Business Case Study - Noise: A 4000+ Crore Wearable Brand
Business Case Study - Noise: A 4000+ Crore Wearable Brand
Business Case Study - The Rise of Noise: A 4000 Crore Wearable Brand
The beginning of 2023 marked the rise of the Indian company Noise, which soon became the world’s third-largest manufacturer of smartwatches. Although it was behind Apple and Samsung, impressively, it was started only 7 years ago, against the decade-old companies. What's even more impressive? It was a completely self-reliant company back then. Today, noise is the market leader in India, building future technology products from India for the world. In this article, we will talk about the journey of two brothers from the small town of Bikaner in Rajasthan to become owners of one of the biggest conglomerates in the world.
Origin of Noise
Noise, known today for its smart wearables, was started as a phone cover company. It was founded by Amit and Gaurav Khatri in 2014. Gaurav, who loved tech from a young age, got his first iPhone in 2007 when Apple launched it. He asked his cousin Amit, who was working in Hong Kong, to bring it for him. Gaurav was excited about his new smartphone and wanted a cover for it. When he couldn't find one in India, Amit got it for him from Hong Kong. This gave Gaurav the idea of starting to sell phone covers in India.
At 17, starting a business wasn't practical for Gaurav, but his interest in gadgets stayed strong. By his 20s, he was a business major and was ready to pursue his passion. In 2014, during India's smartphone boom with new companies like Lava and a growing interest in stylish phone covers, Amit got him 50 covers for Xiaomi phones. They sold out in just 15 minutes on an e-commerce website. This success led to the birth of Noise 1.0 in 2014.
Pivot to Smart Devices
Recognizing the growing trend towards smart devices, Noise changed its business strategy. Inspired by Apple's introduction of smartwatches and wireless AirPods in 2015 and 2016, which sold millions, Noise saw an opportunity. In India, the market for smartwatches was just starting, with sales growing significantly between 2014 and 2015.
In 2016, Noise entered the smart wearables market, launching smartwatches and wireless earphones. This move was timely, aligning with the increasing interest in health and fitness tracking. Brands like Xiaomi and GoQi were growing, but their quality products were expensive, and their affordable options were limited in utility.
Noise aimed to offer affordable and functional smart devices. They collaborated with tech partners in Taiwan and China to manufacture, import raw materials, and assemble products in India. Their first smartwatch, the U8, had poor ratings on Amazon and faced issues like “not turning on”. The manufacturing wasn't directly by Noise but by their partners in Taiwan and China.
Despite early setbacks, Noise improved its products based on customer feedback. In 2018, they launched the popular ColorFit and ColorFit Pro smartwatches, known for their features and affordability. Their revenue grew from 24 crore rupees in 2018 to 49 crores in FY19 and 156 crores in FY20.
Growth During the COVID-19 Pandemic
The COVID-19 pandemic marked a turning point for Noise. With more people working from home and focusing on health, the demand for smartwatches increased. People wanted to track their calories and blood pressure, making smartwatches essential. In India, smartwatch sales jumped to 26.6 lakh in 2020 and 1.2 crores in 2021.
Noise capitalised on this trend and saw substantial growth. By 2020, Noise sold four products every minute, capturing a 27% market share and becoming the market leader. Their focus on affordable, feature-rich products resonated well in India.
In 2020, Noise reported significant revenue increases, and by 2022, it became the third largest smartwatch brand, behind only Apple and Samsung. Revenues grew from 370 crores to 800 crores. Statistics highlight this growth, by mid-2020, Noise had captured a large share of the Indian wearable market, competing closely with global giants like Apple and Samsung. According to Counterpoint Research, Noise was among India's top three smartwatch brands during this period.
Challenges for Noise
Despite its success, Noise has faced several challenges,
The wearable technology market is highly competitive, with constant pressure to innovate and stay ahead of rivals. When they first started, they were one of the few smartwatch makers in the country, but now, more than 80 companies have come up with companies like Boat and FireBolt.
For example, Boat had only a 2.8% market share in 2020, which increased to 25% by the end of 2021, primarily because of its aggressive marketing skills.
Noise was solely dependent on smartwatches, with more than 80% of revenue coming from smartwatches, which became an existential crisis with the emergence of more and more smartwatch companies.
Complaints regarding quality and after-sale services further served the blow.
Additionally, supply chain disruptions posed significant challenges, particularly during the pandemic. Ensuring consistent quality and timely delivery of products has been a critical hurdle for Noise.
Another major challenge is maintaining affordability while incorporating advanced features. Consumers expect high functionality at lower prices, a balance that is difficult to achieve. Moreover, the rapid pace of technological advancements requires continuous research and development, adding to operational costs.