How Atomberg is Fanning a New

Wave in Home Appliances

For

BMJ-2022-24
 How Atomberg is Fanning a New Wave in Home Appliances
By combining innovative technology with smart brand-building, Atomberg hopes
to shake up the consumer durables market in India

The fan market has long been dominated by brands like Bajaj, Usha, Crompton
and Havells. While these are well-respected brands, product changes have been
limited largely to fan colour or shape. Spotting an opportunity, founders Manoj
Meena and Sibabrata Das launched Atomberg fans in 2015, bringing some
overdue technology innovation to the category.

Today, Atomberg has an annual revenue run rate of about Rs. 350 crores and has
become the sixth largest fan brand in the country, even while its products sell at
a significant premium compared to mass brands.

In this essay, we dive into the following:

The Atomberg Product Difference

Consumer Insights

Initial Growth Strategy

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 Factors for Marketplace Success

Scaling Further: Offline Brand-Building

Expansion Beyond Fans

Advice for D2C Marketers

The Atomberg Difference

The key design difference that Atomberg offers lies under the hood of their
appliances. Most appliances, including fans, use induction motors. Atomberg has
pioneered the use of a BrushLess Direct Current Motor (BLDC) that is more energy
efficient.

The team points out the following advantages for Atomberg fans:

• Not only is an Atomberg fan remote-controlled, it also consumes only

28W of energy versus the nearly 80W that a normal fan requires.

• It is more resistant to voltage fluctuations and runs three times longer on

an inverter, compared to normal fans.

• The energy saving results in an actual cost saving of Rs. 1500 per year.

Atomberg also offers a smart range that can be operated via an app, Alexa and
Google Home.

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 Atomberg’s smart range of fans can be operated via an app, Alexa and Google
Home
“Fans as a category had not seen any innovation for decades. At the same time,
BLDC motors have been around for years and are used in many applications.

Because we had expertise in BLDC motors from our previous projects, we realised
there was a huge opportunity in redesigning ceiling fans with BLDC motors instead
of induction motors. Not only does a BLDC motor result in 65% electricity saving,
but because these motors are compact and do not generate heat, it also makes
for more flexible and innovative fan design. In fact most of our best selling fans
have a compact and sleek design, which would never be possible with induction
motors” Manoj Meena, Co-Founder and CEO, Atomberg

The Consumer Insights

By staying close to their initial set of customers, the Atomberg team identified
three target segments:

1. Traditionally a low-involvement category, fans were evolving to become

part of home decor. This meant that there was a segment of affluent
consumers who were willing to pay a premium for design.

2. Most home appliances were remote controlled, but fans were still
operated through inefficient regulators. The next wave of smart home
integration was well underway and there was a second segment of
customers who wanted the latest, most convenient devices.

3. Finally, there was a third segment, outside Tier 1 cities, where power cuts
were frequent. For this segment, the money-saving proposition and
long-running promise on inverters were the primary drivers.

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 Studio+ 1200mm Earth Brown is one of Atomberg’s best-selling fan and costs
Rs. 4888

The Initial Growth

Arindam Paul, Head of Marketing & Strategy, and part of the Atomberg founding
team, says that once they had identified these three segments, digital campaigns
with suitable targeting provided the initial fuel for growth.

He shares two interesting learnings from early digital marketing efforts:

• Assisted selling model: The typical Atomberg customer is a male in his

mid-30s and trusting a new brand did not come easily to them. To address
this, the company integrated a call center with their digital marketing
operations. Prospects would click on the ad, go through the website and
then call to learn about the brand. This model of assisted selling proved
to be very effective for Atomberg in the early days.

• Dialling down search ads: Another learning was that Google search ads
were not effective, because it was hard to compete against giants like
Amazon and Flipkart who were bidding for the same keywords. Instead,
ads on the platforms themselves have proved to be more efficient.

Atomberg started with a B2B model, selling bulk orders to corporate offices and
institutions. They then turned to selling on horizontal marketplaces, launching
their own D2C site simultaneously.

Factors for Marketplace Success

Today, Atomberg is the largest fan brand on Amazon and co-founder Sibabrata
Das identifies these factors that led to their marketplace success:

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 1. Unique offering: Atomberg offered remote-controlled fans when no one
else was doing this. It is critical to have a unique offering to stand out on
a marketplace

2. Making reviews easier: Atomberg focussed heavily on reviews and

ratings across marketplaces. The team used hand-written notes and
packaging inserts with QR codes to direct people to the product page for
reviews. Post-purchase emailer flows from seller-central on Amazon, also
played a major role in getting more reviews.

3. Getting positive reviews and ratings: To get good reviews, first and
foremost, the product should deliver on expectations. After that, the key
is not to over-communicate and over-sell in the listings. Instead, focus on
highlighting features which are guaranteed to delight customers.

