Noise Amplifies Focus On True Wireless Sector To Boost Growth

By Arjun Yadav, Resham Suhail

In a tier-2 city like Bikaner in Rajasthan where the typical youth's trajectory veers towards professions like medicine, engineering or the civil services, cousins Amit and Gaurav Khatri chose to build a make-in-India consumer technology startup, they named 'Noise'. The founders of this technology wearables major of the day, were drawn to entrepreneurship for different reasons.

For Gaurav, the driving force was deprivation of smart technology. Back then, even tier-1 cities had to wait months for the latest technology to reach them. Then 21 and a commercial pilot, Gaurav found himself disillusioned with the turbulence in the aviation industry, and yearned for a more fulfilling pursuit. 

His older cousin Amit, at 32 was already well-versed in the ways of the world, jet-setting across countries for an export house that was delivering to global giants like Zara and H&M. He was exposed to the pulse of innovation. 

United by a shared vision of pioneering an Indian business grounded in tangible products, the Khatri cousins initiated a journey of entrepreneurial daring. In 2014, their brainchild, Noise, which started as a mobile accessories seller, soon pivoted to compete head-on with industry titans such as Apple, Samsung, Bose and others in the wearables space. 

Amit attributes the inspiration for the brand's name to the stressful days when both found their true calling and listened to their "inner noise". "It meant to cut the noise outside and listen to what you have inside. If you look at our consumers, they also relate to it," says Amit.

*Defying Odds

Unbranded Chinese players then dominated the tech wearables market in India. Establishing an Indian brand from scratch in a cluttered market was a daunting task. The thought of building a sustainable business with their own resources added to the stress. Recalling the challenges of the early days, Amit talks of some of the biggest questions that haunted the duo in their not-so-common bootstrapped journey. "How will you hire the team? You don't have the capital; how will you fight with the giants of the industry? How will you invest in technology," were some of the questions that the founders grappled with in the early days.

Noise defied conventions and stayed bootstrapped and profitable except for one of the ten years that it has been in existence. It soon emerged as one of the fastest-growing Indian startups in the consumer wearables space. With India witnessing a surge in mobile penetration and internet adoption, the stage was set for Noise's grand entrance. 

*Riding the Wearables Wave

The synergy between technology and fitness has never been more seamless than now. In India, the smartwatch market was booming in 2021, driven by a growing emphasis on health and wellness, particularly amplified by the pandemic. In this scenario, Noise emerged as a frontrunner in the smartwatch category, consistently taking the top spot among competitors, as affirmed by International Data Corporation (IDC) reports spanning consecutive quarters till the third quarter of 2023 (3Q23).

The tech wearables market in India, according to IDC, witnessed an impressive 34 per cent year-on-year growth through the 2023 calendar year. Noise commanded a significant 22 per cent market share in the smartwatch category. Noise crossed the Rs 2,000 crore revenue mark in FY2023. Looking ahead, Gaurav Khatri talks of his ambitious plans. "For the current fiscal year, we are poised to double down on our targets, aiming for 70 per cent growth," he says.

*Competition Heats Up

According to IDC Tracker, the last calendar year ended with the Indian wearable market recording a 34 per cent growth year-on-year. All three top players, boAt, Noise, and Fire-Boltt, secured their respective positions in the wearables market through diversified product portfolios. In the smartwatch category, however, Noise lost its leading position to Arnav Kishore-led Fire-Boltt.

Gaurav contends that most of the change in market share is owing to the growth in the sub-Rs 1000 price point. "We never fought at this price point. In the Rs 2000-5000 category, we hold north of 40 per cent market share. Our focus has always been on an aspirational price point rather than fighting at the bottom of the pyramid," he adds.

Market observers see technological innovation and premiumisation in the category that will continue to drive growth as consumers get more reasons to upgrade. But the Noise founders see the market consolidating now and smaller players exiting the market space. "The top three players have taken the spot with 60-70 per cent market share. A lot of unbranded and small players will start moving out because the commercials won't make sense," says Amit. Noise also intends to keep smartwatches and wearables as the mainstay of its product portfolio. "I don't think we will be diluting into multiple categories. There is enough juice in the market," says Amit.

*Priorities are Branding, R&D 

During the last financial year, the company's profit plummeted 39 times to Rs 88 lakh from Rs 35.5 crore in FY2022. Media reports attributed this drastic drop in profit margins to rising "expenses". Amit explains that the company doubled on research and development (R&D) and branding, which will help it premiumise its offerings and leverage back on these expenses.

The company established Noise Labs mid-last year to focus more on technological innovation. Noise claims that it goes beyond functionality, aiming to redefine customer expectations and evoke a sense of progress.

"In account books, they look like expenses, but these are the investments you do for the long haul," says Gaurav. The brand has so far kept its spending on marketing and branding close to zero or below one per cent of sales. Of late, the brand's star power has shot up multi-fold as it roped in cricketer Virat Kohli, Olympics star Neeraj Chopra and Bollywood actress Tapsee Pannu, among others.

The duo emphasised that investments need to go into innovation, marketing, advertising, and brand building to sustain the business in the long term. The company has recently also forayed into the smart ring category. "As a customer-centric brand, Noise realised and understood the need for disruption in the industry and launched Luna Ring. Noise is the first brand to introduce smartwatches for children, designed to take into account parents' concerns," say company sources. The company is also banking heavily on Bharat and anticipates "tremendous demand" coming from tier- 2, tier- 3 and tier-4 cities. The customer split, at present, across tier-1, tier-2 and tier-3 cities stands at 40:20:20.

*The Big Pivot to Audio

The one thing that brings a sense of excitement to the Noise founders is the focus on audio for their next growth path. In December 2023, Noise's bootstrapped journey took a turn when international audio giant Bose came in as a strategic investor in the series A funding round.

The True Wireless category grew over 40 per cent in the 2023 calendar year (CY2023), according to IDC. There were tailwinds in the category for Noise as its market share rose nearly 39 per cent over CY2022 and a whopping 109 per cent in the last quarter of 2023 over the same quarter in 2022.

"People are moving from traditional neckbands to truly wireless devices. This means a higher average sales price. There is a shift towards new technologies. The market is under-penetrated right now. So going forward, you would see Noise doubling down on audio," says Amit.

The company intends to enhance its audio portfolio through Bose's vast intellectual property (IP) bank in the space, its distribution network and amplify its R&D capabilities. 

As Noise marks ten years of operations and doubles down on audio, the Khatri duo stresses that innovation and technology would continue to make a meaningful difference in a user's life

Deviating from a trend among its competitors in the market, Noise founders have no plans to float an initial public offering (IPO) of shares in the near future. With their global strategic investor on board, Noise anticipates exponential growth and dreams of becoming not just a leader in the Indian wearables market but globally as well. Yes, Noise is poised to create a really loud din in the tech wearables market.