The MD of Saregama dives deep into his Carvaan's expansion and how it is based on consumer behaviour.
A transistor radio-like device has been bought more than two million times in India. For a country that lacks in hardware innovations, Saregama's Carvaan is an island of excellence in the ocean of mediocrity.
Vikram Mehra, MD, Saregama, which is largely a music label, has earlier worked with direct-to-home distribution service Tata Sky and as a broadcaster with Star India. Mehra had commissioned a consumer research in 2015. Along with advertising agency The Womb, Saregama conceptualised Carvaan based on insights.
The 40-plus age group found mobile applications scary. They feared technology and were uncomfortable listening to music with headphones. "Where are the older transistor device and cassette player days where we could lean back and listen to the music being played randomly," the group screamed it loud enough for Mehra to hear from his Mumbai office.
"Carvaan is about anthropology and not technology," he said. It has become a brand now, with many variants in its portfolio. It recently launched Carvaan Mini Kids for the eight-year-olds. Next week, Saregama will make Carvaan Karaoke available for the customers.
No matter how much music the 30-plus age group listens to, when it comes to playing 'Antakshari', they go back to 'Mere sapnon ki rani kab ayegi tu' or 'Lag ja gale'. This is what Mehra and his team found out in a recent research. That is the genesis of Carvaan Karaoke. With this latest launch, Carvaan will move from being just a gift item to something people would like to own for themselves.
During an interview with afaqs! in 2018, Mehra shared that the market for a portable player like Carvaan is around 25 million Indian homes (in value terms, that works out to Rs 15,000 crore, if each household bought a Carvaan).
Is the company now eyeing a larger base? What about recovery from the COVID slump? Are Carvaan owners likely to upgrade? How have customers reacted to the Carvaan Kids launch and the expansion so far?
Mehra dives deep into his company's expansion and how it is based on consumer behaviour.
Take us through the segmentation that we have seen so far.
We launched with a single Hindi product Carvaan. Soon, we realised that Saregama has such a deep library and, therefore, there is no point in limiting it to only Hindi. Then other versions started coming like Marathi, Punjabi, Malayalam, Tamil and Bengali. All of them had 5,000 songs of their respective languages.
Then the upper strata of the society started saying, we love listening to Kishore Kumar, Lata Mangeshkar music, can you give us better quality speakers, as we are used to far superior music experience? That's when we got into a partnership with Harman Kardon and got its speakers integrated into Carvaan, which is Carvaan Gold.
What made you launch a more portable version in the form of Carvaan Mini?
We realised that Carvaan is becoming a gift item. When you are giving a gift to your father and mother, money is not an issue. But when you are gifting to other people, money may become an issue. So, we realised that we may need a lower price point too.
Some people also said that they want to carry their music with them. The overall structure of Carvaan is such that they found it a bit big to put it in their suitcase. Both these factors led to the launch of Carvaan Mini. It is a portable Bluetooth speaker that you can carry with you wherever you go, and also has in-built music.
The Mini had different versions. What did it mean for your product portfolio?
After launching Carvaan Mini, because of all the excitement, we realised that we may have hit a bigger niche. If people want some great music connected to a greater theme, and also want to use it as a Bluetooth speaker, then maybe there are more ways to slice it. Hence, after Carvaan Mini, we launched a Bhagwat Geeta version, a Rabindra Sangeet version, a Gurbaani version, and Telugu and other (regional) language versions.
We started from Rs 6,000, moved to Rs 11,000 with Carvaan Gold, and then with Mini, we had a Rs 2,500 offering. With each of them, depending on what your appetite is, you are getting music, the functionality of Bluetooth speakers and a built-in FM radio. The basic remains the same - easy access to one's favourite music.
As you launch more variants, did your core target audience change?
The basic core target audience of brand Carvaan was always, and still is, the 40-plus age group. We are clear as a brand right now that we are talking just to this group, which prefers convenience over control in their entertainment experience. It is why you see the functionality of all the buttons on Carvaan. Everything has been designed keeping in mind that age group, which does not appreciate buttons close to each other.
What was the thought behind Carvaan 2.0?
Last year (2019), we moved it further... Our customer research revealed that there is a growing demand for podcast content. The podcast is nothing, but programmes like 'Hawa Mahal', which is audio content without the music... But the word podcast scared the older people, who thought it's another hi-tech stuff that they can't access.
