Hero Cycles opens six stores in Chennai

Pankaj M Munjal, Chairman of Hero Motors Company tells us, “The Hero Sprint stores are aimed at transforming the way in which cycles are sold across the country. There are about 250 stores in India and the novelty we are providing are the Lectro e-bikes. We want to bring down transportation costs and make the running cost 1/100th – at 7 paise per km versus Rs 7 per km, which is the case with a motorbike. We have provided these to about 10-20 dealers and the response has been encouraging. The product is priced at about Rs 27,000. We are also looking at a long-term rental mode for the e-bike variant on a pilot basis.”

The tie-up with a city-based bicycle retail major Just Buy Cycle (JBC) which is a strategic partner to Hero Cycles will help the company expand its footprint in the city. Munjal says, “The rule of thumb for such associations is that 70 per cent of the product mix in the outlet should be Hero Cycles. Chennai being a unique market, has a certain loyalty to south Indian cycle brands. Decision making here follows the heart, head and then the wallet. Our market share pan India is 34 to 35 per cent, while in North India, it’s about 40 per cent. We are not at the numero uno position in South India, but it’s only a matter of time before we get there. We want to touch 400 stores by the end of this fiscal.”

Chennai, Bengaluru and cities in Kerala have been trendsetter in terms of purchase of high end bikes. The trends would come from Europe to South India and then percolate to West and North India. “Right now, everyone wants to push the selling price high and the gross margins higher, we end up doing it by selling more in South,” he adds.  The company is also keen on strengthening its omnichannel presence as it’s working with an English company. The brand will shift half of its bike catalogue to the online space. It is also acquiring a company in Germany (for the frame technology) which has been in the business of e-bikes for the past five years. The acquisition is set to be completed by this quarter. The company also has a tie up with Yamaha for the motor technology for these e-bikes.