However, profit has not kept pace with sales, with these startups reporting a fall in profit in the same period with some like Boat and pTron even going into red, as per RoC data sourced by Tofler and AltInfo.
“The profitability got impacted due to significant investments we are making in seeding the smart watch category and scaling up local manufacturing,” said Sameer Mehta, co-founder and CEO at Imagine Marketing, which owns the Boat brand. “At present, around 75% of the products are manufactured in India as compared to 2-3% last year,” he said.
The scaling up of domestic manufacturing is the same for all the brands in categories like smartwatch, neckband and earbud.
For instance, as per Counterpoint Research, the share of domestic manufacturing in smartwatch reached 82% in July-September as compared to just 4% a year ago. For the true wireless segment (TWS), the share of local manufacturing increased to 37% in the September quarter from 16% in the previous quarter.
Imagine Marketing posted a 14% rise in standalone sales at Rs 3284 crore 2022-23, while it was Rs 704 crore in FY20. However, it posted a net loss of Rs 101 crore last fiscal as compared to a net profit of Rs 78 crore in FY22.Nexxbase Marketing Pvt Ltd, which owns the Noise brand, is almost doubling its revenue every year — from Rs 350 crore in FY21 to Rs 793 crore in FY22 and Rs 1426 crore in FY23. Its last fiscal net profit/loss could not be ascertained as the FY 23 result filing to RoC is corrupted. Exotic Mile Pvt Ltd, which owns the Boult Audio brand, revenue surged by 168% in the last fiscal to Rs 498 crore while net profit came down by 55% to Rs 4 crore.
Mohit Yadav, founder at business intelligence firm AltInfo, said Indian firms such as Boat and Noise have gained significant market traction leveraging the prevailing anti-Chinese sentiments.
“However, their sustained growth hinges on competitive pricing. While they have enjoyed success thus far, the question lingers whether they can ensure long-term sustainability or will the Chinese competitors eventually replicate the past scenario as we saw with Micromax in mobile phones,” he said.
Mehta of Boat, however, said the company is focused on R&D and innovation so that the brand doesn’t go the Indian phone company way. “We want to take control of your destiny by taking control over the product,” he said.
A Noise spokesperson too said the company has “strategically invested” to bolster human resource, future forward technology, and R&D capabilities.
Counterpoint Research says Boat is the market leader in true wireless speaker and neckband, while Fire-Boltt leads the smartwatch segment.
Wearables and hearables are the only electronic categories in India dominated by home grown brands who together have 65-70% market share even when competing against global companies like Apple, Samsung and OnePlus.
Palred Electronics, which owns pTron, revenue is Rs 148 crore in FY23 as compared to Rs 106 crore in FY21, while it posted a net loss of Rs 2 crore last fiscal as against Rs 4.3 crore profit in 2020-21.
For Seminole Electronics, which owns the Mivi brand, sales more than doubled in FY22 at Rs 150 crore while net profit went up marginally to Rs 3.7 crore (Rs 1.5 crore). It is yet to file financials for FY23.
