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2015 was the year of the wearable – and these products will continue to steal the limelight this year, with projected growth of 75% on 2015 to reach US$29 billion in 2016. The diversity in the backgrounds of the players in the wearables market, which transcends across industries like fashion, fitness and consumer electronics, as well as attracting new start-ups, also cumulated into a myriad of potential uses for wearables, some more niche than others. As discussed in an earlier article, one such potential use is children’s wearables. For this article, I spoke to Ángel Sánchez Díaz, Co-founder and General Manager of Geeksme, about the untapped opportunities in the wearables market and how Geeksme is looking to differentiate itself with its product.
Source: Geeksme S.L
The company identified its target consumer demographics as consumers aged 25 to 50 who do not own a wearable, are looking to live a healthy lifestyle but are not fitness enthusiasts.
The Geeksme GME1 allows consumers to track their sleeping patterns, fitness activities and ecological footprint as well as even claiming to be able to track users’ sexual performance. To appeal to consumers aged 40 to 50 who may not be as tech-savvy, the company hopes that the option to track their sexual performance will entice them enough to make the purchase. The company retweaked the algorithms to translate the raw data captured by the accelerometer into statistics that reflect the user’s sexual performance. The sheer novelty of being able to track one’s sexual performance triggered a lot of media coverage, helping Geeksme to gain prominent exposure.
Source: Geeksme S.L
With the bulk of its sales coming from Western Europe, the company is looking to expand into Latin America and North America. According to Euromonitor International, Latin America is the third largest region in terms of population, yet it accounted for less than 1% of total retail volume of wearables in 2015. The low penetration rate represents an untapped opportunity for wearables manufacturers. For Geeksme, the potential pool of first-time wearables users that it identified as its key customer base is broader. With the key selling point of its wearables being the ability to track the user’s sexual performance, the product would be a better fit in Latin America as compared to other high growth markets, such as Asia Pacific. The difference in cultural norms would mean that Asian consumers would be less receptive towards such a feature.
While the region presents many untapped opportunities, the macroeconomic factors in Latin America will likely weigh on consumer spending in the short term, particularly in Brazil, as real GDP is expected to continue to decline by 2.7% in 2016. As a region, real GDP growth is expected to be flat in 2016.
Geeksme has started out on the right foot by offering an innovative product at an affordable price point. However, demand for its wearables largely hinges on the novelty factor. Sustaining consumer interest in the device will becoming increasingly important with the growing array of options that consumers are exposed to. As discussed in our global briefing, limitations in the form factor will restrict wearables from being an all-in-one device that fulfils all consumers’ needs. Thus, there are plenty of opportunities for manufacturers to carve out their own niche market with their function-specific wearable with a strong product offering. However, one thing that is for certain is wearables will become an important engine of growth for many manufacturers in 2016.