Sameer Mehta co-founder of Boat on the remarkable story of a company that started selling mobile phone chargers and later evolved as a leader in audibles and wearables boasting a Rs 4,000 annual turnover
In 2016, Sameer Mehta and Aman Gupta had separately reached out to House of Marley with their respective proposals to distribute the US brand’s headphones, speakers and other products in India at a time when the country was witnessing a boom in smartphone ownership. Executives at House of Marley – a company formed by the family of Jamaican reggae singer Bob Marley – had one suggestion: Both Mehta and Gupta should meet each other.
Unwillingly, the duo decided to meet at a Bandra hotel in Mumbai. What started as a reluctant meeting, ended up being a turning point in India’s homegrown consumer electronics entrepreneurship: Boat was born within days of the rendezvous.
“It was God’s wish I met Aman along the way,” recalled Mehta. “I got to know him and three days later, we formed the company, Boat. So, it was a lot of destiny and good wishes.”
Then within years of its launch, Boat catapulted Messrs Mehta and Gupta as the poster boys of India’s direct-to-consumer (D2C) industry.
Boat, along with a handful of other D2C brands, that were born around early to mid-2010, including Sugar Cosmetics, Mamaearth, Wow Skin, Clovia among others ventures virtually blazed a trail of a new round of entrepreneurship in India, spawning a formidable D2C industry—from beauty to electronics and from food to fashion.
What started as a fledgling D2C industry about a decade ago is currently estimated to be sized at around $100 billion, according to the India D2C Yearbook 2022 published by IMAGES Group. The report also estimates the number of reputed D2C brands in India at over 800.
Boat was formed in 2016 and its timing was opportune. At a time when Flipkart and Amazon were redefining the shopping landscapes in India with millions of Indians taking to e-commerce, snapping everything from electronics to fashion.
In those years, Amazon and Flipkart were heavily converting millions of Indians into online shoppers with their eyepopping discounts on products. Online retailers shipped their products to every nook and corner of India, creating unprecedented newer avenues for brands and companies to sell not just in metropolises but also in tier 2, 3 and beyond.
“Our turnaround came when we started selling online. We partnered with Amazon and Flipkart and our distribution became a lot easier so we could focus on the products and the brand,” Mehta said in a video interview from his office in Mumbai. “The online distribution channels would distribute your products across India to 19,000 PIN codes.”
Boat started with phone chargers online, to begin with. The Gurugram-based start-up gradually increased its products as it gained prominence among India’s younger generation which is more tech-savvy and which forms a burgeoning online shopper segment.
Selling online also helped the company save on its operating costs to enable the start-up to earmark around Rs 20 lakh on marketing its products. Today, the marketing budget has swelled 1,000 times to around Rs 200 crore annually as the company currently spends around 4-5% of its revenue on marketing.
Mehta said Boat’s brand recall is currently higher than many international electronic brands including Japanese brands that had entered India decades ago.
Brand consultant Santosh Desai said Boat has become a brand to reckon with as a youthful audible brand.
“They have done a wonderful job as it is not an easy category to get into…. The whole business was based on selling sourced products and everyone can do it,” Desai said. “It is remarkable to create a powerful youth-oriented contemporary brand.”
Initial offline hiccups
Even though the D2C brand was generating a significant business online, getting India’s legions of mom-and-pop stores to stock Boat products was still an uphill task.
So, co-founder Gupta went around New Delhi’s tony Khan Market asking store owners to stock Boat products with little success. Boat saw the acceptance of its products in Khan Market as a litmus test as the well-heeled South Delhi crowd shopped there.
Then Gupta sent his wife and mother posing as customers asking for Boat products at Khan Market stores. That worked and Gupta subsequently received calls from the store owners asking him to supply its electronic items.
The acceptance from well-heeled customers was crucial as Boat had positioned itself as an aspirational brand providing global quality at attractive prices.
Made for India
The products also came with features specific to India. For example, their headphones were designed to prevent sweat from entering the speakers, a typical problem in India’s sweltering heat or noise cancellation features suitable for Indian cities where decibel levels top between 83 in New Delhi to 114 in Muradabad, Uttar Pradesh compared to World Health Organization’s guidelines of permissible noise level limits of 55 decibels.
