How Boat aims to be Rs 500 crore company by FY21
Boat Lifestyle aims to be a Rs 500 crore company by FY21. A strong push towards offline sales and a plan to enter newer categories, the electronics company hopes, will help drive its growth. Aman Gupta talks to Devika Singh about the challenges in the offline space, the competition from smartphone players, and increasing its appeal beyond the millennials.
Many internet-first brands are looking at offline to boost the growth of their online channels. Is that your strategy too?
No, we are looking at offline seriously. Offline will soon contribute Rs 100 crore to our revenue. We earned Rs 300 crore in revenue in FY19, and the plan is to take this to Rs 500 crore by FY21. Initially, we were apprehensive about offline as it’s a long-tail channel, credit periods are longer and products are returned if not sold. However, several distributors approached us to keep our stock as there was consumer demand after seeing our products online. This made us realise the potential offline channel holds for us.
We are now present in 5,000 modern and general trade stores. Earlier, we were only present in Tata Croma outlets, but now you can find us in multi-brand outlets across India. Going ahead, we plan to add 3,000 more retail touchpoints. We have hired a dedicated offline team and are investing in distribution, retailer development, marketing, etc. We are also launching differentiated products for offline. For instance, our Bluetooth speaker Boat Stone 1000 comes packed with more features such as a slot for memory card, FM radio, etc.
What are the challenges that come with online as well offline operations?
The online-offline price war was a big challenge for us earlier, but now the government has come in to regulate it, and that has helped us. Fake products is another challenge. Initially, when we found fake products, we were happy that our brand had reached a point where people were creating fakes. But now it is becoming a problem as customers are getting confused. At times, people send us products for repairs and we find out they are fake products. We have put stickers on our products and have initiated legal proceedings against companies like Club Factory, which are selling them.
Smartphone players with a robust offline presence are foraying into accessories, too. Does that throw a spanner in the works for you?
Chinese smartphone players were present in the market when we entered, but we don’t compete on price at all; that’s our strategy. If we start fighting on price, we will die, because these players have a higher purchasing power. So, we fight on quality and aspiration. Boat is an aspirational product, and our products are placed in the mid-premium to premium category.
We sell 8000-10,000 units a day and this shows the trust people have in us. Competition keeps us on our toes, but we have also moved ahead of our competitors and grown bigger than them.
Any plans to enter newer categories or partner with smartphone companies?
We are looking at the three Cs for business expansion — category, customers and countries. We are mostly present in the personal audio segment, and plan to enter home audio, smart audio and wearables going ahead. We may launch wearables by the second or third quarter of FY20.
Currently, our target group is consumers in the 18-24 bracket, but we plan to expand this to 18-35, going ahead. We will enter the international market after we get our basics right in India. We don’t plan to tie up with any smartphone manufacturer as that would make us a sub-brand of the company. The perception is that if you buy a smartphone, you get a headset free and this destroys the brand value.
What’s your strategy to tap millennial consumers?
We have divided millennials into followers of subcultures — cricket, Bollywood and music — and are roping in influencers from these spaces to engage with them. In the music category, we have Neha Kakkar and Guru Randhawa; in Bollywood, Kartik Aryan; and in cricket, names such as Hardik Pandya, KL Rahul, Shikhar Dhawan, Jasprit Bumrah, etc. We don’t believe in old school marketing. Around 90% of our marketing budget goes to digital, but we have also been tapping print a bit as we focus on offline.