- Pebble has recently tied up with Vodafone and Idea to focus on offline retail channel in India
- The company has allocated a marketing budget of six to seven crores for 2019
- 90 per cent of Pebble’s revenues come from the offline sales channel
Komal Agarwal (KA), marketing director & co-founder, Pebble India, in an exclusive conversation with EFY Group shed light on Pebble’s journey in India. Apart from sharing how Pebble supports its sales channel in the country, she also shared her thoughts about the combination of IoT and consumer electronics. She is of firm belief that the smartphone accessories market in India has a great future.
Komal told EFY, “80 per cent of the smartphone accessories market is still unorganised where local products are being sold. There is no clear brand in this segment. And scope in this segment is far bigger as compared to smartphones.”
More excerpts follow
ACE – What’s the vision behind Pebble in India? Why did you decide to start with power banks?
KA – Pebble was started by my father. It was a 20-year old company that dealt with UPS systems. Now, we have a big tech team in place for the complete R&D and manufacturing for UPS systems.
Once I graduated, I decided to start something new. Smartphones were a booming vertical in India around 2012-2013 and battery problems had become a big issue for the customer. So, we realised that power banks were a product category that was the need of the hour and had the potential to become really big in the upcoming years.
Since power banks themselves are a power backup item, its technology is similar to what a UPS or an inverter does (these provide power to bigger products and a power bank provides charging to a smaller product like mobile phone).
We already had the synergies or the expertise in terms of the technology so, we decided that this would be a good place to start, both from the market point of view and our existing synergies point of view. So, that is how Pebble was started as a completely B2C consumer-facing brand and power banks were the core products that we started with.
ACE – How did Pebble expand from power banks to smartphone accessories?
KA – After a couple of years, once we gained enough attraction through sales of power banks, we realized that the market demanded many more products in the similar arena. So, we got into a complete range of mobile accessories starting from simple products like cables chargers, power banks and an entire audio segment which consisted of speakers, headphones, earphones etc.
In terms of vision, we see ourselves as one of the go-to brands as far as mobile accessories and portable electronics are concerned. And that is how we are moving forward in terms of maintaining the quality of the products and not with an intention to simply sell it off.
We have a brand-building sort of a mentality which is why we have to maintain the brand consistency, quality, service and everything else. That’s what we’ve been trying to do till now and we plan to do in the future as well.
ACE – As smartphone batteries have improved over time, why did you not enter into the smartphone market, rather than just limiting to power banks and accessories?
KA – With respect to smartphones, there are multiple players already present in the market, both big and small. Currently, the market has consolidated to a few players.
In the beginning, there were far many smaller players. Now we see only selective players in the market. On the other hand, accessories as an industry has literally zero brands in the market right now.
80 per cent of the smartphone accessories market is still unorganised where local products are being sold. There is no clear brand in this segment. And scope in this segment is far bigger as compared to smartphones.
ACE – What different do you offer to your sales channel than other brands?
KA – From sales standard perspective, that includes regular general trade (dealers and distributors), firstly, margins are something that we offer either at par or much better than most of the bands that are available in the market. Secondly, we provide an easy and hassle-free service (replacement service or support in terms of sales).
In case there is any replacement coming from the market or from the customer, we give an immediate over the counter replacement and an immediate back to back replacement to our partners. So, they sell the product confidently.
Thirdly, the replacement rate itself is less than .05 percent. So, when the vendor is selling it to their loyal customer, they don’t feel scared about any negative feedback and reputation as a seller getting spoiled. So, they are confident while selling several products with an assurance that they won’t have to face any replacement demand.
ACE – What’s your marketing budget for this year? Have you allocated any marketing budget for this year?
KA – We do a basic level of marketing where we assign a basic level of budget, though that budget definitely increases and decreases a lot depending on how the year is going and how the sales are happening. If somewhere we feel that certain marketing activity has really boosted the sales, then we might allocate much more budget there compared to elsewhere and so on.
Overall, we have a budget of around six to Rs six to seven crores this year.
ACE – Where is your focus at the moment: offline channel or online channel? Why?
KA – For the past five years, offline has been our biggest focus. Till date, around 90 per cent of our sales come from offline channels and the rest 10 per cent is from online.
