By the end of 2017, cousins Gaurav and Amit Khatri were at a crossroads in their pursuit of entrepreneurial glory. Noise, a venture they started in 2014 primarily selling mobile covers and accessories, was doing well as a business, but something was amiss. (Image above of Gaurav and Amit Khatri, co-founders of smartwatch brand Noise)
“It was doing well as a business in terms of sales and profitability but we soon realised that we didn’t have a brand. During the same time, we also witnessed a sudden shift in the mobile accessories market where the average selling price (ASP) of mobile covers and accessories was dropping at an alarming pace. The unorganised market saw several local and small players and the product category was tagged as a commodity rather than a lifestyle need,” says Amit Khatri, co-founder of Noise, in a conversation with The Better India.
By the end of 2017, they made the ultimate pivot that would revolutionise Noise. Being in the mobile accessories business made them aware that wireless audible products, smartwatches and products associated with the smartphone-connected ecosystem were selling like hotcakes.
There was a lot of interest in the Indian market but the quality offerings were global and required deep pockets. “No player was speaking to the pulse of the young Indian consumer. We were starting from scratch in terms of operations, but our learnings were experience-driven. We also decided to keep in mind our consumer’s aspirations and decided to build products that were mass aspirational with the right quality and pricing. This enabled us to build an ecosystem of different products that catered to the various needs of our consumers,” recalls Amit.
Closing the FY (Fiscal Year) 21 (2020-21) with annual revenue of Rs 373 crore, Noise leads the wearables (a category of electronic devices that can be worn as accessories) segment in India with a market share of 27% led by their smartwatches, according to this February 2022 report by the International Data Corporation (IDC). Meanwhile, according to Counterpoint Research, Noise ranks among the top 9 smartwatch brands globally and stands third in the APAC (Asia-Pacific) region in terms of shipment. This is the story of how they built this brand.
‘Not from a business family’
Neither cousin came from a business family, but always shared a strong desire of starting something on their own. “I had a humble upbringing and spent most of my childhood in the busy streets of Bikaner, Rajasthan, where both Gaurav and I did our schooling. After graduating high school, I decided to pursue my passion for design and join the National Institute of Fashion Technology (NIFT), Hyderabad. When Gaurav finished school, he joined training to become a commercial pilot, and then went on to pursue business studies,” recalls Amit.
What they did inherit from their families were values that would keep them in good stead. “Even if my family had the easy answer to a situation I was facing, they encouraged me to figure it out and never give up. Resilience is the key to success for any aspiring entrepreneur. They also taught me to be curious and open to learning. New ideas and innovation are always around you. It is your curiosity and your eagerness to learn that will make you look for them. And last but not the least, they taught me to respect people for who they are,” he explains.
Having graduated from NIFT, Amit spent the early years of his career with Orient Craft Limited, a leading garment design house. He started as a merchandiser and gradually rose to managing the supply chain for accessories from countries in the Far East.
His expertise in the retail and supply chain industry led him to start Transcend Sourcing Ltd — a design product house in Hong Kong. The company became a leading supply chain partner for global brands such as H&M, Next, Calvin Klein, Gap, M&S, C&A, ONLY, Vero Moda, and many more. Gaurav, on the other hand, was a commercial pilot.
“Both of us wanted to start a business venture, build something that was consumer-centric and lead from the front. We felt there would be synergy in starting a business together and invested our savings to start Noise back in 2014,” he recalls.
Bootstrapped & profitable
In the mobile accessories avatar back in 2017, Noise clocked about Rs 24 crores in sales. They were bootstrapped and profitable. Post their pivot to smartwatches, they grew at a rapid pace.
“Our marketing approach was frugal. We focused on performance marketing and aligned our strategies to ensure every dollar we spent on marketing was aligned with our business metric and garnered tangible results. From Rs 42 crores in FY19, the revenue from operations jumped to Rs 156 crore in FY20 and closed FY21 at Rs 373 crores,” claims Amit.
One of their key landmark achievements was taking the lead in market share in the smartwatch segment in 2020 within 3 years of their pivot, and then maintaining it for more than seven quarters, according to the IDC Report. In the truly wireless stereo (TWS) segment, taking the second spot in the India market during Q4 [Oct-Dec’21] and being recognised as the fastest growing brand in that quarter by IDC was a notable achievement for the brand.
“One of our path-breaking smartwatch models was the NoiseFit Ultra. From the TruView display to the aircraft-grade aluminium body, everything about the product screamed premium. The fabulous market performance of the variant led us to create its successors Ultra 2 and now Ultra Buzz. Another record-breaking smartwatch would be the Noise ColorFit Pulse. This watch was special for the price point at which it opened, which was significantly lower for the feature set it offered. It soon became our largest selling variant,” claims Amit.
On the question of sourcing components for their smartwatches from India, Amit admits to stiff challenges. “We have a high intent to manufacture in India but are limited due to certain hurdles in terms of the availability of chipsets and SOCs [system-on-chip]. Since we’re involved end-to-end in the designing and manufacturing cycle of our products, we’re spread across geographies to enable this. Today, we have several strategic partnerships including a team in Germany and are dealing with factories and manufacturing units in Vietnam. While we are assembling in India, we are working towards increasing our production here,” explains Amit.
To enable this, Noise is looking for more manufacturing (OEM) partners in the country to expand our production in India. However, for this, the ecosystem for accessory manufacturing in India needs to evolve and be at par with global standards and practices, adds Amit.
As a growing D2C company, they have been approached by credible investors. However, as of today, they have never felt the need for external support but are also not averse to the idea.
Whenever the company decides to take that plunge, it will join hands with partners who are aligned with their vision and “can be true collaborators in our journey of making Noise a globally connected lifestyle brand”.
Currently, Noise directly employs about 275 people and has a partnership with Optiemus Electronics Limited (OEL), a wholly-owned subsidiary of Noida-based Optiemus Infracom Limited that enables the company to offer custom-made-based gadgets for Indian users.
“Looking ahead, we want to focus our energies on growing aggressively and becoming a globally connected lifestyle brand. We will do this by doubling down on design technology, R&D and global expansion,” notes Amit.
(Edited by Yoshita Rao)