Despite operating in the niche market of selling imported bicycles, Firefox Bikes looks to own this space by ramping up its product range and reaching out to prospective buyers, young and old alike
Shiv Inder Singh might be 63-years-old, but at heart, he’s a young man with a zest for life that’s infectious. His ambition is to shake India’s young from their lazy video-game induced stupor, get them on bicycles and show them the joy of riding, out in the open. He’s also very sure that bicycles is a very relevant space to be in, for which parent doesn’t want their child to go out and be physically active? “If you look at urban areas today, children hardly have the space to go out and play. With a bicycle, the roads are theirs to ride on and get some air and exercise,” says an enthusiastic Singh. As for the adults, cycling clubs have renewed interest in different urban pockets.
In 2004, Singh established Firefox Bikes Pvt. Ltd. (Firefox) to introduce India to premium bicycles that were imported. He had no experience in the two-wheeler segment when he decided to become an entrepreneur. A civil engineer from Indian Institute of Technology, New Delhi and a post graduate from Indian Institute of Foreign Trade, New Delhi, he spent his early years in the garment export sector in countries like Taiwan, Korea, Hong Kong, Philippines and India. He entered the bicycle market with 36 models which has grown well.
Since we last spoke to Singh (August 2012), Firefox has added 35 outlets across India and this takes its current tally to 130 outlets. It has also expanded its product range to 70 bicycle models. Singh makes a mention of additions in the Trek range, “Previously, we had only one model of Madone and Domane (high-end road bikes), now we have three.” Additionally, the company has tied-up with strategic partners for accessories, namely U.S.-based Kryptonite for locks and Taiwan-based Super B for tools.
“The biggest challenges would be high duties on import, devaluing currency and a lack of infrastructure for cycling.”
Today, he wants to own this space with an extensive product range, strategic pricing and higher dealer margins.
Singh takes pride in the fact that Firefox presents a complete range that a biker can choose from. Interestingly, with its existing tie-up with MTV India (Firefox currently retails two off-road bicycle models under this range), it has successfully co-branded where other Indian bicycle manufacturers have failed. While the company will continue to make additions to its product range to appease adults, it is also looking to tap the interest of children through a tie-up with Warner Brothers. “We will introduce seven bicycle models for children in the age bracket of three to 12 years,” says Singh. Firefox plans to launch this co-branded range by the end of this calendar year. By introducing children to quality bicycles in their formative years, Singh is confident that their interest in cycling as a sport can be sustained as they grow older, making them buyers of the future.
To reach out to children, the company works closely with schools across India’s metropolitan cities. In fact, a part of its marketing budget is spent on below-the-line activities that promote its product range. “We spend up to 5 per cent of our annual sales on marketing initiatives and a majority of this budget is spent on advertising in the print media,” says Singh while adding that sports, cars and lifestyle magazines are the preferred choice along with newspaper supplements. Social media has also played a crucial role in building a customer-base for Firefox and this is an area where the company will continue to involve itself in a proactive manner.
Out of control
Firefox operates in a super-niche market and faces its own set of challenges. And as Singh points out, the factors that are most challenging are external and not within the company’s control. “The biggest challenges would be high duties on import, devaluing currency and a lack of infrastructure for cycling,” he says.
Despite the challenges, the company has increased its revenue, year-on-year. Commenting on his outlook for FY’14, Singh says he expects the revenue figure to be 45 per cent higher than the previous fiscal. By 2015, Singh expects the number of outlets to touch 200, with all the new outlets being franchised. “We are not a retail distribution company,” clarifies Singh. In fact, he says the first few self-owned company outlets were established to show franchises the look and feel of a space that sells premium bicycles as Singh felt no parallel existed. As for funding this phase of expansion, Singh says the company will look to internal accruals. “We are profitable and see no current need to bring on board external investors,” he adds.
In the coming years, Singh is excited about more people taking to cycling as a hobby or a sport, thereby opening up avenues for Firefox. Through its short journey, so far, the company and its founder have proven one thing, bicycles are going places.
|Team strength: 57||Team strength: 65|
|No. of outlets: 95||No. of outlets: 130|
|No. of bicycle models: 58||No. of bicycle models: 70|
Startup School with Shiv Inder Singh, founder-CEO, Firefox Bikes
Whenever you establish a business at whatever age, there are always risks to be run. A systematic approach lessens that risk, says Shiv Inder Singh.
Age no bar
Daring to dream of owning a business at any age: Shiv Inder Singh established Firefox at the age of 54, when most others would think of hanging up their boots
Be in a position to get a clean exit from any other professional commitments you’re involved in before taking on a venture, especially if you’re starting post-retirement or post managing other businesses
Have your checks and balances in place, it helps reduce the risk of any business
Don’t listen to what others say. People told Singh he was ‘mad’, ‘crazy’ and that his idea would never work – he backed himself and that’s all that mattered.
Justify your price
In a nutshell, your pricing must be justified based on what you’re offering and not just based on the margins you make. At Firefox, the cost of importing bicycles (import duty, freight costs) dictated the pricing and that is something the customers can understand and thereby value.
Respect the distribution system and don’t overwork it by reducing dealer margins. In the bicycle industry, MRPs aren’t strictly adhered to and this allows dealers to charge as they please. By offering the dealer a much higher margin, Firefox was able to lessen the sales burden and this in turn built customer trust on standard pricing.
Let your pricing be transparent. Firefox lists all its prices on its website.
Find the right franchisee
Firefox’s challenge was to build a completely new distribution channel of company owned outlets and dealers, who would conform to its standards in display and in technical/sales support. Initially, Singh considered opening all self-owned outlets but opted for the franchise route to speed up the expansion. As a company, it has evolved its own process of finding a suitable franchise. Here’s the mandate it follows:
The franchisee should have suitable space for a FireFox Bike Statio of 500 square feet or more. The location should be acceptable for such an outlet.
The external and internal branding is done by the company.
The renovation design will be provided by our architect and the cost of renovation will be borne by the franchisee.
The initial order should be for approximately 50-60 bikes. This is what a Tata 407 or LPT (transport vehicles) can take.
Firefox does not extend credit. The bikes are paid for before dispatch.
We offer a retail margin of 24 per cent on MRP ( excluding taxes) and 20 per cent for sub-franchisee/shop-in-shop.
Firefox provides area (location) exclusivity to franchisees to eliminate unhealthy competition.
Be social, it works!
Advertising and interacting with potential customers on social media is now almost a norm for product companies. Firefox really worked this space with regards to being an active part of cycling clubs online and promoting its own Facebook page.