Food caFe: Cycling is the new golf, says Arun Alagappan
Arun Alagappan, the president of TI Cycles (the Murugappa Group), insists that we meet for breakfast on a Sunday at Ciclo Cafe at Kotturpuram, an upmarket area in Chennai. The restaurant serves breakfast only on Sundays. Ciclo is Chennai’s first bicycle cafe promoted by the company. It’s decorated in bicycle parts such as chain chandeliers. The cafe showcases high-end brands such as Bianchi, Cannondale, Mongoose and Schwinn. “Cycles and cycling have to be fun,” says Alagappan.
It is the morning of Gran Fondo, a long-distance road bicycle race in which riders are individually chip-timed and have the right of way at all intersections. Sixty cyclists have done 100 km and 40 have completed 60 km. Many of them are stopping by to cool off. “In spite of our road conditions, many adults are taking to cycling,” says Alagappan. “Cycling is the new golf,” he adds.
TI Cycles was established by the Murugappa Group in 1949, in collaboration with Tube Investments, UK. The first Hercules bicycle (the first bike to be manufactured in India) rolled out in 1951 in Chennai. It was a pioneering venture. The company was the market leader until Hero entered the field. It has been a roller-coaster ride for TI Cycles ever since. It has gone through many ups and downs, and has not been able to regain its number one position.
The company has, however, emerged a strong number two, giving the market leader a run for its money. Last year, Hero Cycles manufactured 5.3 million bikes and TI Cycles 4.1 million. There is not much of a difference in their turnovers.
Alagappan is the fourth generation member of the Murugappa family. A management graduate from the Cardiff Business School, Wales, UK, he has over 16 years of work experience, having been put through the grind in HR, sales, marketing and general management within the group. Nine of those years have been in TI Cycles, starting from 2007. “At that time, bicycles were thought of as a sunset industry,” he says.
Having had fresh orange juice, we ask to be served breakfast. Alagappan orders eggs and toast. “This is what I have every day.”
I order mushrooms on toast on his recommendation. It turns out to be a good choice.
In 2007, the company had four categories of bicycles—roadsters, MTBs (mountain terrain bikes), SLR (super light road) and kids bikes. “I saw bicycles being sold in heaps. Retailing was getting professional, but not in the bicycle industry. I decided that we have to create a better atmosphere for selling.” TI Cycles had attempted setting up a cycle clinic in 2003. That ended up being a place where people brought bicycles for repairs.
The first TI Cycle retail showroom was set up in Siliguri in West Bengal. “There was an enthusiastic large distributor who was young and wanted to do something new. Then we worked up to Chennai, Bangalore and other major cities.
We did dealer training. Bicycles were not going to be treated as commodities.” Setting up retail showrooms has turned out to be a great success in most places. “We have retail outlets in 225 urban centres. All the major cities have been covered. These exclusive stores are a one-stop shop for bicycles and fitness equipment, with a customer-friendly ambience and service. We have increased our presence in tier-2 and tier-3 towns,” Alagappan says.
In 2012, rural retail outlets were launched. Now there are around 600 rural showrooms all over the country, with differentiated offerings. “We are able to sell bikes costing R8,000 in a place like Aranthangi in rural Tamil Nadu. There is more money power and aspiration in these areas than people realise.”
We drink cold water amidst a growing number of enthusiastic bikers on an increasingly hot morning, air-conditioning notwithstanding.
In his initial years, Alagappan set about consolidating several brands. He also tied up with various popular foreign brands. “We have been launching foreign bikes at Indian prices, like Hercules Roadeo. In 2011, we introduced Montra, which are affordable performance bikes. The newest range of Montra bicycles was designed specifically keeping the Indian consumer in mind. Most international companies design bicycles based on the average height and build of their demographic. Montra has applied this logic to the Indian market.”
“We have now launched bicycles which cost up to Rs 2 lakh. We created a new niche and sold eight bikes in the first month. Currently we average 1,500-1,600 bikes each month—these bikes cost more than Rs 15,000. Such bicycles are really like fashion products,” he says, as we are served hot coffee. “The 2016 range is out by 2017.”
TI Cycles has recently launched Ridley Bikes, which are high-end bicycles for road racing, and are one of the bikes ridden by Tour de France competitors. In fact, these bikes are not manufactured outside Belgium.
“They are great bikes, and the bike builder is a friend of mine. In fact, I told him that with his kind of costing you cannot enter India. We decided to make these for India at a reasonable cost, and price these bikes between R25,000 and R80,000.”
Then, the company also trades in very high-end brands such as Bianchi and Cannondale.
I ask Alagappan how he deals with legacy issues within the company, which has been run by his senior family members one time or the other. “It has been very interesting because I found I had a lot to do. I had to make this company contemporary. As one of the older companies in the group, I have had to cut through a lot of red tape and bureaucracy. I have had to simplify policies. I have brought the average age of employees considerably down.” He says that the younger employees are very good, but want to do things on their own terms. They want to enjoy what they are doing. “I let them work from home, give them flexible timing. I guess it has worked because competition hasn’t been able to lure them away. When you inherit a company, you have to survive and succeed by making it contemporary. What I don’t compromise is on quality, and the turnover has doubled since I took over.”
“Now I am very passionate about what I am doing. Bicycle industry is a sunrise industry. We are talking about green transportation. Bicycles are the greenest mode of transportation,” he says as we wade through the various bicycles on our way out.