Q. Hi Jay, can you tell us a little bit of yourself and your work history? How did you become the director of BAJAAO?
I was born and raised in Mumbai, India. I came to the US 25 years ago to attend the MBA program at the University of Pennsylvania’s Wharton School. After graduating two years later, I was hired by Dell Inc in Austin, Texas. The live music scene in Austin was a big draw. I spent 14 years with them during their decade of hypergrowth, in various roles such as Commerce, Marketing, and Services. One was an expatriate assignment in India setting up an International Services Division. I needed gear for my India home studio, so gigging musicians recommended I try www.Bajaao.com. It was India’s first MI/Pro Audio online store; with a large catalog and a strong fan following, as they were staffed with pro musicians and studio techs. I became a satisfied customer over the years, because their sales folk knew their gear and were good at support. More importantly, I liked their ability to ship product across the country. They always arrived well-packed and fortified (remember this was 2009 where Indian eCommerce was at its infancy; transit damage and theft were not uncommon).
Fast forward to 2014, and I was now an investor working for myself. An opportunity arose to invest into Bajaao.com and knowing the company well as a customer, Suman Singh (owner of www.austinbazaar.com in Texas) and I invested into the company and also took on board and management roles.
Q. Are you a musician? Are you working on any personal music right now?
Yes I come from a family of musicians. I play guitar and bass, and listen to everything including hip-hop, latin, Indian and reggae. My brother is an accomplished conga and percussion player, and my mother received the President’s award for achievement in Indian classical music.
I work on a few personal tunes from time to time, putting down ideas on my Bitwig or Cubase DAW. It helps me stay current with gear and software.
Q. Is there any meaning to the name BAJAAO and how has your business developed over the last 6 years?
Yes, BAJAAO means “play music” in five Indian languages. So everyone recognizes it as a site related to music gear.
Bajaao.com will have grown about 7X over these past 6 years. We are in a typical emerging market. Good growth potential but starting from a low base. This year, we’ll book about $14M in GMV (Gross Merchandize Value). We have about 1.5M unique monthly visitors to the site; 40k of whom call in to our dedicated sales and support agents. Staffing live sales/support agents, including a service center with gear techs, has been key to improving the customer experience and overcoming some of the shortcomings of MI eCommerce. We currently have about 100 employees.
Bajaao chose to differentiate with support and services; primarily because tech and warranty support was very patchy in India. Depending on what brand you bought, you either got decent support or terrible support. The industry mostly pushed boxes, so Bajaao became the seller providing free Lifetime tech support, and a free 2 year standard warranty for all products. Though expensive, they helped enhance our closeness to customer needs. Today 60% of our business comes from these repeat customers.
Another key driver to our business has been widespread growth of affordable broadband/4G penetration in India. The average Indian now pays only 1/20th the price that a US resident does for comparable 4G data or wifi. As smaller cities and towns come online, Bajaao.com has been a beneficiary of their MI/Pro Audio interest. Today, these small towns span over 20k zip codes and comprise over 50% of our sales. Five years ago they were only about 25%; We expect them to grow to over 80% of our sales mix in the next 3 or 4 years. Rapid and reliable broadband growth has also been a gamechanger for our tech support. Today, we’re able to perform remote login and troubleshooting for DAWs and VSTs all over the country. Just two years ago, software support was extremely tedious for customers in remote towns. Connectivity was simply too erratic. Today they’re a lot more stable and improving.
Q. I was very surprised to hear there’s metal Indian bands, can you tell us about that scene and how BAJAAO has supported different music genres?
Yes, India has a very big metal and hard rock scene, including American and European vintage hard rock bands that are super-popular and well-followed by Indian GenZ and millennials. Its very common for twenty-thirty somethings to have metallica, deep purple, scorpions songs on their playlists. In fact each of these bands has played in India to crowds exceeding 25,000 fans per venue.
Bajaao’s founder and Chairman Ashu Pande, and many early employees. played in well-known local metal bands and incubated the rock/metal scene through numerous events they managed, including BIG69 which was a well-attended metal-fest in India with global bands like Hactivist ( UK) and SikTh
Bajaao also has a sound rental division staffed with live sound techs supporting 4-5 live events in Mumbai every night (pre covid). This helped us stay connected to the music community across genres.