The reason behind this is our vision to build a brand and remain a long term player in this industry. With respect to power banks, online space is a completely price-driven market. The top ten or the top five players that you would see in the online markets are trying to compete purely based on price today.
They just keep cutting prices and sell in volumes. Whereas, we provide a premium product and we do not want to unnecessarily give it at a discounted price just to sell more units because that spoils our offline market and spoils the brand image overall. Our product is a really good value for money and customers are willing to pay that price. So, we don’t want to unnecessarily get into a price war for which online only focuses on.
ACE – How do you add new distributors and dealers in your network? Are there any specific criteria that you follow?
KA – We have a sales team in place. This team reaches out to distributors. We have our regional sales manager for every state. Below them, we have either area sales manager for bigger cities and for smaller cities that help in doing the secondary sales.
So, our SMs help us in reaching out to the right players/distributors in the market. And based on the selection process for them and for us, whatever is usually more comfortable, we go ahead with that partner.
ACE – How many people do you have in your sales network? At the moment, how many retailers are present?
KA – Roughly, we have around 60 distributors at the moment which cater to around 6000 to 7000 retailers. The overall structure that we follow is that we have regional distributors in every state.
These are no state-level distributors, but these are city-level distributors (for metros and tier-1 cities). Then these dealers or distributors also cater to the surrounding tier-two or tier-three cities, either directly or through some distributors. And then these distributors finally cater to maybe 100 – 200 retailers.
ACE – Any region in India that you want to focus on in this year?
KA – There is no region-based focus at the moment. But right now, the west and north are bigger regions for us in terms of sales. South and east are slightly lesser so, probably we will focus more on those regions this year.
ACE – Since you started focusing on online this year, how important is social media now?
KA – Social media is definitely something we cannot do business without at all. So we have always been active on social media. Previously, and even now, our focus through social media was on more on brand-building rather than focus on increasing the sales.
This year, we will allocate more budgets for digital marketing and social media because we want to extract sales through them also and make it an ROI based model. So, definitely social media is one of the biggest areas where we’re going to put our budget, including performance based/ad-based or campaign based brand building.
ACE – Are you also driving any digital campaigns to drive sales or getting leads for prospective buyers, as a lot of brands are currently doing that?
KA – There are two kinds of things that we will be doing and have been doing to some extent. One is like a brand-building exercise where we are doing general campaigns telling people more about Pebble.
Second is a digital marketing campaign across Facebook, Google, Instagram, Amazon, and all, where it is purely getting people to click more and more on an ad which takes them to a landing page from where they can purchase our product directly. So, that’s more of a lead generation or sales driven campaign. We’ll be doing both those activities.
ACE – Who do you think is your biggest competition in India? Which brand do you draw inspiration from?
KA – We have a lot of competitors. I think a brand like OnePlus has been our biggest inspiration. It’s not the same category as such, but the kind of products, the affordability and the premium-ness and service that they maintain, is something we definitely draw a lot of inspiration from, because they are a recently launched and very young brand as well.
They also came up in the market when there were a lot of premium players and there were people who were just after price points; trying to get cheaper and cheaper, like maybe Xiaomi and some other bands as well.
ACE – Any major product category that you are entering into?
KA – In a similar category range, there is slight diversification that keeps happening. For example, we are planning to get into audio because there more smart speakers available like Alexa enabled or Google-enabled speakers and so on. Maybe, there can be more diversification or get deeper into the current categories depending on the new technology that comes up.
In the next couple of years, we might get into IoT products as well. These will include smart home systems and home automation systems, thus building an entire ecosystem where all our products are interconnected with each other, whether it’s a speaker, a headphone or a home automation system like a switch or a doorbell.
ACE – What are your views on IoT/smart technology? How soon do you think would smart products like smart wearables completely replace the normal ones?
KA – Eventually, that is definitely going to happen. It is a big possibility. It is only a matter of time as to how soon the complete process of transfer takes place. It’s not like immediately people will stop using the existing products and new ones will take over but it’s going to be a gradual process.
Currently the Bluetooth speakers are the biggest sellers. But gradually, smart speakers are taking over. Once we have smart speakers in place, then doorbells or other small home automation systems will be opted more by people. Wearables like fitness wear or other similar wearables have literally become a norm now. So gradually, these will definitely take over, but it may take maybe another four to five years for a complete transfer from regular products to smarter products.