How Obabox reinvented itself with a cell phone for the elderly and a vacuum cleaner robot with a pet name

In the Brazilian state of Minas Gerais, Obabox saw in the elderly audience an opportunity to make a difference in retail, one of the most competitive markets in the country

Rodrigo Ghedin

28.Sep.2021 16:25 BRT
UPDATED 22:26 BRT

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In less than a decade, cell phones have gone from being an extravagance to an important – sometimes central – part of people’s lives. For older people, those who grew up in an analog world, this change may have been quite turbulent. In the Brazilian state of Minas Gerais, Obabox saw in the elderly audience an opportunity to make a difference in retail, one of the most competitive markets in the country.

ObaSmart is an Android phone designed for older people. It brings an adapted launcher, with large buttons and font size, bold colors, and even an SOS button, which alerts pre-registered contacts when triggered. Also, popular apps have already come pre-installed. The users who get an ObaSmart also have a customer service center where they can solve any doubts and access a sort of an info-product that teaches how to use the cell phone and do everyday tasks on the Internet.

“What was born as a smartphone has become an incredible accessibility solution,” explains Carlos Soares, co-founder and CEO of Obabox, a company focused on retail and, in his words, also a “factory of ideas”.

Obabox was founded in 2004 when e-commerce was still a new thing. Soares was working with automotive lubricants and his partner, Leonardo Davi, was manufacturing and selling promotional t-shirts. At that time, the duo was sure that it was a matter of time for the big retail players to enter the digital environment, so since the beginning, Obabox has bet on being different. “Why would a person buy a refrigerator with us instead of buying it at Casas Bahia?”, he says.

ObaSmart, an Android phone designed for older people. Photo: Obabox/Courtesy

The cell phone for the elderly people called ObaSmart, today one of the flagships of Obabox, was the company’s first big hit. At the time, the models were crude. “People started driving [cars] and talking on the cell phone at the same time,” he explains. There was no Bluetooth and some cell phones didn’t even have speakers. Meanwhile, the crashes caused by using a cell phone while driving had already led to laws prohibiting the practice.

“We found a product in China, a kind of receiver, that you plugged into any cell phone and it directed what the person was talking to you to a radio station. It came with a station that you had to tune to and it would transmit to your car radio what the person was talking about,” he remembers.

Obabox brought the receiver from China. It developed its own packaging, translated the manual, offered an extended warranty, and put extra batteries in the package. The product was a hit.

The core of what we do today is that we understand more and more about people, what people need, and we develop product-related solutions. And sometimes these solutions go even beyond products, they also encompass services, technology, and selling directly to the end consumer.
Carlos Soares, co-founder and CEO of Obabox

“Viva, Conviva e Reviva”

Obabox’s business model is not very different from that of other Brazilian brands, such as Multilaser, which this year went public at the Brazilian stock exchange B3. The company imports or develops products, prints its own brand, and sells to the Brazilian consumer.

The model worked well for Obabox until 2015. That year the company employed about 50 people and had revenues of BRL 25 million. But then came 2016 and the political and economic crises in the country added to the tax reform that changed the rules of the ICMS [a state-level goods and services tax]. All this directly affected Obabox and put its operation at risk.

In 2016 and 2017, Obabox shrank a lot and made losses. In 2017, revenues were BRL 14 million, with a loss of BRL 1.5 million. Seeing the numbers plummeting, the partners asked for help. They called in the marketer Júlio Alves to do a rebranding. Alves has suggested a great redesign about what Obabox should be, basically a whole new strategy.

The watchword of the new strategy was to simplify. The company then worked with 7 thousand SKUs. Obabox is now focusing on a lean product line. “Today we have approximately 12 products in our portfolio. We will end 2021 with 20 exclusive products”, says Soares.

Gira!, a multifunctional electric cleaning brush. Photo: Obabox/Courtesy

Besides ObaSmart, Obabox sells vacuum cleaner robots, vinyl record players, and Bluetooth speakers. It is difficult to fit the products in the portfolio into traditional categories. In the new Obabox, they are divided into three sorts of “universes”:

Live: includes products that “help you do what you need to do, but that you don’t necessarily like to do, so you have time to do what you like to do, get it?” Like… a vacuum cleaner robot.
Conviva: encompasses “those products for you to consume with those you like”. Speakers and cookware are part of this vertical.
Reviva: the category to which the cell phone for older people belongs. “The word reviva is very beautiful, it can mean to give life to something that has no life or to rescue memories from the past,” says Soares.

Each product in the current portfolio was created with the help of the customers. Like every modern company, Obabox is obsessed with data (“we were born digital, we are crazy about data,” says Soares), but does not leave aside the good old-fashioned talk. “We call people, we research, we get into the communities where these people are, this goes beyond a simple geographic or demographic data.”

The proximity with the consumer is one of Obabox’s great differentials, argues Soares. Unlike other rival companies, which, in his view, create products and then seek consumers, Obabox reverses this path:

First we understand people, then we develop products for customers, not customers for products.
CARLOS SOARES, CO-FOUNDER AND CEO OF OBABOX

Another pillar of differentiation is the ecosystem around some products. ObaSmart, a cell phone for the senior citizen audience, is a great example of this approach. It is not just a device, but a set of solutions: the software is developed in-house; there is the so-called info-product, which teaches users how to tinker with the cell phone; and the teleservice, which answers questions about the cell phone and any others involving technology. All these services are included in the price of the cell phone, i.e., there are no extra or recurring charges.

Vacuum cleaner robot with pet name

From talks with current customers came the next innovations in Obabox’s portfolio. The next vacuum cleaning robots, for example, will have names and customization options, such as hat stickers and make-up, because the company discovered that it is common for consumers of the current ObaDuster to treat it as if it were a pet.

The ObaSmart will become a product line, with a simple cell phone with access to WhatsApp and a more sophisticated version, meeting the demand of part of the clientele that likes the facilities of Obabox, but misses more processing power. (And also to please the specialized critics, that did not like the current model, the ObaSmart 3…)

The Obabox’s rebranding worked. In 2018 the company returned to its pre-crisis level, with revenues of BRL 20 million. In 2019, it grew 40% and in 2020, it hit BRL 62 million. Obabox’s big goal is to become a company that sells BRL 1 billion per year. By projections, this milestone may be reached in 2025.

To achieve this, Obabox’s next operational step is to reach physical retail. Today, it sells through three channels: its own e-commerce, marketplaces, and telesales. “In the coming years we will pursue this,” says Soares.

(Translated by Carolina Pompeo)