Prior to the COVID-19 pandemic morning walks were a way of life in most Indian cities and towns. People would often step out for walks in groups of two-three, it was yet another excuse to socialise. In the last one year, ever since social distancing is the new norm, a lot of the conventional morning walkers have taken to cycling. If you are in Mumbai, for instance, you can see the roads alongside prominent promenades like Carter Road, Band Stand or the Marine Drive, dotted with cyclists across age groups.
Sachin Chopra, Founder and CEO, Alphavector India (which owns the Ninety One bicycle brand), says that his monthly run rates in the past one year have grown by 500 per cent. "While kids' cycles have continued to grow at the historic rate of 5-6 per cent, fitness among adults has become paramount. A family typically buys three-four bicycles till their kids hit adolescence. After that, the kids move away and come back after they are 25-30. That coming back has become very strong. Now you have even 60-year-olds taking to biking," explains Chopra. Indians are not just more fitness conscious they also are far more concerned about the environment and want to stay closer to nature.
Similarly, Sukanta Das, CEO, Firefox Bikes, says that his company has witnessed a ten-fold increase in online sales since May 2020. The growth for premium bikes has been six times more than what it was in pre-COVID times. "We are currently looking at a minimum 100 per cent growth in volumes in fiscal 2022 as the strong demand for bicycles that started during the lockdown last year is set to continue for the next two years," says Das. "The demand comes in the wake of the recent spate in momentum for cycling caused by the fear of taking public transport during the pandemic, combined with growing inclination towards both personal fitness and demand for urban mobility solutions," he further adds.
A recent CRISIL report also confirms the high-decibel growth of the Indian bicycle industry. The report says that demand for bicycles has shot up by 20 per cent with sales likely to touch 1.45 crore units compared with 1.2 crore units last fiscal. "The ongoing Covid-19 pandemic has spurred demand for bicycles owing to improving fitness consciousness and leisure requirements. The resultant improvement in cash flows - amid higher capital expenditure - will support the credit profiles of CRISIL-rated bicycle manufacturers, which account for 60 per cent of industry volume," says the report.
India is the second-largest manufacturer of bicycles in the world. The industry is classified into four segments - standard, premium, kids and exports. Demand for standard bicycles, which is the largest segment (accounting for half of all bicycles sold in 2020) is driven by government purchases. Government departments procure these bicycles through a tender process and distribute under various welfare schemes. Demand for premium and kids bicycles (nearly 40 per cent) is driven by fitness and leisure needs. Exports and sales of other kinds of bicycles constitute the remaining 10 per cent demand. In the five fiscals through 2019, bicycle sales volume logged a modest compound annual growth rate of 5 per cent. In fiscal 2020, it contracted a massive 22 per cent as government purchases plunged and several bicycle manufacturers downed shutters. However, the fate of the industry turned for the better in FY21.
"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 per cent in fiscal 2021 despite a further reduction in government purchases. The momentum is likely to continue this fiscal, too, given the ongoing second wave of pandemic, and should lead to a 22 per cent growth for the premium and kids' segments," points out Nitesh Jain, Director, CRISIL Ratings.
The good news this time round is the spurt in demand of premium bicycles which obviously give higher margins and better profitability. The market share of premium bicycles has increased 1,000 bps to over 50 per cent, says the CRISIL report.
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