Aiming To Propagate Randonneuring In India: Trek Bicycle
The US-based bicycle manufacturer Trek Bikes recently forayed into the Indian market with 34 models from road, mountain and hybrid categories in the premium and super premium segment. Talking to BW Businessworld exclusively, Navneet Banka, Country Manager, Trek Bicycle India stated that the company intends to promote- randonneuring-a long-distance cycling sport in the country.
How has the bicycling ecosystem evolved in India and how do you plan to leverage on that?
We are not new and have been in India for more than a decade now. Over the last 10 years, we have 27,000 consumers who have bought our products. A lot of them are very active riders. When you talk of cycling, it is one of the ways you can keep healthy. We can avoid a little bit of congestion on the roads by not having a car to work. Then of course the end results will be a little bit of lesser pollution on the roads. Within Trek, we say Cycling is a simple solution to a lot of complex problems. When it comes to how do we tackle this problem, this is one of the ways. To a large extent what we are doing is closely working to building the cycling community. That is a small contribution that each one of us can make for our own health and for the environment. To put it the other way, we are bringing the entire cycling culture in the country. At present, we are creating the retail infrastructure for wannabe riders. We are closely working on getting more people on the bicycle. We are seeing a lot of rides today happening in India. We are seeing people getting on to a bicycle (and) wanting to do 1,000Kms on a bicycle. There is something called as ‘randonneuring’, which is a concept that is being promoted (in overseas markets) and is being there for a lot of time. But in India, a lot of people want to get into randoneering, which is riding a certain distance on a bicycle within a fixed period of time. (For example), you do 200 km for 12 hours. A lot of people are adopting cycling as a recreational activity. Furthermore, a lot of people are getting into performance cycling. Since we have a racing heritage, a lot of consumers come to us and tell us ‘Can you get this product?’
Who are your target group? Which age group and income bracket do they fall under?
It is very tough to say about income bracket because the whole concept of cycling is not about affordability. It is about do you, as an individual, want to stay healthy. Do you want to make that contribution to the environment by getting on the cycle? Talking about the age group, almost 50% of our prospective consumers are going to be between 20-40 years of age.
Over the last few years, there has been an influx of quite a few high-end bicycles like Giant Starkenn, Urban Trail, Ridley, Firefox, etc., in India. How do you differentiate Trek among your peers?
I would like to answer it in two parts in the way I perceive it. Firstly, there can never be too many players. This is because competition is always good for the industry, segment and the consumer. So for me, there can never be too many players. There are 20 other brands which would be bringing something great on the table. It is not about Trek vs. other brands. When it comes to Trek, we are known as the most advance technological company in the world. We hire rocket engineers to develop our products. We work with Formula one companies that make shock absorbers for F1 cars. We have been making carbon fibre bicycles since 1991 for which we (got it) patented. We have patented process for aluminium. Our Alpha Aluminium is designed in such a way that we are taking the maximum benefit of aluminium as a product, material, and metal. It is the lightest bike in the world. We have come out with active braking pivot which is known to have revolutionized the cycling industry. We have come out with something called ISO Speed which takes your fatigue away. All the racing cyclists who are there in the Trek-Segafredo racing team use cycles that have this technology. So these are the things which separate us from our peers. We have focussed on technology from the time we started our operations in 1976 (in the US). The company was founded on the principles of making the best bikes. We offer the best global programmes on India like offering lifetime warranty on the bike frames that we sell. So the frames that are manufactured in 1976 is still under warranty. We offer warranty on the range of Bontrager products, which are our parts, accessories and merchandise. We offer a 30-day unconditional warranty for Bontrager helmets. So what we are bringing on the table are 40 years of innovation, 640 grams of frame, lightest bike in the world launched one day before Tour De France 2017.
Would you be interested in leveraging the make-in-India initiative of the government and starting building your products here?
As you are aware, we are a global company and make (our) products in various countries. The key thing for us is what the design mind behind these products is. As I just said, we work with rocket engineers to design bicycles. That is where the innovation and technology we bring in to our products come in. So all the products that we have (in India) are global products. We don’t have country-specific (products). If you are a consumer in the US or in India, you should get the same quality and level of design products. When it comes to manufacturing, yes we have a unit in the US, Germany, Taiwan, etc. A global company manufactures products where you get the best way you could manufacture and supply to the market. You have to look at the supply chain aspect also when you talk of setting up a facility. At present, we are importing our entire lineup into India from various facilities depending on the type of product. But in future, if India presents an opportunity, (then) why not?
Since India is a price-sensitive market, would you be getting into sub- 20K bicycle to enhance your customer base?
Currently, our products are priced from Rs. 25,400 going up to Rs. 2.14 lakh. A Rs. 25,000- product today would have been super-expensive 10 years back. But today the market that we are operating in is worth US$ 25 million. This segment has grown at a CAGR of 20% over the last 5 years. The overall size of the super-premium cycle market stands at 30,000 units per year and accounts for only 0.2% of the overall market in India. Therefore, we see that there is a substantial market that exists in this (segment) itself. We would like to remain focused on that segment.
How does the market for super-premium bicycles pan out in India?
In India, 16.3 million cycles are sold every year. The premium segment is 110,000 cycles a year accounting for 0.7% of the overall market. I look at approximately 10,000 cycles a month. So I have a base of consumers at 10,000 cycles a month. This is right below 2,500 cycles a month (the segment) where I am operating in. So where are these 10,000 customers going to go in the next 5 years. They are going to upgrade to a super-premium segment.