We asked ourselves if what we did with music can also be done with podcasts. So, Carvaan 2.0 was born. Carvaan 2.0 in a seamless fashion latches on to your Wi-Fi. After that, as a customer, you have no idea if Carvaan is playing music out of the hard disk inside the device or getting streamed from a server. You turn the knob and from Kishore Kumar songs, it might start playing Zeenat Aman songs. Aman songs may not be in the hard drive and are actually playing from the server.
You also introduced a kids genre in Carvaan 2.0...
People in the 50-plus age group started reminiscing that when they were younger, their grandparents taught them lots of stuff. Today, in nuclear families, grandparents are very often not living with the kids. So, we asked ourselves, can we use the same kids content that grandparents used to teach their grandchildren...
Thus, came the entire Carvaan kids genre as a part of Carvaan 2.0. We have podcasts on nursery rhymes and stories across languages. We also have podcasts on basic stuff like why the sky is blue and how a fish breathes. These podcasts talk to the children aged below 10, like grandparents teaching stuff to their grandchildren.
With the launches, are you targeting loyalists and urging them to buy again or upgrade, because you had said the market is about 25 million households...
No, we weren't targeting only the loyalists. We are talking about the same 25 million people. Many of them might have bought it already and may be interested in upgrading, but the larger base has not bought it yet. They are still not very clear about what Carvaan is. So, we are constantly going and attacking the 25 million base itself.
But there is tricky question hidden in your question and that is if I am trying to expand my 25 million-base to a slightly bigger number. The answer is yes, we are trying to do that. With podcasting content coming in and now with Karaoke coming in, we are like why limit it to 40-plus (age group)? Can we try and get into the 30-plus audience also.
Before delving into the next launch (Carvaan Karaoke), let us talk a bit about the Carvaan Kids.
In our company, anthropology wins over technology any day. We do serious customer research - people who already bought us, and people who are potential buyers, but have not bought us yet. During COVID lockdown, we heard a lot of parents saying "We are sick of the fact that our kids are always glued to the screen. We don't even know how to persuade them to move away from it because we can't send them out to play. After 6-7 hours of online education, there is nothing to keep them busy."
We thought there is great insight here and, hence, launched Carvaan Mini Kids. It is the same content that was sitting on Carvaan 2.0 - nursery rhymes, ABCD, multiplication table, moral-based stories, and mantras from the Hindu religion. It is as same as the other Mini versions we have, but packaged differently for the kids. We have also made it safer, considering the kid may throw it around.
What was the reaction like?
I am amazed at how that product is moving. There is no above the line advertising, it is just moving on sheer word of mouth. It is the fastest-selling Carvaan Mini version that we have today.
So, with the launch of Carvaan Karaoke, are you gradually moving away from being a gift item to something one would buy to keep and use?
Yes. With Carvaan 2.0, this journey started. Carvaan was more of a gift item from us. With podcasting content coming in, I am already seeing that people are buying it for themselves. The average age of Carvaan consumers is 50-plus, but of Carvaan 2.0, it is 40-plus.
Carvaan Kids is bought by the 30-plus, 40-plus age groups, who have kids under the age of eight - the primary customer base of Carvaan Kids. These two products brought the average age of the actual user down, and Karaoke is going to push it even further.
There was a significant drop in your sales during the lockdown. Are you over-dependent on the retail networks? Why don't people buy Carvaan online?
That's the benefit and the curse of a category creator. Since globally, there isn't a product of this kind, so a lot of customers who want to buy it, want to touch and feel it once. Because they have never seen or heard of anything of this kind. So, for us, a large part of our sales used to come out of bricks and mortar retail shops. People used to touch it once and say, "Aah, this is very simple", and then buy it.
With the retail network being shut, we took a massive beating in the first quarter of the financial year (2020-21). Second-quarter onwards, as the network is opening up, we are also seeing our sales growing once again. What worked for us is the people who have it, are big advocates of it...
Consumer behaviour is changing in the new normal as they are purchasing stuff like groceries and handwashes online. Do you see it helping products like Carvaan?
People buy products that they know well online. They know what 'toor' dal is. So, they are comfortable ordering it. Having said that, we are also seeing a change. The contribution of e-commerce to our sales is far higher than what it used to be a year back. It will move very rapidly for the well-established players and it will move slower for products that are yet to become a piece of common knowledge.
We have launched a massive project. Any service engineer, who may visit your house to service your refrigerator or any other electronic appliance, will carry a Carvaan with him to show a demo. Then you can order through them or e-commerce platforms, it doesn't matter. We are taking such initiatives so that more people know about Carvaan.