4. Addressing negative reviews: Right from Day 1, Atomberg monitored

critical reviews across platforms, reaching out to those consumers and
proactively solving their pain points by either replacing the product, or by
getting a service engineer to visit them (even if the customers had not
logged a complaint). More often than not, customers came back and
changed their reviews.

50-60% of Atomberg’s revenue comes from offline sales and after a pilot in
Mumbai in 2019, the brand is now present offline in 150 cities.

Currently Atomberg’s own D2C site contributes 15% of its online revenue, while
the remaining comes from marketplaces. However, the real value of the D2C site,
says Paul, is that it helps you communicate your brand story with high impact and
gather first-hand consumer insights, while controlling the experience for new
launches. “You should think about your D2C site less as a revenue-channel and
more as a way to communicate brand ethos,” he says.

Scaling Further

The Atomberg team confirms what many younger D2C brands are grappling with:
Performance marketing works well for initial growth and customer acquisition,
but hits a ceiling and will provide diminishing returns after a certain point, causing
the cost per order to escalate.

“In order to build a sustainable consumer business, you have to invest in

distribution and you have to invest in brand. Only when you invest in a sustained
brand presence over 4-5 years, can you hope to get any significant mindshare in
the category. Both take time and resources, but they are moats that cannot be
replicated.”

Arindam Paul, Founding Member and Head, Marketing & Strategy, Atomberg
This naturally leads to the all-important question:

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 At what point should you invest in pure brand-building campaigns and when
should you invest in offline media?

It varies from brand to brand, says Paul, but here are the broad factors to consider
for offline media:

1. Category spends: If you operate in a category where spending is high,

then a small amount on ATL will not make a dent. Spend only when you
can afford a minimum 10-12% of total spends. Evaluate your strategy on
a market-by-market basis rather than at country level

2. Target audience: Media costs will vary with target audience. For instance,
to target a female audience, you can use less expensive media like
afternoon shows, while for a male TG, cricket and news, while expensive,
are still the best options.

3. Target markets: Markets where local media is ‘isolatable’ and effective,

like Tamil Nadu, Kerala, Andhra Pradesh, Karnataka and West Bengal) can
give a brand excellent reach across most target segments through
regional channels. This in turn means that advertising can begin with
much lower budgets.

4. Market-share aspirations: How much market share do you want and how
soon do you want to get there? Atomberg aspires to a minimum 10-15%
market share and therefore will need to spend a higher percentage (15-
20%) of the total TV spend of the fans category.

5. Rule of thumb: If you are a new brand, you should reach 60% of your
target audience with 5+ frequency, and you should be able to sustain that
spend for 4-5 years.

Atomberg launched a brand campaign in early 2020, after redesigning their brand
identity with Mumbai-based agency, Chlorophyll.

The campaign, made up of short clips, focused on Atomberg’s core brand

philosophy of challenging the status quo and was titled ‘Why Not?’

Ad link : https://www.youtube.com/watch?v=3vojA-sZQe8

https://www.youtube.com/watch?v=tut_Evt9eNo

After first distributing the campaign on digital channels, the campaign

went to national TV news channels and regional channels across all
southern states and Maharashtra. This was a strategic call, where the team
chose to limit their spends to states where they already had good
distribution.

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 The results of the campaign were heartening – brand awareness rose
sharply. There was a 3x rise in organic traffic to the Atomberg site and
customer acquisition costs came down by almost 50%. The campaign also
boosted the image of the brand and created great interest amongst
retailers.
In fact, says Paul, he wishes they had embarked on the brand-building
journey earlier.

Beyond Fans

Atomberg’s next launch is a mixer grinder, again powered by a BLDC motor

and available for sale in early 2022. The team says it will be India’s first
inverter technology-powered mixer grinder, and both its functionality and
experience will be superior to the appliances currently available in the
market.

Advice to D2C Marketers from Arindam Paul

1. Develop a deep understanding of your customer– who they

are, why they buy, how they buy, when they buy, what they like
and don’t like about your brand.
2. Develop a deep understanding of all acquisition channels that
work for you. When you understand the consumer, the
purchase journey, the brand fundamentals and the acquisition
channels, you can make connections and experiments that no
agency can ever make. Also try and understand the technical
aspects of key growth/performance marketing concepts like
attribution
3. Tips for developing deep customer understanding

• Go through the purchase journey data from Google Analytics

• Go through all reviews/feedback regularly
• Make 10-20 pre-sales calls to prospects and 10-20 feedback
calls to existing consumers every month
• Visit offline retail counters and sell directly face-to face to
consumers, handling their objections in real time. This will help
you design better creatives and more effective landing pages
• Observe consumer behaviour at retail stores and observe
consumer behaviour through heat map data on your website