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Tube Investments of India (TII) is repositioning its bicycle business and chalking out a four-pronged strategy to drive growth.
“Considering the revised dynamics of the industry, we are exploring new avenues for growth, like public bike sharing, strategic partnerships with major e-commerce players, digitisation initiatives such as analytics, omni-channel portal and accelerated expansion of distribution,” L Ramkumar, Managing Director, said in the company’s latest annual report.
Shifting patterns
The overall bicycles market is undergoing a significant transformation with a shift towards the value segment.
The bicycles industry volumes in the trade segment went down by 10 per cent in FY18. TII sold 37.6 lakh bicycles in 2017-18, down five per cent over FY17 volumes. In the specials category (targeted at fun, fitness and leisure activity segments), the company’s volumes fell seven per cent.
With a steady decline in overall volumes, the company undertook steps to rationalise its manufacturing infrastructure and overheads. It closed down its facility at Nashik as part of that exercise.
In 2017-18, TII launched 67 new bicycles and refreshed 60 models. New products and refreshes contributed 41 per cent to the turnover during the year. Revenues of bicycle division stood at ₹1,303 crore in FY18 (₹1,343 crore in FY17).
“We expect that consumer aspirations would steadily grow — individual retail buyers would upgrade from standard variant to specials, whereas the performance of cycling segment would score robust growth over a sustainable period,” said the report. In the premium segment, the company achieved a volume growth of 29 per cent, supported by growth in Montra and Roadeo brands and addition of 48 new stores of its flagship Track & Trail, taking the total number of stores to 227.
With a view to strengthening sourcing and manufacturing for the premium segment, TII made two controlling investments in Creative Cycles and Great Cycles in Sri Lanka.
TII has a share of more than one-fourth of the total organised market with a much higher share in the premium segment.
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