Blaupunkt’s Sukhesh Madaan on making a space for the brand in the Indian audio market 

The company’s revenue from operations rose 18.02% to Rs 156.29 crore in FY24 from Rs 132.43 crore in FY23, as per regulatory filings accessed from Tofler. Its net profit after tax increased 15.83% to Rs 16.81 crore in FY24 from Rs 14.52 crore in FY23.

In a conversation with BrandWagon Online, Sukhesh Madaan, CEO, Blaupunkt Audio India, talks about compnay’s competitive edge, marketing strategies, and future plans, among others. ( Edited Excerpts)

What gap are you trying to fill in the Indian audio market, considering the established brands, and what portion of the market is still left to capture?

There are many dominating brands in the market, but currently, most of these brands fall within the value segment. While I can’t name the specific brands, there are about three to five brands that come to mind, and they all compete at similar price points. They’re all trying to maintain the Rs 1,000 price point, constantly undercutting each other. One brand might be priced at Rs 1,000, while another is at Rs 950, and another at Rs 949, and so on.

However, the market is shifting. It’s moving away from the value segment and entry-level price points toward the mid-level and mid-premium segments. For example, during Diwali on Amazon, one of the brands that saw the fastest growth, staggering growth of 50-60% year on year, was a non-entry-level brand. Meanwhile, the entry-level brands we all know only saw modest growth.

Blaupunkt, for instance, is a big premium brand, not an entry-level brand. We’re not trying to sell products at low price points, such as Rs 999 for a soundbar. We focus on premium products. Blaupunkt carries the legacy of over 100 years of German craftsmanship. When you think of German brands, names like BMW, Audi, and Mercedes come to mind. That legacy and commitment to quality are what define us.

What is your pricing strategy? 

I define the market like this: There’s the value segment at the entry-level, around the Rs 999–1000 price point for any product. Then there are products from brands like Sony and Bose, which are priced around Rs 3,000 for similar offerings. At the premium end, we have brands like JBL, and we fit in the Rs 2,000 price point. That’s where our proposition lies. Of course, you can’t just sell a product at a premium price and claim to be a premium brand without backing it up with quality. Our product quality truly defines our premium status.

With the surge in audio products, especially post-Covid-19, value segment brands have seen significant growth. However, now when customers are looking to buy their second true wireless earbuds, soundbar, or headphones, it’s like buying a car. When you buy your first car, you typically go for something like a Maruti 800, but for the second one, you want something different. That’s where we come in as a move-up brand. We indeed had some initial challenges because customers were hesitant to pay a little extra for a premium product, especially for a brand that wasn’t established in the Indian market for some time. Brands like JBL had the advantage of staying in India and building their presence. But we’re catching up, and I’m confident you’ll see great things from us in the future.

What is your distribution strategy?

We are already present in the e-commerce segment, practically everywhere. Of course, Amazon contributes significantly to our revenue. We receive the majority of our sales from Amazon. To be honest, we were a bit late to the game. Initially, we thought our products, being more affordable like wireless earphones, would attract customers through other channels, but it turned out we were wrong. We missed the bus, but after taking a step back and reassessing, we decided to focus on the next Diwali season. Our planning and strategy are now aligned, and by January, we should be fully prepared and well-established in the market.

Of course, strategic planning is essential to be successful in this space. It’s not just about where you are, but also about the quality of your products. To ensure success, you need a solid distribution network, with inventory points in the right places. Additionally, the pricing structure and margin success vary between different channels, including e-commerce. There are several factors we need to align before we can fully establish ourselves.

Given the presence of well-known brands in the Indian market, what product innovations do you have in place?

As a German brand, we have always focused on quality, not just being part of the top-line business. We are not funded like many others, which gives us a unique advantage in the way we operate. Our goal is to ensure good growth, and customer satisfaction, and bring products that we are proud of. For example, in the personal audio segment, many brands are selling Bluetooth speakers. However, through our research and market analysis, we observed a major shift from traditional Bluetooth speakers to boom boxes and party speakers, particularly after the  pandemic. Initially, we thought this was just a temporary trend as people stayed home and hosted parties, but it has continued. Now, weekends and house parties are becoming a norm.

