After UAE, Noise Announces Expansion to UK, EU Amid Slowdown in India's Wearables Market

Wearable device brand Noise has decided to venture into the UK and European Union markets, it said on Wednesday. The company will provide full range of its products, including smartwatches, smart rings, and audio devices through luxury retail stores Selfridges London and Printemps Paris.

“(It is) a step towards accelerating global accessibility of Made in India smart wearables,” the company said in a statement.

Its co-founder Gaurav Khatri says the company is looking for expansion into other countries as well in the future.

It is Noise's second announcement in a month on exploring overseas markets. On March 12, the $420 million valued company had announced its foray into the UAE market.

Its expansion spree has come while the Indian wearable device market is witnessing weak growth.

“We are just moving ahead with the deals that are getting converted first. So I think UK has got us faster conversion in terms of the deal that we are working on. US is still a little far. I think we are working towards it,” he says.

Initially, the company will be providing its products through distributors with a focus on building the brand image out of these territories.  

Later on, it may go for online marketplace in the second phase and finally to the D2C segment.

“(But right now) we are going slow… Our idea is to create the brand in the territories and work with the partners who aligned with the vision of the brand to sustain and do a sustainable business,” Khatri says.

There may be stiff competition awaiting Noise in the overseas market. Companies like Google, Microsoft and Huawei are the leading players in West Asian market, according to market research firm Stellar.

While in the UK, Apple, Samsung and Xiaomi are among the top wearable device brands.

Slowdown in the Indian market

The company’s global expansion comes at a time when Indian wearable device market has been sluggish.

Last year, the market reported a 11.3% decline in shipments to 119 million units, according to IDC data. It was for the first time that the market shrank, led by a sharp fall of 34.4% in smartwatch segment.

With a market share of 24.8%, Noise was the leading brand in smartwatches during the October-December quarter of 2024.

Khatri does not shy away from accepting the decline in the market.

“The category, of course, has seen some decline and, I think, that has continued in FY25 as well. The reports are already out in the market. So there is no shy away from if the volume has gone down or not,” he says.

While Noise will be exporting its products to the overseas markets, the global expansion is not because of the weak demand in India, Khatri had clarified during the company’s UAE announcement.

“It's (global expansion) technically the addition of channel into the current business,” he says.

Muted show in FY24

The overall demand slowdown in the wearables segment has affected Noise's financials in FY24. After a robust growth of almost 80% in revenue in FY23 to Rs 1432 crore (from Rs 804.9 crore in FY22), the company posted a mere 0.4% rise in FY24 to Rs 1,439 crore, Tracxn data shows.

Moreover, the company posted a significant increase in cost of raw materials from Rs 5.4 crore in FY23 to Rs 722 crore in FY24. It reported a loss of about Rs 20 crore in the last financial year in contrast to a profit of Rs 88 lakh in FY23, according to Tracxn data.

According to Khatri, Noise is well placed in comparison to other Indian brands who are sustaining on lower ASP (average selling price). It has already started exploring different price points.

The company’s collaboration with Bose, he says, has helped the company to venture into a higher price point with its Master buds TWS earphones.

In December 2023, Noise raised its maiden funding of $10 million from audio products major Bose.

Noise will continue to focus on audio category in the next financial year as well.

“I think we are still under penetrated there (audio category) and there is a lot of scope for our set of brands to do well. The focus as a brand is to grow into the high ASP products or into the mid premium products, somewhere between Rs 2,000 to Rs 10,000.”

In 2024, smartwatch ASP declined 9.1% from $25.8 to $23.5 while the overall wearables segment reported a fall of 7.1% to $19.8. 

“Noise’ ASP in the smartwatch category is 20-30% higher than the peers in competition. We have always had a focus on increasing the price year on year.”

‘Focus on innovation’

According to industry experts, lack of innovation and weak technological advancements are the reasons behind muted demand in the wearable device market, with pricing being the only differentiation. While Khatri agrees with the argument, he says that Noise has been constantly investing in innovation and R&D, listing its initiatives like the company’s tech incubator division Noise Labs and the company’s partnership with Bose.

“As a business, we are innovating much faster than any of the peer brands in the global world. The Bose-Noise partnership is one of those. Bringing AI in the watches is another.”

However, the company declined to share its investment in R&D.  

For Khatri, the strong growth in the market earlier is the reason behind the slowdown now. He hopes that the situation will change.

“Not everything keeps growing for ages. There are times that slowdown and correction happens. Then the innovation becomes much more important than just having the product,” he says.

For the future, the company is focused on bringing the technology supply chain closer to its manufacturing to do “larger things than just assembling the product in India”.

Noise has already begun component manufacturing in the country, starting from SMT (surface mounting technology) for PCBs.

The company’s global expansion will go hand in hand with its India business. Khatri says Noise has learnt a lot in the Indian market and the company is just trying to replicate that learning into different geographies.

The strategy, according to him, may help the company to become a global brand out of India, which is its long-term goal.