Making the right 'Noise': Wearables brand bets big on tech and innovation

While the wearables market has been witnessing exponential growth over the past few years, chief executive of Noise Gaurav Khatri believes it was a result of a low base effect

The growth of the Indian wearables market has tapered, hindered by a lack of innovation and high-quality products. In response, the wearables brand Noise aims to bridge this gap by prioritising technology-led innovation and intensifying its research and development efforts.

Founded in 2014 by brothers Amit and Gaurav Khatri, Noise began as a company selling smartphone covers and accessories. In 2018, the brand pivoted to smartwatch and wireless earbuds.

Today, Noise is among the top wearables brands in the country. As of first quarter (Q1) of calendar year (CY) 2024, the company is the second largest wearables player with market share of 13.8 per cent, behind Aman Gupta-led BoAt at 23.9 per cent, according to data from IDC.

The wearables market has been witnessing exponential growth over the past few years since the category was created. With the start of 2024, however, this growth has slowed down.

Gaurav Khatri, co-founder and CEO, Noise, is of the view that the rapid growth in the wearables market over the past few years was a result of a low base effect. 

“A lot has changed in a year. A lot of trailing, entry-level brands who did really well early last year have been wiped out of the system as they were not able to sustain the technology and innovation piece. It’s a base correction. Regardless, Noise has been able to grow in double digits,” Khatri said. 

Driving success through strategic moves

The company’s success can be attributed to several factors, including positioning its portfolio to entry price points to rapidly gain customers, emphasising community building, tailoring products to consumer preferences backed by strong consumer data, and forging new partnerships.

Noise, in December last year, raised $10 million from US-based audio equipment major Bose Corporation in a deal that valued the Gurgaon-based company at around $420 million. Bose bolstered Noise’s research and development (R&D), a domain which, analysts say, will determine future success of wearables players in the market.

Growth slows in India’s wearables

India’s wearable device market, which includes smartwatches, smartbands and true wireless stereo (TWS), grew a mere 2.1 per cent year-over-year (Y-o-Y) to 25.6 million units in the first quarter (Q1) of calendar year (CY) 2024, after growing by at least double digits consecutively since Q4 CY 2017, according to IDC. 

Smartwatch shipments declined for the first time since Q4 CY 2018, by 7.3 per cent Y-o-Y to 9.6 million units. The share of smartwatches within wearables dropped to 37.6 per cent from 41.4 per cent in Q1 CY23, due to lack of differentiation and innovation in the market.

For Noise, 75 per cent of its sales come from wearables. As such, a change in strategy is afoot, as investing in technology and innovation will be paramount.

“Our efforts in technology and R&D, over the last two years, are helping us do well specifically in AMOLED and high-tech products. We have worked on payment watches, and we are working on other high-tech watches involving healthtech, IoT, etc. There is a lot of innovation yet to happen,” said Khatri.

Targeting premium market segment

Going forward, Khatri said that Noise is targeting the premium segment with its new launches of higher-average selling price (ASP) products, in a bid to offer innovative and better quality products to customers. This, he hopes, will set the brand apart from the competition.

A significant aspect of Noise’s strategy is also its commitment to local manufacturing, with over 95 per cent of its production happening in India.

Despite a lull in the wearables market, Khatri is bullish on the long-term growth prospects of the category.

“Globally, the penetration of smartwatches is over 25-30 per cent. In India, this figure is around 17-18 per cent. There is still enough room for growth. Looking at the numbers for a single quarter is not justified to assess whether the market is growing or declining. We do not foresee any strong headwinds. We are very bullish on growth in the market,” Khatri said.