NEW DELHI: Homegrown direct-to-consumer (D2C) wearables brand Wings Lifestyle is planning to ramp up local manufacturing of true-wireless stereo (TWS) earbuds and smartwatches in FY24 by up to 70% from the current 30% from the first half of the FY24 as it seeks to reduce dependency on China and build the brand locally to connect better with suppliers and consumers, a senior company official said. “As of December 2022, we had about 30% share of manufacturing in India and 70% in China. But in the financial year FY24, that’s going to change to at least 60% to 70% being made in India and the balance being made in China,” Vijay Venkateswaran, co-founder, Wings Lifestyle, told ETTelecom.
Detailing on the rationale behind shifting most of the production to India, he said “manufacturing in India will help the brand build closer ties with the Indian suppliers, pass on the price benefit to consumers, and the distribution network would scale up coupled with offline sales expansion in FY24”.
Wings joins other homegrown wearable brands such as pTron, Play, and Mivi which are increasing their domestic manufacturing capacities. According to the International Data Corporation (IDC), India’s wearable industry clocked 100 million unit shipments in 2022, growing by 46% year-over-year.
He added that the ramp-up in local manufacturing would increase after July 2023. Wings has partnerships with 4-5 contract manufacturers in India but the executive did not name them.
“Over the next 12 months, we are looking to consolidate this and we would like to have a more focused approach. Currently, we are in talks with one or two of them to have an exclusive sort of arrangement”, Venkateswaran said.
In FY24, the brand will manufacture a total of 3 million units across the lifestyle audio (TWS earbuds, speakers, soundbars and neckbands), wearables (smartwatches) and gaming accessories segments.
Of this total, 2 million units will be made completely in India, of which, smartwatches will comprise 0.75 million units and the balance will be split between TWS earbuds while the other products will make up a smaller portion.
The balance of 1 million units will mostly comprise TWS earbuds which will be manufactured majorly in India, and then China. Smartwatches will be completely made in India.
The Noida-headquartered company in June 2022 started manufacturing its first product, Wings Phantom which is a TWS earbud, in India.
“We will be the first Indian brand to launch an exclusive range of made-in-India products. Smartwatches will be 100% made in India going forward and TWS will continue to operate on 70%,” Venkateswaran said.
The executive noted that he does not foresee a major hurdle from a capability perspective in shifting the manufacturing of audio products from China to India, adding that local manufacturing will however require a significant ramp-up to offset any delays.
“But that does not really impact us too much in the sense that the Indian ecosystem would manufacture in 30 to 40 days while the timeline may be 7 or 10 days lesser if made in China,” Venkateswaran said while pointing that, “I see it as a very minor issue that should get sorted out in the next three months.”
The co-founder said that the manufacturing of a smartwatch is relatively time-consuming due to the higher number of hardware components involved and the software capability that needs to be built. “From our point of view, we don’t see any complexity or challenges in terms of the feasibility of making a smartwatch in India. It’s purely a function of time and scale, ” he added.
The brand expects that a production-linked incentive (PLI) scheme for the wearables industry will have a downstream impact on consumers in terms of prices. “While we are not directly manufacturing…it’s essentially going to have a downstream impact in terms of the costs that we get from our factories, and the same will be passed to the Indian consumers. The market is going to explode. The price levels will drop and improve consumer demand, Venkateswaran said.”
According to an IDC report in February 2023, local manufacturing is expected to scale up to more than 80% by the end of 2023, with more players opting for local sourcing of parts/components.
|Top 5 Wearable Companies, Market Share, Year-over-Year Growth (CY22 &4Q22) (Shipments are in thousands of units)
||CY22 Market Share
||CY21 Market Share
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||4Q22 vs 4Q21 Growth
|Imagine Marketing (boAt)
|Fire – Boltt
|Source: IDC India Monthly Wearable Device Tracker, February 2023
The gaming category contributed 90% of sales to Wings, followed by the lifestyle audio and wearables categories in FY23.
“Last financial year, it was almost entirely about gaming. It was the whitespace that we chose to occupy because gaming earbuds as a segment didn’t exist before. But going forward, lifestyle audio and wearables will constitute at least about 60% to 70% of our sales,” he added.
According to Venkateswaran, the hearables market is barely growing beyond 20-25%, but the TWS segment is growing solidly at 50-60% year-over-year, while the smartwatch segment will be defined by improved user experience on the back of software enhancements such as in-built applications, use of vernacular languages, bundling games and social applications.
India-based diversified gaming and sports media platform Nazara Technologies, through its subsidiary Nodwin Gaming, in April 2022 acquired a 35% strategic stake in Wings for around Rs 10 crore.
The co-founder said Wings continues to be profitable. Its revenue grew 300% year-over-year in FY23, and in FY24, the brand is eyeing 100% year-over-year growth.