Healthcare sector has been impacted significantly after the entry of wearable’s into the industry. With the advent of new players in the market, these devices have evolved from a basic pedometer to a proficient vital tracking bands and apparels. In addition to these, with the shortage of COVID-19 test kits, healthcare providers are now looking for ways to relieve the burden, such as incorporating wearable’s and remote patient monitoring devices into their pandemic control efforts. One of the major uses these devices can provide is the feature for contact tracking, which will help individuals maintain a real-time database of the people they have interacted in-person. There a lot of advancements that will happen in the future and it is expected that wearables will help in disease prevention, early detection and helping in taking precautionary measures well in time.
In conversation with Mr. Gaurav Khatri, Founder & Chief Executive Officer (CEO) GoNoise.com- A high traction, high octane e-commerce startup, we attempted to seek his opinion and understand his side of story to ‘Consumer Wearable’s Industry in India’. Here are some excerpts of the interview:
1. Noise did not originally start as a smart wearable company? How and when did you get associated with smart wearable industry? What were the needs and opportunities in the sector?
We always had an inclination towards Tech and wanted to form a brand out of the same, mobile accessories were only an initial part of starting our business but our primary focus was on technology only. We came into wearable industry quiet early, somewhere around in the year 2016. At that point of time, the market was fairly low for these products and there weren’t many players in the market. Wearable were the first product that helped us transition into the consumer electronics sector.
2. The business model in the wearable industry has been constantly evolving. What are your views regarding the same?
The industry can be split into two parts, one is the ‘hardware’ or ‘device feature centric side’ and the other is ‘app based’. Many players are not focusing on both the side of the ecosystem. Although there are certain players such as GOQii, who are trying to develop their own ecosystem, but it is a different game altogether as it is more of an app based rather than feature based product proposition. Other players from tech background in the industry are more focused on the IoT part of the ecosystem. In this industry, first entrants always had a competitive advantage in terms of early introduction of new features in the industry.
3. What are the current pain points in the industry?
I really believe that rising custom duty is not the major pain point. If you look at certain mobile brands, they carry whole lot of setup with them so they have the ability to integrate lot many products together. On the other hand, Indian organizations have to start from scratch in terms of the alignment with the hardware providers due to lack of innovation and suppliers in the ecosystem. Moreover, attaining optimal customer engagement for these products is really difficult for local players as compared to established international players owing to high financial and operational expertise required to achieve the same.
4. As per our research, there has been an issue with the customer engagement in the industry with consumers giving up the fitness wearable after some time? What are your views on same and how do you plan to engage the customers who are using Noise products?
The only reason people give up these devices is that they are not able to get much help in terms of features they want. The main reasons for buying is either to track their fitness level (Since in entry level devices these are the only basic features available), beyond that if someone wants to add the lifestyle quotient, that’s the area where we come into play. For instance, our hybrid smart watch fits into the lifestyle of a consumer and provides the technological benefits along with. Also we are doing a lot of innovation with our product and app in order to enhance customer experience. This is the basic thing you need to do, otherwise you would be just trading the product and the tenure of usage of the smart watch would be very low.
5. According to IDC, the total shipment for wearable consisted of approximately 61.0% of Smart watches in 2019. Why people prefer to buy smart watch as per your view, given the fact that India is a price sensitive market and smart watches are generally a little expensive.
This is mainly due to the additional benefits the smart watches offer. Smart watches do have health monitoring apps and various tracking capabilities for fitness purposes. But these are in addition to the other functions they offer such as communication. On the other hand a fitness band has a small screen and doesn’t offer much connectivity. We have seen a slowdown in fitness bands because people are expecting more approachability and information from the device which is not possible to be integrated into a small screen of a fitness band. Second, the price sensitivity is always there, but there is a market for every price & product category and we are primarily focused on the entry to mid level smart watch category.
6. As per our research, majority of the sales takes place through online mode. However, offline sales channel is dominant in tier 2 and tier 3 cities. Which distribution channel do you expect to grow in the coming future and why?