Q. What are some of the challenges and benefits working in this industry from India?
Benefits
- India has a very young, tech savvy demographic that’s open to new brands and products. Per capita spend on MI gear is only 5% of US spend, so there’s a lot of upside, if we reclaim our pre-covid economic growth
- Bajaao has a 14-year head start and so its brand is widely trusted. This has been a huge benefit that we couldn’t avail were we to start afresh
- India has a first-world telecommunications network with uncensored free internet. As a result, eCommerce has been growing much faster than retail
Challenges
- Affordability - Given India’s low (albeit growing) per capita income, most consumers simply cannot afford the price points commonly sold in the US and EU. Consumer finance is also not widely available. Therefore Software brands in particular need to recognize this, and introduce limited-edition variants, or limited-time variants, for emerging markets such as ours. The scale is there at the right price point
- Logistics - Though improved, shipping to remote towns is still erratic because the national highways are way behind our telecommunications infrastructure. This makes software even more attractive
- Language complexity – only 350M of the 560M people online are English-fluent. Over the next 3 years, another 400M people will come online. To cater to them we will need to be multi-lingual, supporting 6 languages (from 2 languages today). We have to invest today to translate our web and video content, and also hire a broader linguistic talent pool for our contact centers
Q. We know India was hit very hard from COVID-19, how has the company been doing during these hard times?
Indian business is down 23%, but eCommerce has actually grown due to lockdowns imposed on retail establishments. The core gigging musician and studio producer business is down, however. We have been spending our time securing product and trying to improve affordability with better bundling and pricing.
Q. How did you hear about XCHANGE?
Dinshah Sanjana, an industry veteran from EastWest Music, who (per Ray Williams) was instrumental in driving the download industry in the US, has been an adviser to us, and he graciously introduced us to Ray@Xchange.
Q. Do you have any plans to integrate your web shop with XCHANGE?
We recently integrated with XCHANGE. Bajaao currently offers 35 brands and over 300 Xchange skus.
Q. When did you feel the need to start offering digital software?
Over the last 2 years. Our improved ability to remotely support software, made it slowly apparent that we have the functional infrastructure and capability to sell and support software downloads.
Q. Was it easy to switch to selling software digitally?
Early signs are encouraging as our boxed software market wasn’t large to begin with. Most consumers download mobile apps from google play and Apple App stores already. Their biggest concern today is trust. As long as they’re buying off a trusted site like ours or off any other branded publisher’s, they are fine.
Q. Do you see potential for Subscription sales in India?
Absolutely. Affordability is going to be key if we want to grow the software market. I would predict that subscriptions will outsell regular purchases within 2 years, if the pricing is right.
In India today, midi keyboards vastly outsell portable keys and synth keyboards. And there has been an explosion in home musician/studio podcast gear. India already accounts for almost half of global youtube traffic, as an example. All of these point to a big software market if we can address the affordability equation. We already have the competence on the activation and support side of this because we’ve done it for many hardware brands.
Q. Do you plan on serving any other countries with your business?
Yes. We already ship to a few customers in neighboring countries in south asia and can support them.
Q. We heard you are interested in bringing IMSTA FESTA to India. Can you tell us how that came about?
Sure. This came about during discussions with Ray and Dinshah. Given our reach across the country, on the customer side with the gigging musician and home studio producer, and the producer side given our intimacy with the industry, we expressed our interest to bringing IMSTA FESTA to India. For a virtual fest, Bajaao is well placed with a social footprint of about 300k followers, and its database of 350k customer and prospect accounts. We are excited to build this property over time, because we need to provide visibility to, and grow the music software market in India.
Q. What is your outlook for the music software market in India over the next 10 years?
We believe music software market should conservatively be somewhere between $20M and $30M by 2030.
Of course, we will need to invest in marketing, sales, and support to build these brands the same way we have done for our hardware brands. We are excited to develop this category in the years to come. The potential is immense.
Q. Any words of advice for aspiring musicians or special mentions?
Thanks to you guys at XCHANGE for all your efforts in growing this channel internationally. We really appreciate your support. It’s a game changer from the boxed software paradigm.
I also admire the folks at Yamaha Music for their long-term thinking and commitment to India. They are the first big brand that’s set up a factory for production of MI in India. I hope software publishers take this lead and consider setting up some of their dev or testing teams here. India has a great pool of cost-effective software talent, and we’d be glad to help any interested publisher get started.