In this conversation with Komal Agarwal, the founder and Marketing Director of Pebble, a lifestyle accessories brand which started in 2013. We dive deep into how one can build a Consumer Electronics brand from scratch into a large pan-Indian brand. Komal provides a lot of information on how she went about building distributor, retailer and other sales relationships.
We discuss these 4 steps on building a Bootstrapped Consumer Electronics brand:
- How do you find a manufacturer and ensure high quality manufacturing?
- How do you think about your own product and find product-market fit?
- How do you scale distribution across the country and what do these distributors really care about?
- How do you think about branding your product as high quality in a market that is dominated by low quality products?
If you are thinking about these same questions while building a consumer facing brand or just want to learn more about Pebble’s journey from inception to established brand.
What does Pebble do?
Pebble is a lifestyle accessories brand which started in 2013. We started with power banks as our core product category because smartphones were just taking over the market at that time and low battery was a very big pain point for customers. We realized that power banks were going to be a the need of the hour and so we started with them as our core category.
It’s been 7 years now and we’ve diversified into around seven to eight product categories with more than 100 SKUs, ranging from audio products to smart wearables like smart watches. Of course, power banks are still an important category for us.
What was the decision making process and journey from ideation that you want to get into this particular industry to the actual execution of this idea?
I have an electrical and electronics engineering degree in addition to my MBA, so I wanted to do something in the same space. Smartphones were beginning to take over the market so we realized that power banks would be something that could provide a synergy in terms of technical expertise.
There was an initial struggle when we started out, this was definitely a new product category for us. All of our products are contract manufactured. Technical specs and product design is done in house but the actual manufacturing process is outsourced. We didn’t know what factories had the right quality control in place that would meet our requirements. We visited a lot of factories. We shortlisted a few where they were making products for well known American brands because they had the quality standards in place. There are also third party agencies that do the entire quality assurance process and these agencies helped us maintain our quality.
There was quite a bit of experimentation and when we started, we started small. Our first shipment was a small shipment size of maybe 100 units of each model and we started with around five models at the time. As a result, the risk was low and we had the capacity to experiment with that kind of risk.
For our core category of power banks, we’ve been working with the same partners for a long time now — they understand us, we understand them. But for every new category, there is a lot trial in the beginning, it is not a completely streamlined process. There is a bit of risk involved whenever we work with a new category or a new product.
How are you doing the product design in house?
What we design is the look and feel of the product — the mould, the shape, color, size, material. We tell what we are expecting with the technology that goes inside the product. For example, we are looking for a headphone with this kind of voltage and with this kind of impedance. The development of that product is done by the factory because they have the expertise in R&D in place to give us the right output for what we require.
What was your process of Scaling Up and how have your distribution channels expanded over the last few years?
We started with five models and 500 units. We started locally in Noida. We reached out to electronics distributors in the offline market who were dealing with either mobile phones or other similar categories. When we reached out to them, we had to explain to them what the product was because nobody even understood the term power bank at the time. It had to be called a portable charger or a pocket charger or names like that. We had to explain that this is a new product and that this would be an upcoming need of the hour and that they should really look into this since the investment was not very high. We got a few offline partners locally and in a few metro cities — maybe one in Bombay, one in Delhi and so on. That is how we started.
Once we started getting some traction from these areas, we started ordering higher volumes. We also took feedback from the market and started we also did a bit of iterating with the products.
A few months down the line was when we had our first big break. We had reached out to several airline partners — Jet Airways, Air India, IndiGo, etc. — because what we realized was that a power bank is basically a travel related product and at the time the people who needed it the most were travellers. Also, an airline customer is a premium customer who wants a good quality product irrespective of price and it is something that they would need as an impulse purchase. If you are flying and you suddenly realize your phone is out of battery, you may need a power bank right then. We reached out to these airlines and it was an immediate click for them as well. Before these deals, we were importing 500 units at a time and that jumped to 8 to 10,000 units immediately. That was definitely a big break for us and it gave us a lot of credibility as well considering the overall exposure in terms of marketing because we were getting a lot of eyeballs looking at our product.
What was your next big breakthrough?
At the same time, we started hiring a few people in our sales team in different locations — one each for North, South, East and West India. They were simultaneously developing distributors in their areas. The kind of retail partners we were looking for were the ones who already had a place in the market and who were already tied up with a hundred retailers each. We did not want to partner with someone new because if the partner is new and the product is also new, it would take a long time to establish that market. The airlines gave us a lot more credibility and we did end up getting some really good partners in major Metro cities.
At the same time, I remember Amazon had just launched in India . We tied up with these channels as well — it was a no brainer for us to be listed with these platforms. Initially, we did good volumes with them. But we were always a bit hesitant to be aggresive with ecommerce as more and more players entering and the market moved towards price competition became really. I mean it actually became insane. People were just trying to sell volumes and not bothering about price at all. Amazon and Flipkart themselves are also trying to burn money to sell more and more volumes initially with crazy sales and crazy pricing. That would have given us volumes, but then our brand would ultimately have the perception of a brand at a low price point and we would have ended up competing with unbranded or low quality material. We did not want to position ourselves that way and we wanted to maintain the quality, brand positioning and brand pricing. That is why we were never really aggressive in the e commerce platforms at the beginning.
