Time demands: a new strategy all together

By:

O P Munjal

"The time is now for industry to innovate itself, bring new products, look for newer outlets and distribution channels and create & sustain the consumer attention through ground activities supported by blitz of advertisement and publicity."

"The Chinese firms are forcing pace of quality and technology as well as price. We are not. That is where the real challenge is and that is one of the reasons of their shinning success."

"The need at the moment is a strong consolidated vendor base. I can also see that to fend of the competition from China the cost cutting in all products and services is absolutely must."

"However, there is no cause of alarm. My firm belief is that the market will stabilize and will be back to the growth path at an accelerated rate. But the industry as it has to work hard and work had to change."

The Global Bicycle making business is changing beyond recognition in the past couple of years so has been changes in the domestic market.

Let me first share with you the post budget bicycle scenario and then the global market.

The budget proposal by the Finance Minister Yashwant Sinha brought the bicycle and bicycle parts under the ambit of Excise Duty. However, the bicycle parts were later on exempted. This coupled with some other socio-economic factors have, to some extent, destabilised the bicycle market.

The last year has been a difficult year; otherwise also for Indian bicycle industry. The industrial growth is hovering around 2%. Many industries including bicycle industry, were under the pressure of growth.

Hero Cycles Ltd.

The durable consumer goods barring exception of motorcycles, generally could not sustain its growth rate. In fact, the most surprising part was that the fast moving consumer goods (FMCG) also declined. This particular segment of industry because of deep pocket of the large players have generally been in a position to stimulate the market demand through innovative approaches. However, it appears that this year they had a shrinking market and resulting in greater pressure on their bottom line even to MNCs.

In such a difficult scenario some pressure on bicycle industry was inevitable. However, as mentioned earlier, the excise duty and entrance of many new players including some local manufacturing units, have confused the retail outlets. Retail being a very important link in the bicycle supply chain management it appears that the industry will take some time before readjusting itself to new realities.