The previous year was certainly a terrible one with Covid-19 to blame for! The widespread global pandemic had put most of the industries on the backfoot, some of which are still not able to recover completely. However, it looks like a few of them actually flourished more during the said situation and one of them is the bicycle industry. AlphaVector has reported an astonishing growth for the last few months and says that with the pandemic, people took up cycling to remain healthy & fit in a socially distanced world. The company saw a surge in demand across age-groups and segments throughout India. The start-up states that this was a business opportunity in the making and the results have been exciting.
In order to be precise, AlphaVector registered a massive 300% increase in ARR, growing from Rs 50 Cr ARR (annual revenue rate) to INR 200 Cr ARR in ten months (Apr-Jan 2020). In order to understand more about this, Express Drives recently had an interaction with Sachin Chopra, CEO and Founder, AlphaVector. Here are the key takeaways from the interaction.
Express Drives – Please elaborate a bit on Current bicycle sales and March target?
Sachin – We are selling about 15-20k cycles per month, compared to 4k cycles per month pre-covid. The surge in demand has majorly been witnessed in the adult segment with the sale of hybrids, mountain bikes (MTBs) and e-bikes. We are pleased with the response and believe that the bicycling culture is starting to take hold in India. It’s good for everybody – fitness, environment, lifestyle. We are expecting the mid-range segment to pick up further steam in 2021 as cycling becomes more mainstream in India. The projections estimate the sale of 25-30k units per month by March 2021 across our website, marketplaces and 750+ offline retailers in 350+ cities.
What is the target for FY21?
We are working our way towards a target of 300CR ARR (annual revenue rate) by the end of March 2021. The focus is on customer experience and ramping up supply. We are also expecting strong growth for our e-bicycle – Meraki and for our aluminium range of bicycles. As the bicycling culture takes hold, the Indian consumer is beginning to appreciate high-quality, light-weight offerings. We expect aluminium bicycles to become 15% of overall bicycle sales from current less than 1% over the next 5 years.
How will you compare the Online vs offline sales trends?
As a brand, we put immense focus on customer-centricity and innovation. We work towards creating a personalized experience for our customers throughout the discovery, buying and ownership phase. Hence, we built a unique omnichannel business model that combines D2C (direct-to-consumer) innovations with a resilient countrywide offline network. We are creating a delightful customer journey where none has existed so far. It makes the company scalable like none other. Every online purchase is mapped to a dealer offline through the 91CARES program ensuring the customer has the satisfaction of guaranteed assembly/service and a delightful riding experience during the lifetime of owning the bike. By March 2021, we are positive that the numbers will increase to 25-30% online and rest offline.
What are your thoughts on the E-Bicycle market? Also, if you can shed light on some upcoming launches?
As per a recent report by MarketsandMarkets, the global e-bike market size is projected to grow to USD 70.0 billion by 2027 from USD 41.1 billion in 2020, at a CAGR of 7.9%. In India, currently, the e-bicycle segment accounts for less than 1 percent of the total bicycle market. So, the opportunity and potential are huge. As a value proposition, it is very attractive for the Indian market – It’s affordable, it’s good for the environment and it reduces about a quarter ton of Co2 every year. Moreover, you do not need a license to ride an e-bicycle. We believe that innovation and customer-centricity will be game-changers in this segment and the growth will be exponential rather than linear.
We have seen a growing consumer class in tier-1 and tier-2 cities with a greater disposable income who are looking to buy their first e-bicycles in India. Hence, our e-bicycle offering, Meraki, the Greek word for putting a lot of passion into something, is made for India. It caters to the demand in Millennials and Gen-Z for something aspirational and stylish apart from being performance heavy when they venture outdoors, at an affordable price point.
In the future, we will continue to introduce offerings that achieve 100% product-market fit in India like the Meraki and manufacture completely in India. We also plan to ramp up supplies for Meraki and scale up its retail presence.
What are the sales numbers per month looking like at present?
We are selling about 15-20k cycles per month. For Meraki, we are selling about 500 units per month.
What are your thoughts on the premium cycle market and partnership with KTM?
As per our data, about 75% of the demand for the premium segment will come in from cities like Delhi, Mumbai, Bangalore, Chennai, Pune, Hyderabad. Our answer to this growing demand and the business opportunity is bringing KTM bicycles to India. With this partnership, we become the exclusive distributor of KTM bicycles in the Indian market. This is in line with our vision to introduce millennials and Gen-Z to an active lifestyle, encouraging them to reclaim the outdoors. We aim to not just deliver unmatched quality and performance but also an exceptional buying and ownership experience. With this tremendous addition to our portfolio, we are looking to cater to the small market size of performance bikes in India, which is roughly about $100 Mn out of the total $4 Bn bicycle market.
Please elaborate a bit on Brand Ninety One and vision?
Brand ‘Ninety One’ is inspired by India’s rich history and embodies its action-oriented and constantly evolving spirit. The reason we chose the number Ninety One (91) to represent us is that it holds a special significance for our country and hence, symbolizes our “Made in India and made for the world’ spirit. It represents our gateway to the world as our country code and the inflection point (1991) that unshackled our economic growth. Embodying India’s modern, young, fit, action-oriented and evolving spirit, Ninety One inspires you to break free from a sedentary and digital way of life to reclaim the outdoors, reconnecting with nature and community.
We want to become a symbol of positive change in the lives of Indians and hence, our vision is to introduce millennials and Gen-Z to an active lifestyle, encouraging them to reclaim the outdoors. We are not selling bicycles but an extraordinary experience.
What is Omnichannel Model and D2C Innovation?
Our omnichannel model is a unique value proposition and makes us scalable like none other. It combines D2C (direct-to-consumer) innovations with a resilient countrywide offline network. Post-Covid, digital has become the first port of call for brand discovery, product experience and features study. We have crafted an intuitive, secure and high-performance web and mobile experience to engage directly and retain our target audience. Features include – easy navigation with 3 click payment option, intuitive compare options classified by types & categories, high-quality product experience collateral like 360-degree views, product videos and unboxing videos.
We understand that once we dispatch the product, customers would not want to go to a store to get it assembled if they purchased it online. Hence, every online purchase is mapped to a dealer offline through our 91CARES program – the largest doorstep services program in the country. It ensures that the customer has the satisfaction of guaranteed assembly/service and a delightful riding experience during the lifetime of owning the bike. We are focused on making every bike ride better than the last and pedal the extra mile for each of our riders
What are the targets for 2021?
We are targeting 600 CR ARR by March 2022. We are looking at expanding retail presence to 1500 retail stores and venture into accessories like helmets, shoes, apparel, bags and active lifestyle products.
What is the percentage of localisation in present models?
Meraki is 100% indigenously designed and engineered in India by our in-house team of 15 designers with a combined experience of more than 300 years. It’s a world-class product designed, honed and developed by a passionate team over the last 15 months. In terms of sourcing, about 75% of material is localized and the rest 25% is imported to bring to our consumers world-class components from across the globe. Our focus is on maximizing localization as much as possible by setting up our own factory.