Noise Would Double Down On Audio: Amit Khatri & Gaurav Khatri

How will Bose’s strategic investment impact Noise growth plans? Why did you not choose a VC or a PE?
AK: We were very clear that the money is important for the business, but the colour of the money was more important. We needed a partner who could help us to move up. Bose is the pioneer in this space. We realised that this partnership would enable Indian consumers to experience audio better with their R&D expertise. We believe this will differentiate Noise from other peers in the long run. Bose also sees India as one of the biggest emerging markets, which makes sense for them to invest in Noise.

GK: Bose also brings decades of understanding about the consumer. We know how to make the business profitable and have proved it, but we needed broader exposure and knowledge of customers from different territories of the world. With a massive bank of IPs in the audio space, we get access to their entire ecosystem, which is a big opportunity for us.

In FY23, Noise recorded a sharp decline of 39.4 times in net profit. What are the factors leading to this surge in expenditure?
AK: To stay ahead in the market, we need to evolve continuously. So, we are investing heavily in R&D, and that is why the bottom line took a hit. But in the coming years, this will help Noise to premiumise and leverage back these expenses.

GK: As the brand grows, its marketing and branding must also increase. In account books, they are expenses, but for us, they are investments for the long haul. We reached where we are very quickly, but if we want to sustain, we would need a strong arsenal, be it branding, R&D or tech.

Can you share a breakup of your products driving the revenue? Do we expect a change in strategy with Bose coming in?  
AK: Largely, it has been dominated by smartwatches and truly wireless is a smaller segment of us. It is 80 per cent wearables and 20 per cent hearables. Both markets are under-penetrated right now. These are devices that people keep changing because of technological evolution. Going forward, Noise would be doubling down on audio also. As a brand, we will not be diluting into multiple categories. Enough market is sitting at the centre where we would want to pivot.

GK: We were among the fastest-growing brands in the true wireless segment last year. With Bose coming in and the technology coming up, the brand traction for true wireless will be phenomenal.

Affordability has always been a hook for the mass category in India. How would you balance your product range to meet aspirations for both affordable and premium products?
GK: Our focus has been to keep our brand aspirational, giving our consumers the right experience and product quality. We have over 40 per cent of the market share in the above entry-level price point. So, this segment has been a core focus, but India being a value-conscious market, you will always get maximum sales from the entry price segment, and that market can't be left empty.

AK: It is about catering for the customer sitting at the curve's centre. This customer can buy a luxury brand but still want the one offering more value. For this audience, it is not just a product; they leave a cheaper product in this category and buy us. They talk about design, quality and the experience at all touch points.

Tell us about your initiatives for 100 per cent Make-in-India production at Noise.
AK: Manufacturing is a big focus area for the nation. Prime Minister Narendra Modi is pivoting very high towards an Atmanirbhar Bharat. We started the Make in India initiative 16 months back. Our manufacturing facility is in Noida and close to 5000 people are directly or indirectly employed there. We produce nearly a million units there, and 95 per cent of Noise products are now being made in India. We are working on a lot of component localisation, which would generate more employment in India.

As you mark ten years, where do you see Noise in 2034? Could you outline your roadmap?
AK: That would be a far-fetched vision given our universe. We both believe we should make technology which could make a meaningful difference in the user's life. Ten years down the line, we intend to solve bigger human problems and give back to society rather than just dumping the products in the market. There is hardly any brand in the electronics space from India which has gone global, so that will be a milestone both of us would seek.

GK: We want to be the brand that is still connected to the lifestyle of a young consumer and get involved with whatever new technologies come in.