How Atomberg Grows 🪴

Tell me 5 things you had 20 years back and still have at your home

That’s one of my favorite long-drive topics.😬  It makes my friends jog down the memory lane. Their answers often include childhood toys, some crockery with a cool backstory, the indestructible mixie, and sometimes, fans.

You see, when we think of what’s ‘old, functional, and long-lasting’, fans certainly fit the bill. The fan industry has remained relatively unchanged for decades. The only changes that we have observed in the past 20 years or so have been in the decorative embellishments or colour tones of this low-interest commodity. Consequently, the market has been dominated by legacy players like Crompton, Havells, and Usha. 

However, in 2016, a small incumbent incubated in IIT Bombay brought a breeze of fresh air to the fan industry. 

To set the context, about 7 crore fans are sold in India each year, resulting in the fan industry valuation at over 10,000 cr, with an annual growth rate of 8-10%. If we look at it by product type (Ceiling fan, pedestal fan, table fan, and so on),  ~65% of the 7 crore fans sold are ceiling fans, making ceiling fans alone, a 6500 cr business.

In 8 years, the incumbent became a home appliance giant valued at $358 million. I’m talking about Atomberg, a company that has scooped ~10% of the overall fans market share and ~22-23% of the premium fans market share from decade-old companies.

Alright, grab a cup of coffee. ☕ We are going down the rabbit hole of Atomberg

Here’s what we will be covering in our Atomberg analysis:

Table of Contents

• Atomberg’s Zero-to-One Journey

• How were fans sold when Atomberg started?

• Finding B2B Product Market Fit

• Atomberg’s Early GTM

  • Atomberg’s Target Segment

  • Where do customers hang out?

  • What unfair advantages do we have?

• How Atomberg Grows today?

  • Building distributor network

  • YouTube, TV Ads, and Influencer Marketing

  • SEO

• Scaling Horizontally: From Fans to a Home Appliances Brand

Atomberg’s Zero-to-One Journey

In 2012, Manoj Meena, a 2011 pass-out of 5-year dual degree Electrical Electronics graduate from IIT Bombay, wanted to do something new in his core field. He used to win a lot of robotics competitions and was one of those 5--10% of students who really want to apply what they learned in their four or five years of graduation. His co-founder, Sibabrata Das, was his hostel mate and had an equal inclination to build something from the ground up.

Right after college, the duo started fiddling with ideas. Their first product was a Data Acquisition System (DAQ)—a tool to capture hardware data from lab equipment to laptops—which they sold to BARC, ISRO, and DRDO. At the same time, they saw telematics taking off and built a vehicle tracking system. They made good products, but these products missed one important thing: scalability.

So they kept searching for something more meaningful and significantly large. This is when they had a light-bulb moment related to the fans industry. Before we get to it, let’s look at how the fan market was driven at that time.

How were fans sold when Atomberg started?

If you look at the fan launches from legacy brands between 2014 and 2016, you will find that more or less all the products were positioned around durability, speed, or low maintenance.

If you look at the fan releases by leaders of the industry such as Havells, Crompton, and Usha, you would find them promoting benefits like:

• Large wings

• Anti-rust / Non- corrosive

• More speed / Higher power

• Less noise/ Quiet

All of them were great USP but Manoj and the team found something even more powerful. 💪

Manoj’s final year project was on BLDC(Brushless DC) motors; a motor when used in fans, results in up to 60% lower power consumption. In monetary terms, this means ~ ₹1500 annual savings on electricity bills.

Another industry dynamic that worked in their favor was the state of the fan manufacturing industry. Fan manufacturing was fairly established, leading to the easy availability of spare parts such as blades, and bodies. So, Manoj. Sibabrata and the team decided to build a BLDC-motor-based brand, called Atomberg.

On a side note, I found that Orient also launched a BLDC fan called EcoTech in 2014 but for them, it was yet another fan in their product line and was priced 3 times higher than a usual fan. In short, It didn’t take off. But it tells us that it wasn’t just the innovative idea of BLDC motors that made Atomberg what they are today. Let’s look at how Atomberg approached Product Market Fit and carved its space in the fans industry.

Finding B2B Product Market Fit

Anyone building a product-based business faces 2 big questions:

1. How do I do manufacturing? Create assembly lines, package, and deliver 

2. How do I sell?  Attract customers

Let’s look at how Atomberg started building both sides of the business:

Manufacturing

As a first step, they built a prototype. But neither of them had experience in manufacturing. So they went to the one place where over 90% of the world’s students go for supplementary learning: YouTube. With some basic assembly line understanding, they made a small, 3bhk-size assembly line, capable of building 500-1000 BLDC-motored fans per month.

