With ‘green’ gaining ground across the world, all things eco-friendly are being adopted by concerned citizens – be it technology, lifestyle or even modes of transport. Hence, the rise in the use of hybrid cars and electric two-wheelers. Keeping this in mind, ‘Hero Electric’ was launched in India. The brand, developed by UK-based electric vehicles solutions company Ultra Motor Company (UMC) in technical collaboration with bicycle manufacturer Hero Cycles Ltd (HCL), has adopted a different promotional route. The company plans to first drive in the concept according to the different target audiences and price points of the seven models.
In September 2006, UMC and HCL had signed a technical collaboration and joint marketing agreement to produce and jointly market the new range of electric two-wheelers in India. Hero Electric was launched in January 2007, which was followed by awareness campaigns. By April, the bikes were visible on the roads in Delhi NCR, Punjab, Haryana, Rajasthan, west Uttar Pradesh and Gujarat. About seven to eight showrooms were being added every month.
By mid-September, the company aims to have 50 exclusive showrooms across North and West India. This would be followed by the opening of showrooms in the southern region in October, followed by presence in the East by January 2008. The company is confident of having 120 showrooms across the country by 2007-08.
According to Deba Ghoshal, Director-Marketing, UMC, “We have two main sets of target audience. The first are the teens who want to leave behind their bicycles and upgrade to a bike before they attain their legal riding age. The other segment is the age group of 24+. They could be riding a petrol scooter or a moped and are looking at economy and utility.”
Ghoshal further explained that with three million bicycles being sold annually in India, and the biggest player in scooter segment, Bajaj, having left the market a few years ago, there was a fair chance for Hero Electric to score well in the evolving market. The company sees a scope of converting at least 10 per cent of the two-wheeler riders, which is estimated to have a size of 4 million units annually, with bicycles having a share of 3 million units.
Although it is a new category in India, electric bikes are likely to witness an exponential growth. According to a report by ACNeilsen, the category potential of electric vehicles for 2007-08 is two lakh units and is projected to grow to 4.9 lakh units in 2008-09.
While it was found that people are willing to pay a minimum of Rs 12,000 for the electric two-wheelers, the company’s lowest price point is Rs 14,000. The company currently has four variants of the electric two wheelers – E-bike, E-bike Plus, E-scooter and E-scooter Plus – which differ on speed and price points. All the seven models of the electric two-wheelers are branded as ‘Hero Electric’ with the ‘Ultra Powered’ technology tag.
Ghoshal said, “We spent nine months on backend work and intend to convert 25 per cent of the potential consumers. More players are likely to be in the market. Electrotherm’s YOBykes entered the market 15 months prior to us, but they are primarily seen only in western India. But it would act as a complementary in the category creation. However, although there are many regional players, about 15-16 of them, they cannot afford to lower the price because our volumes are huge.”
The company is seeding the concept right now, and is hence not concentrating on widened distribution. It is currently occupied with creating experience for the consumer, and is focussing on retail, BTL, experiential marketing, and dealer education. Mall shows, school contact programmes along with partnered dealers, and dealer demonstrations form a part of the activities for pushing in the concept. Additionally, newspapers helped launch the brand in the initial phase, while a TVC has been planned, which will be rolled out around Diwali, since there would be better penetration of the Hero Electric by then.
“We are first targeting the retailers for category creation, which will be followed by media buzz for specific communication. Although we would heavily rely on the Internet and kids channels too for promotions, we however don’t want to be classified as a brand for females or for kids alone. Also, we believe that there is a huge potential in companies with large industrial complexes, courier companies and delivery companies, which would help them in keeping their running costs low and improve margins,” added Ghoshal.