“Indian consumers need a different quality that is very different from international brands. We are a hot and humid country. We sweat a lot and the sweat goes into the headphones and they become bad,” Mehta said. “We also have a noisy environment when we speak on the road the traffic noise gets captured.”
What started as a small company in 2016 selling mobile phone chargers, went on to become a Rs 4,000 annual turnover enterprise (as of September 2023). Now, the company aims to clock one billion in revenues in the next three to four years, Mehta said.
Boat sells a lion’s share of its products through online channels that account for about 68% of its total sales. About 27% of business comes through its network of about 30,000 mom-and-pop stores and it has enlisted distributors in most of the major cities.
Even though it currently has a brand equity and is much more cash-rich, Boat still doesn’t have plans to open Boat-branded stores and said it will continue to sell through online channels and through the network of mom-and-pop stores.
“We have realized that online has its own space but there are a lot of people who want to experience our products and about 80% of India is actually shopping offline,” Mehta said.
Mehta doesn’t believe it is risky for the company to still sell almost 70% of its products through online channels as he believes online tends to be the first port of call for product discovery. Also, the brand is able to do justice to its overall offerings and showcase all of its around 300 very active stock-keeping units (SKU) on online platforms.
“The selection game is also bigger online,” he said. “But we will continue to build on offline as well. All three channels—including our own website—are important for us.”
Boat aspires to be a global brand that is not just manufactured in India but also designed in India.
Bullish on wearables
Wearable at present contributes about 22% of the company’s overall business.
“Wearables, as a business, is very strong for us. In the next four-five years, the wearable business will be a bigger business for us than audibles,” he said.
He said India is currently in a phase that is mimicking China some years ago when consumers lapped up “fancy-looking” digital watches that were mere digital watches bereft of health-tracking features or the user experience.
“Right now, India is going through a similar phase. They are not buying a smartwatch, they are graduating from an analogue watch to a digital watch,” the co-founder said.
But that is expected to change in the coming years as young Indians are increasingly looking for health tracking and other features in smartwatches.
“So, we are building it with a ten-year horizon and we are not looking at it as short-term,” Mehta said.
Boat expects its wearable business to clock $1 billion in the next four-five years and by that time wearable business will be at least one and a half times larger than its audible segment.
“The future of health tech is digital and it has to be so people will move,” he said. Mehta believes smartwatches could be at the forefront in the coming years as a preventive measure against various ailments.
Boat currently sells its products in Nepal and Bangladesh and now is preparing to foray into the Middle East starting with Dubai.
“I would not limit it to Indian brands and Indian products. You have to deliver what the customer wants. The right quality, the right specs and the right kind of user experience. And if you are able to do that you can be based out of anywhere,” he said.
Boat is investing heavily in research and development (R&D) to ensure the tech, quality, specifications and user experience of its products.
Boat currently has an R&D team of 40 people working on its audible products while its double is working in the R&D team on its wearable products.
The company plans to take on the world market with India-designed, India-developed products, shouldering even bigger challenges.
“We both believe in powering through because we both are creating something that is cool and magical,” said Mehta summing up.
Advice to potential entrepreneurs
Be prepared for the highs and lows
The journey is not easy; it’s very, very hard. There are days when you feel like a loser and then there are days when you feel like Alexender the Great.
Be more detail-oriented. It is good to be fast but unless you are detail-oriented oriented you will only fall apart after a point.
Stick to it
There are times when Aman and I question, what are we doing? It was happening earlier and it happens even today. That is the life of an entrepreneur.
If you don’t have perseverance, you will feel like you won’t be able to do it. It’s about breaking through the bad phase and understanding what can be corrected. So, it is about chipping away at the problem one step at a time and keep building your brand.
Evolve as per your stage
You are trying to create something that has never been created. You are creating a large business and there is no template. A Rs 100-crore company needs to be run differently from a Rs 500-crore company or a Rs 5,000-crore company.
So, the streaks you require, change over time and if you apply the rules of a Rs 100 crore company to a Rs 500 crore company it will be a doomsday.
If I put the systems and processes of a Rs 5,000-crore company into a Rs 100-core company, it will not work. You have to evolve.