Attracting customers

To attract customers, they needed money.  But when Manoj and Sibabrata approached investors initially, they were turned down saying “Ye kya le ke aaye ho, Crompton, Havells aise hi kha jaenge”.  When they approached retailers, retailers also brushed them off saying the same thing as investors and asked them to leave. 

Another reason retailers showed them the door was the price. A traditional fan was sold in the 1500-1700 range, but they were selling it at 3500 due to the higher cost of the underlying technology. 

The experiences made something clear to them: B2C will take a lot of resources.

So, they started looking for B2B players for whom the electricity cost from fans really mattered. They talked to factories, industries, schools, colleges, hospitals, and so on. That’s when they came to know about the ceramic industry. Two things about this industry: 

1. It is highly clustered: most of them are situated in 2 districts of Gujarat - Morbi and Thanagadh. (just like diamonds in Surat) and

2. They have fans running 24/7

The ceramic manufacturing units in the Saurashtra region had large industrial sheds for drying tiles and sanitary ware. Each shade had 500-1000 fans, and each company had 3 to 4 such shades.

For the next 1 year, Manoj and Sibabrata visited the factory owners, spoke to their electricians, and set up a service center there. The good thing about clustered industries-word travels fast. Atomberg went viral in that area. 

Next, they started finding more clustered industries like ceramic. They figured that the textile industry is labor-intensive and has large dormitories for 200-250 laborers staying under one hood with fans running 24 x 7. Another one was potato cold storage units where fans along with ACs were used to maintain a consistent temperature.

Simultaneously, leveraging their IIT network, they successfully placed their product in the newly constructed wings of IIT Bombay. This initiative was quickly followed by other IITs, IIMs, and various educational institutions across India. They also approached corporate clients who are big on sustainability such as 5-star hotels (ITCs and Oberoi’s), hospitals, Infosys, Reliance, and Indian Railways, and turned some of them into their customers.

Today, Atomberg holds a 70% market share in ceramic companies and factories in the Saurashtra region.

Alright, so far we have seen how 2 engineers with no manufacturing or sales background were able to make a great product and sell it to b2b clients. Let’s get to their B2C journey now. 👇 

If you’d like to read more on PMF, Arindam Paul, CBO of Atomberg shares his insights in this post on X. If you are short of time, alternatively, you can go through an AI-generated summary here.

Atomberg’s Early GTM

Although Atomberg found early success in b2b, only 10% of India’s fans market is B2B. By this time, they also had raised their two rounds of funding totaling $1 million.

With money in the bank and an ambition to turn Atomberg into a household brand, they started exploring b2c channels.  By talking to customers, Atomberg identified 3 distinct consumer segments to target.

Atomberg’s Target Segment

1. Consumers in tier 3 cities where power cuts were frequent. They positioned themselves around cost-saving and long-lasting performance for these customers

2. Affluent customers in tier 1 cities who consider fans to be an important part of home decor and are willing to pay for sleek designs

3. Customers who love technology and would love to show off a remote control fan to their friends and family. 

Before we move to how Atomberg designed their B2C GTM around the above target segment, I would like to roll back and discuss ‘how to think’ about marketing for startups first.

When building a startup’s marketing strategy, there are 2 core questions to be answered:

1. Where do our customers hang out?

2. Where do we have unfair advantages?

Your marketing strategy is a set of channels that answers both questions.

Where do customers hang out?

• Where do they spend time offline?

• Where do they spend time online?

• What social media do they use?

• What digital content do they use? (eg. written, video, podcasts)

What unfair advantages do we have?

• Product: A much better value than others (experience/savings)

• Skill: 10x ability in engineering, design, or any other discipline

• Experience: Deep understanding of the space

• Brand: An existing brand asset

• Cash: Deep pockets

• Connection: Relationships with industry-specific leaders, VC’s

• Fame: A celebrity or influencer on the cap table

• Narrative: A compelling founder story

Atomberg realized a rising trend of their target customers going online to buy appliances. Unlike general trade, online selling was also a level-playing field for Atomberg (their unfair advantage) because it was equally new for traditional players and everyone was figuring out how to do it right.

