'Growing bottomlines by slimming waistlines' seems to be the strategy of the Murugappa Group's TI Cycles, a division of the Rs1,584-crore Tube Investments of India Ltd.
Chennai: After popularising its bicycles all over the country, TI Cycles, a division of Tube Investments of India Limited (FY 2006 gross sales turnovers; Rs1,584 crore), now plans to replicate its success story in its fitness equipment segment.
The country's second-largest bicycle manufacturer recently announced its arrival in the fitness equipment segment with the launch of four products - exerciser cycles, recumbent bikes, elliptical trainer, motorised treadmills and the home gyms under the brand BSA Workouts.
Explaining the rationale for TI Cycles pedalling into this segment, G Ramprasad, president, TI Cycles says, "The changing lifestyle in urban India and higher stress levels have resulted in an increasing trend towards personal fitness. This has resulted in the proliferation of neighborhood gyms, jogging parks and home gyms. Even cycling in urban India is moving towards fitness, as it is one of the best forms of cardio vascular exercises. We see fitness equipment business as an extension to bicycles, a natural progression and a good business opportunity."
A commerce graduate from Madras University and an MBA from the Indian Institute of Management, Kolkata, Ramprasad has been entrusted with several critical assignments at the Murugappa group.
As the executive director of EID Parry India Ltd and the CEO of Parryware division, Ramprasad contributed significantly to the transformation of the unit from an inward focussed to market / consumer-oriented one. He also held the position of chairman, Indian Council of Sanitaryware Manufacturers.
Prior to his current assignment, he had handled sales and marketing at various consumer goods companies such as Funskool India Ltd, Hindustan Lever Ltd and Sara Lee (in India).
As with consumer durables, today fitness equipment like treadmills and recumbent bikes have begun to make their way in to many Indian homes. Importing the fitness equipments from Taiwan, TI Cycles retails them through its exclusive retail outlets BSA Go. In addition the division is leveraging the internet to market its fitness equipment.
Ramprasad has plans to grow the division's top and bottomlines while helping the users of BSA Workout fitness equipment shed their waistlines. In qan interview with domain-b, He talks about TI Cycles' new business and growth plans. Excerpts:
Don't you think that you are a late entrant to this segment?
We are entering in this business at an appropriate time and in an organised fashion. The company is aiming at a 20-per cent market share of the Rs300-crore fast growing home segment by the end of 2009- 2010.
What is the market size for the fitness equipments in India?
According to reports, the fitness equipment market comprising the individual home and small residential complex segments is estimated at over Rs300 crore. Products like treadmills, ellipticals, recumbent bikes and home gyms contribute to over 60 per cent of this segment.
The personal user segment is estimated at Rs130 crore; small residential complexes and companies at Rs170 crore and; the large gym and big corporate segments at Rs200 crore. A large number of importers and small players compete for a share of this market.
On which of these segments will TI Cycles be concentrating first individuals / institutions?
The market for fitness equipment constitutes gyms, corporate and home users. We will initially focus on the individual / home, residential complex and small corporate segments.
Why these segments?
Gyms and corporates have the necessary expertise and are aware of the right equipment, while there are gaps in the home market segment.
The gaps include understanding the right fitness techniques, the appropriate equipment, equipment usage, guidance on training and the ability to monitor the fitness plan.
We believe our strength lies in understanding the consumer's need and matching our ability to deliver quality products along with being able to provide customer care. Having been in the bicycles business over the years would help us in providing a differentiated offering in this segment. Therefore, our positioning in this segment would be "the ideal fitness partner" to the consumer.
What is your promotion budget for the gym equipment?
We are making a substantial investment in understanding consumer needs, product identification, branding, retail stores and customer care.
Price wise how do your products compare with that of imported ones or those of other domestic players?
The market currently has a wide range of products with varying specifications. Priced competitively, the BSA Workout range has models across varying price points to meet the different customer requirements.
How do you leverage the internet for the fitness equipment division?
The target consumer segment for this business is net savvy and is known to use the internet to seek information on various products / services. The net also allows reaching out to the consumers and providing them the requisite guidance and understanding of 'how to remain fit?'
Hence keeping in mind the audience and needs of the segment, Internet is seen by us as an ideal medium to provide efficient customer care. We have created a special site for fitness portal www.ticyclesindia.com\bsaworkouts targetted at the 30-year plus family-oriented mid to senior-level executive who is keen on fitness.
The site provides basic information on fitness and simple tips for remaining fit. The portal allows the user to take a `fitness quotient' - a test to evaluate the overall fitness of a person using a wide set of physical, cardio and lifestyle parameters.
It also provides a set of fitness solution that includes the right equipment for the individual need, nutrition, dietary and dressing tips. The portal also enables our customers to register the equipment online for service and download user manuals. And also remain in touch with our fitness consultants through queries.
What is your distribution network for the fitness equipment?
Currently our fitness equipment range will be distributed through our exclusive retail outlets BSA Go. We have seven stores across the country and are targeting another 20 stores in next six months. These stores will also sell bicycles. The equipment would be launched in phases and be available across the top 20 cities in the country by Mar 2007.
What is your strategy here in the rapidly growing children's cycle segment?
The segment is certainly growing very well. We have launched a lot of models - with an emphasis on safety, unique features, colours, appearance and ease of riding under the BSA brand.
The overall cycles market is estimated at around 12-million per annum and is valued at around Rs1,700 crore. Of this, standard bicycles constitute around 60 per cent, specials around 30 per cent and the children' segment around 10 per cent.
We are the market leader in the specials category with 50-per cent market share and a 20- percent share in the standards segment. Our total cycle production capacity is 52 lakh and the capacity utilisation is 50 per cent.
What is the target for your division as a whole this fiscal?
The planned turnover for the whole division is Rs500 crore this fiscal. Last year we did a turnover of Rs466 crore.