I expect both would grow, as I believe the market has not reached to a level where it would grow exponentially; the good part is yet to come. But being a tech product, a product where customer education is important, online sales are expected to grow much faster than offline. Although offline number is low but they are expected to grow as well. This is majorly due to the fact that certain offline retailers sell the wrist band and other products as a complimentary product with the purchase of smart phone or these products are used as a freebie to promote a major product or service. We don’t have any exclusive stores right now, but we plan to have few small stores and kiosks in the future. We are primarily based online and currently our product’s actual demand is 3x or 4x than the planned demand, so we are actually setting up and expanding our online channel along with our offline sales channel and have partnered with around 100 retailers across the country to expand our market penetration.
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7. With presence of already established players such as Xiaomi, Fit bit and others in the market. How do you position your product and market your brand? What is the USP of Noise?
Noise is more than a tech brand; it is a tech+lifestyle brand. Noise products are something that provides a lifestyle quotient to its users by providing more on product designing. Most of our users are early adopters, people who are more into Feature+ Lifestyle and want to have aspirational products, so our audience is very different. Also, looking at the price point, we provide additional features in the same or at a marginal increased price as compared to our competitors. In addition to this, the first color display fitness band was launched by ‘Noise’ and we have always taken the advantage of being an early adopter in India.
8. What are the upcoming trends in the industry?
Nowadays, when it comes to health matters, people seem to become more proactive than they used to be, we can expect an increase in demand from people who will be a part of the growing fitness industry and sports enthusiasts in the country. Also what we have seen is that people are demanding more features out of their smart watch or fitness bands other than just tracking vitals. So the trend would be achieving more out of your wearable in terms of the connectivity and accessibility it can provide.
9. Taking into account the impact of COVID-19, what will be the impact on the future of this industry?
I feel that initially it would hit the imports and as it settles down, we could see an emerging trend among consumers to be more conscious and pro active in terms of their healthcare needs. As a result, it would put the wearable category into a growing category. There are not many countries other than Taiwan and South Korea which can substitute China, if the imports get banned from China altogether. However, India holds a potential for manufacturing wearable’s but it is still far away from developing the ecosystem needed for infusing growth and investment in this sector.
10. What is the roadmap for your company for the year 2020?
We would be expanding our product portfolio and invest into all sort of price ranges. Also we are developing lot many variants and would try to build a whole lot of ecosystem for these wearable. Also, we would be launching some round dial entry level watches and upgraded variants of our more or less all watch products. Also, there are products in the market which provide BP measurement and temperature measurement but they are not much accurate. So after things get settle down after COVID-19, we have features such as BP, Temperature and ECG in our product pipeline which we are planning to launch soon in the market.
11. Which is your best selling product among wearables and why?
In-last 3-4 month we have launched 3 different watches, and the response on all of them has been more than what we predicted, if you ask to answer just the most selling product then of-course it is Colorfit Pro 2 the successor model of ColorFit Pro but other model was also picking but then lockdown came in but we are expecting more response post Covid-19 situation normalize. Reason for such a response I would say it is more because of the overall Value proposition along with the design.
12. What do you think is the decision making criteria for a customer while buying a wearable?
Currently there are many criteria but primary ones would be feature-set Vs Price which dominates the list, other is specific feature as per need, design, and so on.
13. As per our research majority of the revenue in India Consumer Wearables Market is generated from wrist bands. Beyond wrist-based devices, how will the market bend to other wearables (such as smart jewelry, chest patches, smart clothing and others). Is there any scope for other smart wearables?
Very True the majority of the market is with Wristbands or smartwatches and the reason is that these got early acceptance and the betterment kept on happening on these products, addition to this these got marketed and pushed by the brands in big way in comparison with other devices mentioned above. We could surely expect some traction but we still feel it would take some more time before it goes to the mass acceptance.
14. As per our findings Low-cost fitness trackers are driving India's wearable market with a 96.2% category share and Smart wearables accounted for 3.8% of the overall wearable shipments in 2019. What do you think is the reason for dominance of basic wearables in the market?
What we have seen in this category is that India is still a developing market and awareness has started in the last 1 year where the market is picking up. The primary reasons for Basic wearable for dominance is Premium Watches are way too expensive for Indian Consumers as India has been the market of entry or mid-level Price range Products and Currently most of the buyers are first time buyers of wearable and they don't want to put a huge amount on their first buy. Secondly, one gets most of the health and Basic Connectivity Features in entry and mid-level products to try which more or less solves the requirement of the consumer.
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