So, they started with performance marketing on Google and Facebook. However, they quickly noticed that top search rankings on Google were largely occupied by marketplaces like Amazon and Facebook. In contrast, advertising on these marketplaces was an open space. So, they increased their investment and optimized their campaigns on Amazon and Flipkart, which led to better ROAS. In their first Great Indian Festival Sale of Nov’16, they sold ~500 fans with around 2% ad conversions. 

If this is your first time reading the growth loop and you’ve learned something new so far, consider subscribing

How Atomberg Grows today?

From an operating revenue of ₹75L in ‘16, Atomberg has grown to ₹848 Cr in ‘24. That’s a massive 1100X topline growth in 8 years. Let’s look at how they got here

Building distributor network

For fans, the bulk of the business is offline, and changing consumer behavior at scale (offline to online) takes disproportionate time. Plus, Atomberg had customers saying, “ I’ve spent so much on the interiors, I’m not going to buy a fan without seeing what the colours, what the shades are”. This gave them the conviction to build an offline distributor model.

They started with Bombay in 2018 and spent a year understanding how the distributor-led market works. While distributors did not entertain them initially, they started seeing repeats increasing and push turning into pull over time.

In 2020, COVID disrupted the distributor-led market for large players and gave their online sales a large boost. But they also used this opportunity to go aggressive in disjointed markets such as Kerala and TN with online ads. As soon as Covid ended in 2021, they went all-in in these markets with a deeper offline presence and ATL’s. Kerala also clicked because of the high literacy rate and people were coming in from the Gulf with money and constructing their own houses. 

By now, they had their offline playbook ready. Using it, they next expanded to the southern states of Karnataka, AP, and Maharastra. 

Today, Atomberg is present in 60 cities.

YouTube, TV Ads, and Influencer Marketing

Whenever the consumer becomes aware of their need for the category (for fans it is when you move to a new house, renovate an existing house, or your fan stops working), there is a set of brands that you immediately think of. These brands form the initial consideration set for the consumer.

Now, Atomberg is going after market share, so they definitely have to be amongst the initial consideration set. This means they have to be visible to their TG, even when they are not in their purchase journey. Atomberg solves with using Youtube extensively and doing TV ads sometimes

Example of Atomberg TV Ads

After the initial consideration set, comes the active evaluation stage. This is when consumers are actively looking for your category and are already in need. Atomberg runs campaigns across Google (search, display, Youtube) and Facebook targeting this in-market audience. And once they click on the ad and come to the landing page, they have lead magnets to capture the lead. Following this, there are specific remarketing ads shown to them across Google Display and Facebook. There is marketing automation across mails and WhatsApp to answer all their possible doubts/queries and nudge them to purchase.

The last phase is the purchase phase. Here, Atomber relies completely on bottom-funnel campaigns like Amazon and Flipkart ads as a good chunk of the searches are initiated and purchases are completed on those platforms.

SEO

Over time, performance marketing fetches diminishing returns. So, you have to build organic ways to grow parallelly.

In the case of fans, we can divide searches into two parts:

1. Generic Keywords like Ceiling fan, fans, etc.: These are high-volume keywords but extremely competitive on Amazon and Flipkart marketplaces

2. Specific Keywords like BLDC fans, remote-controlled fans etc.: These are low-volume keywords but easy to rank and convert customers.

Like many startups, Atomberg has put disproportionate energy on specific keywords from 2022, and within a year, they’ve started ranking #1 or #2 for all of them. Today, they keep working on general keywords and can rank on the first page and get some traffic from there but most of it still goes to traditional brands.

Scaling Horizontally: From Fans to Home Appliances, all-inclusive

Over the last 8 years, Atomberg has built a household name in the fans category and a fairly vast distribution network in the south. 

Now, if you look at their website or YouTube channel, it is fairly clear that their current strategic focus is to use their network and brand image to move beyond fans and become a home appliances leader.

They have recently added mixers and smart locks to their product offerings and continue to find the product-channel-market fit for both of these categories.

Alright, that’s a wrap on our Atomberg analysis. This was fun. 🙃

I hope you learned something new here today

PS: Other random, interesting highlights of my last week

1. A reel I laughed a lot on: here

2. A thought I thoroughly discussed with my wife and office colleagues:  In a couple of decades, there won’t be many people who can write. 

3. Something new I found this week: The wine bottle opener that’s just too awesome

Until next time! 👋

Saurabh