In India, two-wheelers are still a need than a lifestyle product for the majority of the population. This can be attributed to the fact that more than 85 per cent of sales of two-wheelers still come from the sub-125cc segment. Moreover, with the ever-increasing prices of new two-wheelers due to the advancement in technology, used-two wheelers are becoming a popular choice.
Talking about the pre-owned two-wheeler industry, the companies are now becoming more developed & tech-oriented to serve their new-age customers and Bike Bazaar can be termed as a pioneer in this space. WheelsEMI Private Limited is one of India’s leading two-wheeler financing companies. Recently, the company underwent a branding exercise and made its entry in the used two-wheeler marketplace with its new brand name ‘Bike Bazaar’.
Bike Bazaar’s vision is to be the largest two-wheeler lifecycle management company in India. In addition to offering to finance new and used two-wheelers, Bike Bazaar also aims to become a transparent marketplace for pre-owned two-wheelers while offering value across the entire ownership-ridership cycle. To know more about the business, we speak to Srinivas Kantheti, Co-Founder & MD, Bike Bazaar.
K Srinivas, along with V Karunakaran (Co-Founder & Jt. MD – Bike Bazaar), founded the company in the year 2017. Both these industry veterans have more than three decades of experience in the Indian automotive industry with specialisation in the auto-finance sector. Speaking to K Srinivas about how Bike Bazaar became a reality, he said, “Second-hand cars are an important part of the car industry but nobody talks about used two-wheelers. As per our estimate, there are around 28 crore two-wheelers on Indian roads and so the thought process behind Bike Bazaar is to become a part & parcel of this industry in terms of buying & selling used two-wheelers, financing new & pre-owned two-wheelers, refurbishing them, and much more than that.”
Speaking out the brand transition from WheelsEMI to Bike Bazaar, Mr. Kantheti says that the transition happened because WheelsEMI was a finance-oriented name but the company was actually doing much more than that. They were looking at the entire lifecycle of a two-wheeler from financing to sales to servicing and hence, the company changed its name from WheelsEMI to Bike Bazaar. They believe that Bike Bazaar is a much more powerful customer-facing brand. However, the name of the parent company remains unchanged and it’s WheelsEMI Pvt. Ltd.
Talking about USPs of Bike Bazaar, K Srinivas roughly divided the market into two geographical segments: big metro cities and tier-2, tier-3 cities & small towns. To give more insights about the major urban markets, he said, “A large number of unorganised retail outlets are already present in the big cities. They know how to do business and they have been doing it for a long time. We do not want to go and start fighting with them to do business. Instead, we want to become a part & parcel of their business and we can add value to them through only financing.”
Moreover, he adds that if Bike Bazaar is financing a bike, the customer should be relaxed about its quality as the company thoroughly checks a bike using various technologies before financing. The company has a tie-up with around 700 unorganised retail outlets in twelve metro cities for financing and re-financing purposes. Bike Bazaar is also getting the franchises to open the Bike Bazaar-branded showrooms to deal in used two-wheelers and also finance them.
The company aims to focus on two-wheeler lifecycle services and grow its pan-India presence & dealer distribution network. Moreover, Mr. K Srinivas added that Bike Bazaar aims to onboard 1 million customers and grow their loan book to Rs 3,000 crore by FY2024. Speaking about the industry trends, he said that while the pre-owned car market is flourishing at a rapid pace, in the two-wheeler market, less than 50 used two-wheelers are sold for 100 new ones and there are reasons for this. Both the buyer as well as the seller feels cheated and so this industry needs to be created. The company is trying to build the used two-wheeler marketplace brick by brick by expanding to new smaller towns and cities and in this way, they aim to onboard more customers.
Bike Bazaar is rapidly increasing its presence in tier 2, tier 3 cities, and rural areas to formalize the used two-wheeler buying experience in small towns. Mr. K Srinivas says that “rural is our strength”. He adds, “We understand the rural industry very well and one of our other products is financing rural vehicles to customers who don’t have a bank account and 70 per cent of our finance business actually comes from such customers.” He also says that they are betting big on rural markets as it’s going to flourish in the future and Bike Bazaar has a unique way of doing business.
Sharing insights about Bike Bazaar’s core philosophy i.e. Impact Funding, Mr. Srinivas added, “The two-wheeler makes the maximum impact in a person’s life. I feel it’s unfortunate that banks do not recognise this as priority sector lending, they should recognise this.” He adds that it’s an impact business as it’s making an impact in society. Touching upon the topic of the financing of electric two-wheelers, K Srinivas says that there is a big question mark who will finance the electric two-wheelers, especially the ones for last-mile mobility solutions, as the banks and online aggregators won’t be doing it. He highlights three issues with the financing of EVs, the major one being the battery doesn’t work properly after 18-20 months.
That’s because most of the delivery boys have to cover around 100-120 km a day on their two-wheeler and in 18-20 months, the battery of the electric scooters might not work properly. Mr. Srinivas says that they are working on these issues and they will be financing electric two-wheelers. In fact, Bike Bazaar currently finances around 250-300 electric two-wheelers a month. With the launch of new marketing models in near future, the industry will need a financier with good expertise in financing businesses like Bike Bazaar and he says that they aim to work collectively with OEMs, delivery companies, etc. They also aim to create a second-hand electric two-wheeler marketplace that doesn’t exist today.
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Speaking about the impact of Covid-19 on Bike Bazaar, Mr. Srinivas said, “The first wave was much tougher to handle than the second wave. We saw volume drops in April and May but from June onwards the sales started picking up very well in North India. Even collections that fell drastically in the first wave, didn’t fall so drastically in the second wave and recovered also very fast.” He also added that the slowdown in sales happened after August but as a financier, they have done extremely well. Uttar Pradesh, Bihar, Haryana, Rajasthan, and Madhya Pradesh is one of the most important territories for Bike Bazaar.
Bike Bazaar has raised Rs. 230 crores in series A & B funding and is now planning to raise Rs. 250 crores through C-series funding by end of the year. Commenting on the same, Mr. Srinivas said, “The money we are raising today is meant for getting our marketplace up and running partly. Most of the money will still go to our finance business.” About C-series funding, he said, “We are in the midst of having term sheets in our hand and hopefully by January we will have the money in the bank.” He also added that after 1 or 1.5 years, they plan to go back into the market again to raise additional capital mainly for electric mobility.
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