As consumption soars, brands scour the sound cloud for a premium pitch

As consumption of wearables soars in the country, brands look at ways to build premium niches in the growing mass market for audio devices

With consumption patterns and lifestyle choices rolling down the millennial track, the market for wearable devices in the country is growing at breakneck speed. From fitness devices to hear-ables, consumers have plumped for smart gadgets with increasing fervour and in larger numbers and brands, having flocked in and crowded up the sector, are now looking at ways to score higher margins and lure buyers into big ticket purchases. 

From large national and global names such as Titan, Xiaomi, Samsung among others and scores of small start-ups in fitness, audio and health, all are pitching for a  slice of the wearables market. With reason too. Shipments of wearables saw an impressive 168.3 per cent year-over-year growth in 2019, closing the year with 14.9 million units, reported the International Data Corporation (IDC). 

Within the segment, ear-wear or hear-ables topped the charts with about 57 per cent share, followed by wrist bands, watches and others. The earwear category grew five-fold, shipping 8.5 million units and watches grew 77.5 per cent. Xiaomi maintained its leadership in the market for the fifth consecutive quarter, followed by GOQii, Titan, Samsung (replaced Fitbit) and Fossil, according to IDC.

However the numbers tell just part of the story. While the market is large and growing, it is dominated by basic wearables that account for 96.2 per cent category share, up 177 per cent YoY in 2019. However more expensive and premium products or smart wearables that can run third-party applications on the device itself, accounted for just 3.8 per cent of the overall wearable shipments in 2019.

Brands are hoping to prise open the premium market, by offering consumers a range of value propositions, upgrade opportunities and sleekly designed products. To an extent this has worked in the past year, as shipments of smart wearables grew 49.5 per cent over the previous year.
 

“The market, based on our observation and data, is growing rapidly. It has almost doubled in volume and turnover year on year and there is a lot of potential for brands like ours to accelerate in this business. It offers opportunities for giving diverse value propositions to consumers, which Titan has always been strong in," said Somprabh Singh, business head-Wearables, Titan Company. 

To drive greater demand for premium products, brands are digging into the lifestyle and behavioural patterns that mark a millennial consumer, especially within the audio devices category, which in many ways is akin to the art market. True aficionados are willing to go as high as it takes for the right sound or the tone and pitch and even the look. Brands such as Harman, Alpine, Blaupunkt, Clarion Kenwood, Bose, Sennheiser, B&O, B&W, and scores of others are all chiming in for some ear-time with such customers. 

But how does one do that? By building brand equity, according to market analysts. Make a fan out of a consumer and hook him for life while leading him up the price chain, gradually, they say. Wearable device owners live and breathe active lifestyles, several reports indicate. The consumer also usually pursues an affluent lifestyle and is strongly connected with others who share a similar passion, for fitness or entertainment and health. Working with this insight, brands can offer products that locks them in. 

Brands can also generate stickiness by bringing in products at different price points that serve a single function. For example, a hear-able can differentiate its prices on the basis of the quality of the sound or by innovative features. Anisha Dumbre, market analyst, IDC India said, “Ear-worn devices have found huge appeal with consumers, who are spoiled for choice with a variety of models at different price points. Affordable neckbands are leading the charge of migration from wired to wireless. At the same time, truly wireless devices with improved battery life and connectivity are attracting users to spend more. As more vendors entered this segment with affordable options, the average selling price of the category came down to $39 in 2019 from $63 a year ago, resulting in massive growth in this category.”   

The point she makes is that by bringing prices down brands can drive up volumes. But having done that, they need to work towards brand stickiness and loyalty before leading customers into the premium parlour.