Rajarishi Chakravorty, a civil engineer and marketing professional has been riding bicycles since he was just five years old. The Delhi-based cyclist has enhanced his riding distance from 10 km/ day earlier to now 35+kms/day. Currently owning two products-one each from La Sovereign and Hero stable, Chakravorty is now drawing up plans to buy a mountain or sports bike in the medium term in order to enhance his riding experience.
“It’s a passion, ever since I remember, as you get to meet so many people, the canvas of life changes, and it’s little more comfortable than walking or running. I am a part of my society cycling group. you can say I and another friend started this together. Now we have close to around 20 members who join on and off. Even though we cycle regularly, during weekends we go on longer rides 25-35 km,” avers Chakravorty.
It is due to riders like Chakravorty that the pandemic has proved to be a boon for the domestic bicycle industry as the growth rates are in double digits in most of the segments. The reasons for such an unprecedented surge are a mix of push and pull factors such as lack of outdoor activities in gyms and parks due to lockdown, limited options for fitness and recreation owing to social distancing norms, as well as there is greater health consciousness among people.
“Bicycle demand is witnessing an unprecedented demand due to five reasons for the Covid-19 pandemic: Physical distancing, Immunity requirement, sourcing/servicing essential goods and services, on-road pollution is less and comparatively safer to ride a bike. The demand has increased up to 100 % in Indian cities, “reveals Dr. K. B. Thakur, Secretary-General, All India Cycle Manufacturers’ Association (AICMA).
It is to be mentioned that the Indian bicycle industry, which is the second-largest in the world, is classified into four segments – standard, premium, kids and exports. Demand for standard bicycles, which accounted for half of all bicycles sold in 2020, is largely driven by government purchases. Demand for premium and kids bicycles, accounting for 40% market share in fiscal 2020, is driven by fitness and leisure needs. 2030.
“The pandemic has proved to be a boon for the bicycle and e-bikes industry as demands soared by 100 percent last year and still remain high, especially in the premium MTB, E-Cycles, and kids segments. The demand in the export segment too grew by more than double. The demand for our products has sustained despite the pandemic — compared to previous years, the demand for traditional bicycles increased by 50 percent while that for electric cycles went up by 100 percent. We are seeing demand in the premium & Kids segment as well,” reveals Pankaj M. Munjal, Chairman and Managing Director, HMC, a Hero Motors Company.
With overall sales of more than 20 million units per year, the bicycle industry makes an instrumental contribution to the retail market with an annual turnover of Rs. 12,000-15000 crores which includes spare parts and accessories sales as well Furthermore, the retail industry is likely to cross the $1 trillion mark by 2025, according to the BCG-Retailers Association of India report.
Being the 3rd largest consumer of bicycles in the world, India has witnessed tremendous growth in the the e-bicycle market which is poised to grow at a CAGR of 42.95 percent and is also estimated to reach a market value of Rs. 7.43 Bn by 2024. As per the Niti Aayog report, the Indian bicycle industry is set to grow at a CAGR of 8.6% between 2017.
According to CRISIL, this is a decadal-high growth in demand for cycles as sales are likely to touch 1.45 crore units compared with 1.21 crore units last fiscal. Nearly 40 percent of which was witnessed in the premium and kids bicycle categories, driven by fitness and leisure needs. CRISIL reckons that because of the significant growth of kids and premium segments their market share increased by 1,000 basis points to 50% in fiscal 2021. Exports and sales of other kinds of bicycles constitute the remaining 10% of demand.
Manish Gupta, Senior Director, CRISIL Ratings Ltd., avers “Although sales were impacted in April-May due to the second wave and consequent lockdowns, it had started picking up in June and have reached normalcy in July-August. We expect Kids and the Premium segment to witness significant growth over medium terms while demanding for standard bicycles is also likely to grow after two dull years, albeit on a low base.”
Challenges and roadblocks
While cycling in these testing times are giving travellers another private vehicle alternative, industry stakeholders opine that the government should use this growing enthusiasm for cycles during the pandemic to prioritise development of cycling infrastructure in metro cities like Delhi, Mumbai, Calcutta, etc.
As Dr. Thakur from AICMA puts it, “From the consumer perspective, infrastructure such as cycle-friendly roads can play a key role in changing perception towards cycling, especially in the cities where motorized vehicles rule the roost. Having dedicated car-free days and zones, exclusive cycling lanes will remain important interventions.”