In response, we realised the need for innovation in the category of party speakers and boom boxes, especially with built-in batteries for longevity. This research led us to rework our entire portfolio. We are launching seven new models within 45 days in this segment. Our products are designed with thorough research and due diligence. We don’t just follow trends because others are doing it; we innovate with a purpose.

For example, when we launched our soundbar with Dolby in 2019, we were the first Indian brand to introduce it at an aggressive price point. At that time, soundbars were not even heard of by many. We continue to lead with innovation and focus on quality, supported by research and data, not by simply matching prices.

Which products are currently your bestsellers?

We are doing well in three major product categories. Our BB 50 model is a strong performer in the boom box segment. In soundbars, we offer a wide range under the Blaupunkt SBA series, with nearly 10 models, making us the leading brand in this category in terms of variety and sales. In the party speaker category, models like BB 25 and PS 30 are popular and performing well in the market. These products highlight our focus on quality and innovation.

What marketing channels do you rely on, and what strategies do you employ?

Traditionally, we haven’t followed the brand ambassador or endorsement approach, which is quite standard among German brands. You won’t typically see a TV commercial featuring a brand ambassador for BMW or similar brands—at most, you might see them at events like roadshows or expos. We focus on building trust and delivering high-quality products, which is our unique selling point.

We maintain a strong presence on social media and sell directly to customers through our website, Blaupunktaudio. in. Over the past year and a half, our direct-to-customer platform has grown significantly, generating close to a crore in monthly revenue. This demonstrates that customers trust our brand and are choosing to buy directly from us instead of third-party platforms like Amazon.

We support our sales efforts with social media, digital marketing, and other standard practices essential for survival in today’s market. However, brand endorsements are not part of our strategy. If we ever consider endorsements, we would partner with subject matter experts like musicians or singers rather than opting for the typical cricket or Bollywood celebrities.

What are your growth plans for the coming years?

We are undergoing significant changes in the coming years. One of the key shifts is our expectation to achieve nearly 3x growth compared to this year. This is a stark contrast to many brands in our domain, which are either trying to sustain their growth or experiencing a year-on-year decline. Achieving this level of growth will require a substantial investment in marketing.

For next year, we are planning to increase our marketing budget by more than 4x to support this growth. Disproportionate growth demands disproportionate investment, and that’s exactly our strategy. Our financial year typically runs from January to December, and we are currently in the strategic planning phase for 2025. This includes discussions about expanding into new verticals and enhancing our current categories.

We are also in talks with Amazon to finalise plans for next year, starting in January. These strategic discussions are aimed at setting the foundation for our aggressive growth targets, with a significant focus on scaling our marketing efforts to align with our projected top-line growth.

In terms of revenue, how were the last few financial years?

The past couple of years have been somewhat stagnant for us, which led us to take a step back and reevaluate our strategy. We went back to the drawing board to identify where customer demand was heading. It’s no longer about undercutting competitors by price, like selling a product for Rs 900 when someone else sells it for Rs 1,000—that approach has shifted.

This year has been more about resetting and rebooting our approach. Our numbers are roughly similar to last year, with only slight variations. However, this pause was intentional—a strategic move to regroup and come back stronger, rather than fading away entirely.

How are you utilising the offline distribution? Are there any plans to expand? 

This year, we decided to venture into unorganised retail. Despite the growth of e-commerce, a significant segment of customers still prefer buying from traditional retail chains, and we believe this trend will persist due to the inherent preference for a tactile shopping experience—it’s part of the Indian consumer DNA.

We began this initiative in five states and ten cities, starting with the northern region. Next year, we plan to expand to at least 15 states, taking a step-by-step approach. While we have previously been present in organised retail, next year, we aim to be more selective in our approach. We’ve had partnerships with brands like Croma and Reliance Digital in the past, but this marks our first serious foray into unorganised retail.