Noise eyes festive growth amid smartwatch market stagnation

The Indian smartwatch market experienced its first-ever stagnation in Q1 2024, with shipments recording a modest 0.3% year-on-year (YoY) growth, according to the latest report by Counterpoint Technology Market Research, a global technology firm.

The report attributes this slowdown to declining replacement rates among early adopters and a lack of differentiation and innovation among leading industry players.

Utsav Malhotra, chief operating officer of Noise, provided a broader perspective on the market's potential. "With around 650 million smartphone users in India and approximately 50 million smartwatches sold last year, representing a mere 7% penetration, the market has substantial room for growth," states Malhotra. 

He highlights that while the addressable market currently stands at 7-8%, there is potential for significant expansion, drawing parallels with the U.S. and China, where smartwatch penetration has reached 25%. 

Malhotra forecasts a growth trajectory of 300-400% for India over the next few years.

Despite the general market slowdown, Malhotra emphasises Noise's resilience. "Recent International Data Corporation (IDC) reports mention a slowdown in growth for some brands, but Noise continues to experience healthy double-digit growth," he remarked. 

Although Noise, holding the second-largest market share at 24%, saw a slight dip in shipments, Malhotra remains optimistic about future prospects. "There will be fluctuations, but overall, the market holds significant promise, and we believe there is more potential to be tapped," he adds.

According to the Registrar of Companies, the brand's revenue from operations surged by 79.8% to ₹1,426 crore in FY23, up from Rs 793 crore in FY22. Data for FY24 is yet to be released. 

The company offers approximately 35 SKUs (stock-keeping units), including smartwatches, wireless earphones, and wireless speakers.

Wearables accounted for 82% of the total revenue, which increased by 92% to Rs 1,169 crore in FY23. The remainder of the revenue was derived from audio products and other operational activities.

In December 2023, Bose, the US-based audio equipment manufacturer also invested $10 million in Noise.

Festive season 

In preparation for the festive season, the Gurugram-based brand plans to introduce new products aimed at enhancing experience for existing customers and attracting new users with special offers and entry-level products. 

For existing consumers, Noise will leverage digital marketing, while first-time buyers will be targeted through a brand campaign. 

Performance marketing will also play a role during the festive period. 

Smartwatch: Fashion accessory or utility health device?

In the ever-evolving world of wearable technology, smartwatches have emerged as versatile devices that cater to a broad spectrum of consumer needs. But are these devices primarily seen as fashion accessories or essential health tools? 

Malhotra describes the devices as serving multiple consumer journeys. He categorised these as follows:

• Lifestyle Journey: The smartwatch is a fashion accessory, with customisable features such as straps and watch faces.

• Health and Wellness Journey: For consumers focused on tracking aspects such as sleep, heart rate, and overall well-being.

• Fitness Journey: For athletes monitoring physical activity metrics like steps and calories.

• Productivity Journey: For users seeking to minimise phone usage by accessing notifications, quick replies, and calls directly on their smartwatch.

Malhotra notes that consumers often engage in multiple journeys simultaneously, and it is the need state, rather than distinct use cases, that triggers their engagement with the device.

In a previous interaction with afaqs! Hideki Imai, MD of Casio, a Japanese watchmaker company, suggested that high-income individuals, who initially embraced smartwatches for their novelty, are now turning away as these devices become ubiquitous and indistinguishable. 

Malhotra offers a different perspective. "The potential of a smartwatch is akin to having a computer on your wrist. With the right sensors and algorithms, it remains a relevant and valuable tool. I do not agree with the notion that it has become irrelevant," he asserted. 

He further highlights that Apple's smartwatch business is now larger than the entire Swiss watch industry combined. 

Noise’s app, developed in-house, boasts millions of active users and holds a 4.5-star rating on the Google Play Store.

Brand campaign 

In August 2024, Noise launched its new campaign, Made of Noise, featuring brand ambassadors Virat Kohli and Taapsee Pannu. The campaign underscores how external feedback, whether positive or negative, can help individuals become stronger and more resilient. 

Celebrating its 10th anniversary, Noise sought to clarify the brand’s name. "Initially, 'Noise' might have seemed to carry a negative connotation, but we intended it to represent the genuine voice of what you feel. For our digitally savvy Gen-Z audience, this 'noise' reflects the overwhelming external information and expectations they face. Our message has been to 'listen to the noise within' and resonate with your inner voice," Malhotra explains.

The campaign's black-and-white film was designed to maintain a timeless quality and keep the focus on the narrative rather than shifting colour tonality. 

Malhotra notes, "Our brand identity has always been rooted in black and white. While we initially introduced products in this monochrome palette, engaging with a young, energetic audience eventually led us to incorporate more colour. This campaign, directed by our in-house team, reflects that philosophy."

The brand, co-founded by Gaurav and Amit Khatri, also includes Neeraj Chopra in its brand ambassador portfolio.

On whether Noise considered featuring Neeraj Chopra, given his prominence due to the Paris Olympics 2024, Malhotra responded, "We’ve been focused on creating a seamless narrative with three busy talents, including Chopra, who was preparing for the Olympics. This campaign is part of a long-term strategy, evolving into various formats. It was crucial to align schedules and produce the initial asset while the talents were available."

Malhotra highlights that while Noise is a digital-first brand, the brand will initially focus on digital channels and leverage the campaign across 20,000 retail points of sale, including general trade and modern retail spaces, during the festive season.