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Toutche is expanding to India, EU and UK. DQ Channels interacted with Raghu Kerakatty, CEO, Toutche to understand the international markets in EU and UK for an Indian entrepreneur wanting to expand abroad. This is important information for the IT MSMEs.
What difference do you find in the business growth prospects of E-bikes in India, EU and UK?
Raghu – Our E-bikes journey in India started in 2018, when the market was still nascent compared to the EU and UK markets, which have existed for over 6-7 years now. The E-bike sales are estimated to reach 30 million in Europe by 2030, growing at a CAGR of 26% between 2021 and 2030. The Indian E-bike market in comparison is a much a smaller market currently. However, the growth prospect over the next 5-10 years is very promising. There is no official data on E-bikes sales in India, however our estimate suggests a sales volume of 75,000-80,000 units in 2021. The two-wheeler market in India currently is approximately 125 million per year, and we believe E-bikes will cannibalise the 2-wheeler market over the coming years, reaching a volume of 20 million+ by 2030.
What challenges do you face in India, EU and UK markets?
Raghu - The United Kingdom and EU markets have seen a massive surge in demand for E-bikes over the last four years. However, along with growing demand come challenges. EU and UK markets, required stringent certification requirements that are complex, time-consuming, and expensive. The E-bikes need to be built to the highest level of quality, as any returns and repairs due to defects can be expensive. The supply chain too, needs to be restructured due to the UK's separation from the EU, due to Brexit. Operating in the UK & EU as a brand, requires localised customer service functions (more so in EU) that add to the operational complexity.
India, being a relatively new market, needs more consumer awareness about E-bikes. This period hence requires effort to educate consumers. Retail and Dealer network can play a vital role during this period and going forward, to create consumer confidence and help brands establish a strong foundation. A more important point to note is the Indian market is now flooded with cheaper, lower quality imports that may create loss of consumer confidence and negative consumer perception about the product category. Consumer education on how to evaluate and choose the right product, hence becomes ever so critical.
How do you resolve these challenges?
Raghu - With regards to UK & EU quality requirements, our approach is to build strong processes that will be fundamental to building good quality E-bikes overall, for all markets. The certification requirements of any market are addressed specifically.
As per our plan, our focus is to launch our brand in the UK to start with, and slowly move to EU thereafter. Due to Brexit, it may not be possible to address EU from the UK from a supply chain standpoint.
With respect to EU, our plan clearly recognises it is not one market but requires a country specific approach. We are aiming to enter 1-2 countries by end of 2022.
With regards to India, our primary focus is a strong consumer awareness and education plan that is currently underway. It includes conducting webinars, active engagement on social media to help address consumer queries, introducing a rich blog section on our website amongst others. Our objective is to help consumers get themselves well acquainted and make the right choice for themselves. We are also strengthening our Dealer education programme (product and technical) to ensure better experience for customers pre and post purchase. The threat of cheaper products/imports is something every market encounters, specially in the early stages. With time and more awareness, this problem will get resolved in a phased manner.
How can Indian consumers be attracted towards buying E-vehicles, rather than fueled vehicles?
Raghu - Creating awareness amongst Indian consumers on the benefits of Electric Vehicles is the steppingstone towards EV adoption in the country. Brands need to focus their investment on consumer education over the next few years, as EV is a pioneering concept and will take time before it can scale effectively and penetrate the depths of the Indian market. The government has continued its support to the industry, and perhaps the only missing element is the exclusion of Electric Bicycles in the FAME II policy. Electric Bicycle will be a critical category within the Indian EV market, touching people across socio-economic classes within our population and definitely warrants to receive the applicable FAME II subsidies. Lastly and most importantly, Electric Vehicles due to their inherent advantage, should be better overall in functionality, design and deliver better experiences that the traditional fuelled vehicles. Brands need to focus on building good quality, well designed vehicles that can appeal to all age-groups, specially the millennials, who form 34% of India’s population.