India’s bicycle industry will be pedalling to a decadal-high demand growth of over 20% on the back of a surge in interest and purchase of premium bicycles in the country. This is primarily because people have begun to see cycling as a means of staying fit and maintaining social distance while trying to avoid gyms. And it’s evident: market leader Hero Cycles is set to report a 100% revenue growth for its premium cycle brand Firefox Bikes for two consecutive fiscals.
“We will continue to double our turnover, growing at 100% over last financial year,” says Sukanta Das, CEO, Firefox Bikes, which has a near 25% share of the premium bike (priced upwards of ₹10,000) market. He expects Firefox Bikes to end fiscal 2022 with revenues in excess of ₹300 crore. “The post pandemic world has been a black swan event for the cycling industry, particularly in India. Never before have we seen this kind of inflection,” he adds.
Bicycle sales in India—the second-largest manufacturer of bicycles in the world—is set to touch 1.45 crore units in fiscal 2022 as compared with sales of 1.2 crore units in fiscal 2021, as per a research report by credit ratings firm, CRISIL.
According to the research firm, the bicycle industry is classified into four segments: standard, premium, kids, and exports. Demand for standard bicycles, accounting for half of all bicycles sold in 2020, is driven by government purchases. While the demand for premium and kids bicycles (nearly 40% of the market) is driven by fitness and leisure needs. In the five fiscal years through 2019, bicycle sales volume logged a modest compound annual growth rate of about 5%. Then in fiscal 2020, it contracted a massive 22% as government purchases plunged and a large bicycle manufacturer downed shutters, read the CRISIL report.
“The pandemic-induced constraints on fitness and leisure options increased the demand for bicycles, especially in the premium and kids segments. Strong growth in these limited the overall decline in sales volume to just 5% in fiscal 2021 despite a further reduction in government purchases,” Nitesh Jain, director, CRISIL Ratings Ltd was quoted in the report. “The momentum is likely to continue this fiscal year, too, given the ongoing second wave of pandemic, and should lead to a 22% growth for the premium and kids segments.”
While demand for premium cycles shot up, manufacturers, who were caught unawares, were only able to service about 30% of the overall demand, “as it was not possible to ramp up procurement and capacities suddenly,” says Das of Firefox Bikes. The premium cycle manufacturer plans to open 150 stores this year, including 15 experience centres, across the country. Currently, Firefox is present in India with a retail network of over 500 plus stores.
Firefox Bikes was one of the original disruptors of the Indian bicycle market back in 2005, when leisure and sports weren't synonymous with cycling. Till then, bicycles were a necessity product for most Indians—it was an economical and ecologically friendly way of commuting. In 2015, Hero Cycles acquired Firefox Bikes and continues to run it as an independent company within the group. “We have a clear focus on promoting and leading the adoption of premium biking or adventure leisure biking in India,” says Das.
Leave a Comment
Your email address will not be published. Required field are marked*