For wearables and electronic devices brand Boult, which started off as an audio products maker before getting into a wider range of items, the top spot in terms of market share has eluded the company despite high growth. But the two founders — brothers Varun and Tarun Gupta — insist that being profitable takes precedence over market share.
Boult’s ability to scale quickly — it is estimated to have posted Rs 800-850 crore in revenue in fiscal 2024 — without raising any external capital made it the winner in the ET Startup Awards Bootstrap Champ category this year.
“We do not want to participate in that race of just getting the No.1 spot while being lossmaking. We want to be sustainable — financially and economically,” said Varun Gupta, who is also the CEO of Boult.
According to market research firm IDC, Boult had the second highest market share for wireless earphones in the April-June quarter behind Warburg Pincus-backed rival Boat. In the overall smart wearables category, which includes smartwatches, Boult was at the third spot, after Boat and Noise.
“Being bootstrapped…we can’t just have overnight success. We can’t just go from Rs 1,000 crore to Rs 3,000 crore because just the working capital will never support it. Luckily, we don’t have any investor pressure where we have to show top line. We don’t have any IPO pressure where the top line is everything,” Tarun Gupta said.
Discover the stories of your interest
After having first cut his teeth at selling audio products when he was working at ecommerce marketplace Snapdeal, Varun Gupta came together with brother Tarun — an investment banker in the US at the time — to launch Boult in 2017.Boult cashed in on the growing demand for wireless audio devices and smartwatches, cementing its position in the commoditised market where cheap products imported from China meant brands, even larger ones, could do little in terms of defensibility.
ETtechThe brothers say companies that manufacture locally have a competitive edge today.
“When you make it in India, the cost is better and the control on product quality is much better. So, control on R&D, speed of product development, speed of manufacturing, control and quality, everything is much better…people think if you’re sourcing from China, it will be cheaper and it will be better, which is not the case anymore,” Varun Gupta said.
“So, India has really amped up on this manufacturing. Today as we speak more than 98% of our products that we sell are made in India,” he added.
In FY23, the company’s revenue crossed the Rs 500 crore mark, with a net profit of around Rs 20 crore. Both revenue and profit nearly doubled from the year-earlier period.
Over the last few quarters, the wearables category has seen a slowdown in growth as new demand for these products has tapered off. Seeing this trend, Boult plans to diversify into categories such as home audio systems, power banks and car dashboard cameras.
Even within the wireless earphones segment, the company is focused on maintaining stickiness with its existing customer base of 25 million.
“Overall, as a brand, we’re trying to increase our ASP (average selling price) because that eventually helps us increase our profitability. Also, all the customers that we’ve acquired over the years of time, those happy customers, will come back and buy our product,” Tarun Gupta said. “In our category, almost 90% of customers upgrade within 12 months. So those customers who purchased a product in the last 3-5 years want to upgrade and, of course, they want to spend a little bit more.”
Fundraise plans
The CEO said Boult keeps receiving inbound interest from investors but it is in no urgent need for capital.
“Of course, if there’s good strategic capital and the investors are aligned with the sort of growth numbers and plans that we have, we don’t mind having a partner in that,” he said.
On what gaps a potential strategic investor could help Boult address, Varun Gupta said: “One is in the tech space — any company, national or international, which is into development of products, into R&D, into development of chipsets and so on.”
“Any company which is in the similar space, let’s say audio products or smartwatches or any other international pair doing consumer electronics. Of course, there is a lot of synergy that we’re able to deploy,” he said. “The last one is marketing and distribution. Any company which is very strong in offline distribution, of course, helps us penetrate the market and similarly for marketing, any of the consumer brands where they’re able to give us some expertise and not just capital.”
Going ahead, the company wants to expand its offline presence.
“We’re seven years old and we have completely focused on ecommerce…but of course, omnichannel is the way to go to be able to be accessible to every consumer in every possible fashion whether it is ecommerce, quick commerce, or offline presence,” Varun Gupta said.