Tube Investments of India
 
Tube Investments of India
Tube Investments of India Ltd.
Formerly TI Financial Holdings Ltd.
Pumping up the cycle market
 

Dr D. Raghuram
Dr D. Raghuram

Dr D. Raghuram, President (Bicycles and Fitness), TI Cycles of India, is passionate when it comes to cycling. He himself rides a BSA FoldmanSpring and cycles enormous distances — sometimes the 20 km from his home to the TI factory on the outskirts of Chennai or to his club where he plays tennis and cycles back home. A Ph.D. in thermo sciences from the University of California, Berkeley, Raghuram abandoned academia for consulting before he joined TI Cycles and is now a passionate marketer. Excerpts from an extensive interview:

On branded stores

We now have 106 exclusive branded outlets all over India apart from shop-in-shops. While BSA Go is for the metros, Hercules Express is for the tier-two towns as the brand is more widely accepted in smaller towns. We plan to take it up to 150 by the end of the financial year and with shop-in-shops to 450 outlets.

On the benefits of cycling

There’s neither an impact on the knees nor wear and tear; secondly, it exercises the largest muscle in your body, the thigh muscle — if you need to burn calories, you need to exercise your largest muscle, the next largest one is your brain!

On the top-end cycles

The real top-end Bianchis and Canondales are sold primarily to cycling enthusiasts — we don’t really need to sell to that segment, just be available, and the value proposition to them is that it’s available at an affordable price — previously, they would need to import and importing a single cycle would cost a bomb. Moreover, we provide the service back-up as well.

We have set up two exclusive shops in Delhi and Bangalore called Track & Trail. The whole thing has to be different, including the sales person, since it’s sold on a tech platform; also the consumer profile and consumer handling is different. It’s difficult for the existing network to do that. Soon we will have stores in different places: Goa and Pune.

On the breadwinner models

We sold about 3.1 million cycles last year — one million standard cycles and the rest specials. For the market, the majority is the mass end — it’s still a common man’s mode of transport.

We have a 65 per cent market share in the ladies segment with that one brand, Ladybird. That’s one segment that is growing; the social changes that are happening are helping sales. Growth is upwards of 35 per cent in the ladies segment. Growth in the men’s segment is very small, maybe about 4-5 per cent, though the base is larger. Three of us (TI, Hero and Atlas) hold 80-85 per cent of the market so we need to drive the market. We are approximately at 30 per cent share each.

On Chinese cycle brands

Progressively, the cost differential between Chinese and Indian products is narrowing in the mass segment in the developed countries on a landed cost basis. The cost structure is reflecting the true costs now. Because of the anti-dumping duties that Chinese products attract, on a landed cost basis we are competitive now.

On exports

We hope to have some significant exports this year — exporting the frame and fork to a French retailer. It’s promising. They have validated our quality and manufacturing processes.

On new materials for the cycles

Manufacturers are using new materials, from steel to aluminium to carbon, for more efficient cycles. An entire cycle made from carbon now weighs 6.5 kg. We will be getting into carbon fibre bikes in six months time; we have made a beginning in understanding how to work with this material. We work with a vendor who knows how to make it. We have an 18-people strong design team from NID who will do the design. The indications are that we should be able to significantly bring down the price points in top-end cycles through local manufacture.