Electric push for bicycles

By: |
August 16, 2021 6:49 AM

A range of e-bicycles have hit the market, as premium bicycles see increased uptake during the pandemic

As per a CRISIL Ratings report, India’s bicycle market is estimated to register a 20% growth in demand this fiscal, with sales likely to touch 1.45 crore units, compared to 1.2 crore units in FY21As per a CRISIL Ratings report, India’s bicycle market is estimated to register a 20% growth in demand this fiscal, with sales likely to touch 1.45 crore units, compared to 1.2 crore units in FY21

The ubiquitous bicycle is getting a facelift. Brands are introducing electric variations of bicycles to cash in on the high demand for premium bicycles. Hero Cycles restaged the launch of the Lectro range of e-bicycles (first launched in 2017) in July 2020, and Avon Cycles introduced its range of e-bicycles in March 2021. A few other brands like Firefox, Nexzu Mobility, and Meraki are also operating in this niche sub-segment of premium bicycles.

The timing seems apt, say analysts, as the pandemic has given a fillip to India’s bicycle industry, which is overall worth Rs 7,000 crore. Restrictions on fitness-related activities and increasing concerns over health and wellness matters are driving sales this year. As per a CRISIL Ratings report, India’s bicycle market is estimated to register a 20% growth in demand this fiscal, with sales likely to touch 1.45 crore units, compared to 1.2 crore units in FY21.

Excluding e-bicycles, the premium segment of the market is valued at about Rs 2,000-2,200 crore in the domestic organised market.

Geared up

E-bicycle makers are targeting a broad spectrum of consumers — from those looking for daily commute solutions and joy rides, to people who want a cheaper alternative to electric scooters for short commutes.

Aditya Munjal, CEO, Hero Lectro E-Cycles, says the company’s focus is to “solve short distance mobility needs, less than 20 km per day, of our target customers in the 18-44 age group.”

When it was first launched, Lectro E-Cycles had bicycles in the Rs 40,000-80,000 price range. In 2020, it was brought under the Hero umbrella, to leverage the strength of the parent brand, and rebranded. Hero Lectro E-Cycles are currently sold in around 600 outlets, and through e-commerce channels in across 150 cities in the country.

Avon Cycles experimented with electric cycles in the moped format 10 years ago. The vehicle, priced at around Rs 15,000, did not take off as expected. Omkar Singh Pahwa, chairman and managing director, Avon Cycles, says people did not like the form factor of the vehicle, and were not open to pedalling on a vehicle that looked like a scooter. This year, Avon is focussing on its distribution in North India and expanding its presence in other markets.

Since Lectro’s and Avon’s first launches, the e-bicycle market in India has matured, and makers are now able to manufacture less expensive and more advanced vehicles. The entry price for Hero Lectro E-Cycles, today, starts from approximately Rs 25,000 and goes up to Rs 50,000; Avon’s electric bicycles cost about Rs 30,000.

Slow pick-up

The growth of the overall bicycle market can be attributed to the premium and kids segments. These two segments account for nearly 40% of the market, and are driven by fitness and leisure needs, and not personal mobility. E-bicycles that can cover about 20-30 km in a single charge could possibly comprise the personal mobility use cases.

Nitesh Jain, director, CRISIL Ratings, informs that a large chunk of the demand for e-bicycles is met mainly via imports. “While this segment has good growth prospects, developing cycle-friendly infrastructure, pricing of the models and localisation of components will play key roles in driving future growth,” he adds. Analysts expect that, in the long run, B2B sales for short commutes between public transport hubs and home/office could be a potential market for e-bicycles in India.

Rajeev Singh, partner and automotive leader, Deloitte India, points out that the onus will be on private players to create a model by which they can set up e-bicycle stands and charging points in cities, and develop a pay-per-use system. The government’s efforts to enable a cycling culture by building cycling lanes, and making regulations to reduce the number of three-wheelers that run on fossil fuels could further drive the adoption of e-bicycles for last-mile connectivity, say analysts.

Importing components like motors, sensors and lithium-ion batteries makes the cost of these cycles prohibitive. The average price point for premium cycles is in the Rs 10,000-12,000 range, while e-bicycles retail at upwards of Rs 25,000. “E-bicycle is a different product offering, and we would not generally see a bicycle customer opting for an e-bicycle,” says Jain.

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