We maintained our premium channels such as airlines, the right distributors, good electronic shops, and eventually we moved on into modern retail. Modern retail again was a big breakthrough for us. There was retail chain called the Mobile Store with whom we tied up. They had more than 800 stores across India and we were immediately present in most of thome.
So these are the big partnerships that really helped us build. These brands preferred us as a partner because of the brand positioning, the credibility of the quality of the product and also since there was no conflict with online pricing. They failed with a lot of other brands because the same product would be priced at half the price online. Whereas, we always maintained our pricing uniformly across channels, so that pushed us through these modern retail chains as well.
How exact kind of work did you do to get into these modern retail stores? Many modern stores talk about listing fees when someone wants to list a new product.
We did face this issue with some of the really big retail chains like Reliance Digital and Croma — they had a lot of such commercial terms that we were not comfortable with. That is why we did not go ahead with those chains. Retail chains like The Mobile Store were more focused on this category of mobiles and its accessories and they were happy to have a brand such as ours associated with them which has a certain credibility and quality assurance. As a result, we did not face a lot of competition because 99% of the brands who were coming in at the time were just looking at e-commerce. They just wanted to sell at the cheapest price and sell high volumes on e-commerce. But we had a different mindset.
What do you do from a marketing perspective to brand yourself as being a high quality player in a market that is dominated by low quality players?
We do not talk directly about quality in our marketing communication. Even if we tell people directly to their faces that this is a really good quality product, nobody will believe it. It can only be assured once a person has used the product or there is some kind of brand promise backing the claim. So what really helped us are few things.
Firstly, the customer care process — I still very confidently say that ours is one of the best in the industry. We give a standard six month to one year replacement guarantee on all our products, which means that if you have any issue with the product, it will immediately be replaced with a fresh product. We don’t have service centers. It’s immediate replacement with a fresh product through courier. That gives the customer a lot of assurance that, “Okay, I can buy this product and in case something happens, these guys are telling me that they’ll replace it”.
Secondly, the credibility we received through our distribution channels such as the Apple Stores where we sell today. An Apple Store wouldn’t just sell any product. They are very, very particular about the kind of product that they’re selling. Airlines as well have to cater to a very premium segment and they wouldn’t just sell anything. So being in such premium places has given us credibility. If people see my product online or in a shop now they’ll say, “Oh yeah! I saw this in the airport, this must be a good product, let me purchase it”.
Thirdly, online reviews and associations with YouTubers and other technical bloggers. The kind of reviews these people give have helped us gain more credibility amongst customers.
Apart from margins, how do you get a distributor to work with you?
This is something that even the biggest brands struggle with to get the right strategies to get partners and maintain those partners for the long term.
There were a things that worked out in our favor. Quality, again, because what these people faced at the time was an influx of unbranded Chinese products in the market without any guarantees orwarranties in place. After a few months, these retailers and distributors realized that 50% of those products were coming back to them from customer saying that they are not working. In this case they ended up incurring a lot more costs than the margins that they were getting on these products.
They realized with time that it would be safer to deal with brands, especially brands that are locally based so that if they face any issues, they could come to us and talk to us about it. Margins is always the biggest factor these companies but margins can only go to a certain point. If I can give them a 10% or 15% margin, I cannot increase it to 20 or 30%.
Beyond margins, our customer care service played a big role in addition to the services we provided to help them increase tertiary sales. For example, my distributor says that their job is to place our products in 1000 retail stores and they have done that. However, whether the retailers are able to sell that product to the end customer and thus place repeat orders from the distributor is something that they need our help for as well. Brands like Apple and One Plus have a lot of pull in the market but at that time, they wouldn’t come to a shop saying that they want a Pebble accessory because we weren’t a big brand. Therefore, the distributors looked at what kind of push marketing we were doing as a brand to help their secondary and tertiary sales.
We were pretty strong in our point of sale marketing, and we still are. Instead of doing mass marketing on TVCs, print, etc., our core focus with 80% of our budget was point of sale marketing. We identified 100 retailers with each distributor that had really good footfall and we ensured that we did the right kind of in store branding for these retailers. We provided them with all sorts of display stands and other marketing material so that a customer who enters that store sees Pebble all around and is inclined to purchase a product from the Pebble brand. That also gave the distributors confidence that this brand is here to stay and they won’t just go off tomorrow.
What are the benefits that you have seen from focusing on these offline channels more than online?
There is much more stability in this offline channel than online. At least it was before covid. That has definitely given us a lot of stability in terms of sales and volumes. We also got a lot of advantages by diversifying into multiple channels within offline — the distributor network is general trade, we were in modern retail and then we were also in travel retail and airlines. All of them together gave us a lot of stability because these spaces are not very easy to enter into. These channels would not want to change brands or partners very easily if they are also comfortable and happy with certain brands.
Almost 30 to 40% of our sales for a while was also corporate gifting. All our products are very useful as gifting products. When these kinds of accessories such as power banks, headphones and others arrived in the market, people realized that at the same price they would get something far more useful for their customers and employees than the traditional gifting. We tapped into this market and it was also a major breakthrough for us. We are actually catering to more than 500 big corporates across the country who choose us for their gifting needs.