act as catalysts for our growth.
Edited excerpts:
Last year, Noise raised $10 million from US-based audio equipment major Bose Corporation in a deal that values the company at around $420 million. As you continue to expand, would you look at more funding or such strategic partnerships this year?
The strategic investment marked Noise’s first-ever funding as a part of the Series A round – a significant milestone for Noise as one of India’s leading smart wearables brands and the industry. The right partnership at the right time is crucial for growth. It fuels Noise’s R&D efforts, opening a window to future-forward emerging global technology, global accessibility, and avenues for market expansion. With Bose as our first-ever investor, we find synergy in our shared vision to revolutionise the global wearables landscape combined with our deep understanding of the Indian market and Bose’s tech expertise.
As part of our Series A fundraise, we are focused on concluding this phase before moving on to the next milestones.
Securing funds has not been a challenge for Noise due to our sound financials, market leadership, and strong foundation. However, for us, it is always about finding the right partners who can add value to our boardroom and act as catalysts for our growth. This approach ensures that any future funding aligns with our strategic goals and helps us continue to innovate and expand our product offerings.
How profitable is the company today?
Noise has written the playbook for a profitable bootstrapped business for nearly a decade and has been an undisputed leader in smartwatches nationally and globally. Even as the smartwatch industry experiences a slowdown, we have continued to register growth and are considered as the third-largest wearable brand globally. With Bose onboard as an investor, it has energised our R&D pursuits. While profitability is indeed a challenge for many start-ups, particularly in the wearable technology segment, our focus on innovation, and operational efficiency has allowed us to achieve sustainable growth.
Given we have been a profitable bootstrapped business for nearly a decade, Noise is a leading brand with a 13.8% market share and have maintained our leadership for years through strategic initiatives.
How are you looking at organic or inorganic growth this year?
Noise has established a robust presence with close to 20,000 retail touchpoints across India with 50+ product models nationwide, ensuring our products are widely accessible to consumers. Given our online and offline split is 80:20, in the next few years we plan to significantly expand our offline footprint by partnering with more retail chains and consumer electronics stores. Our customers are split across Tier 1, 2, and 3 cities in a ratio of 40:40:20. The expansion aims to balance the online and offline revenue mix more evenly, thereby improving visibility and accessibility.
As we step into FY25, we plan to further this growth trajectory enhancing Make in India initiatives and bolster domestic production, leveraging our facility established in partnership with Il Jin Electronics.
Domestic brands have a significant advantage in capturing a larger consumer share by understanding local needs and preferences deeply. Noise is committed to strengthening manufacturing efforts domestically, ensuring quality and efficiency while promoting a community-centric approach through our in-house NoiseFit App, shaping personalized user experiences for over 1.2 million daily active users.
Take us through your marketing strategy.
Our marketing strategy encompasses a mix of digital and traditional channels, including social media advertising, influencer partnerships, and more. Utilising brand ambassadors to convey our message has significantly enhanced our connection with the audience. While performance marketing continues to be a top priority, we are also expanding into new channels like affiliate marketing and quick commerce, with encouraging outcomes. While digital channels offer scalability and precise targeting, traditional channels such as print and outdoor advertising help us reach a broader audience.
The company has products across earphones, smartwatches, and smart rings- how does each contribute to your overall sales and revenue?
Smartwatches continue to remain our key business driver bolstered by our strong position, penetration among early adopters, repeat buyers and pace of innovation. We have also rapidly grown in the TWS category, becoming one of the fastest-growing brands in this space. Both smartwatches and audio devices are central to our innovation strategy, contributing 80% and 20% of our revenue, respectively.
When it comes to the smart rings, the category is still at a very nascent stage of adoption with more awareness and education required on the potential and unique use cases. The Luna ring is an important part of our business and we are seeing encouraging traction and response. All the categories will continue to co-exist catering to the different consumers and addressing diverse needs.
What remains your strategy to continue to appeal to entry-level buyers?
We believe in democratising technology by providing accessible and value-driven products to everyone. Entry-level buyers are generally first-time buyers or early adopters. Our strategy centers on providing consumers with exceptional value at entry-level price points through impressive designs coupled with essential health-tracking features such as step counting, seamless connectivity, customisable watch faces, making our products appealing to entry-level buyers. The entry-level segment contributes significantly to our overall sales volume, reflecting the broad appeal of our offerings.