Karnataka based Toutche Electric aims to have over 200 dealers in place by the time it launches its connected e-bikes in 2022. Raghu Kerakatty, CEO speaks on the road ahead in an email interview.
How has the journey been for Toutche since its inception?
The key purpose driving Toutche is to solve the burgeoning problem of traffic which has taken a toll on air quality and people’s lifestyle.
We launched our Heileo range of e-bicycles in 2019 and the response has been terrific and extremely promising. Covid-19 hit us just when the numbers were seeing the first upward bend but the phase from June to November 2020 was extremely encouraging. We exhausted our first stock sooner than expected and witnessed a steep rise in demand for electric cycles.
This actually multiplied post-Covid both in India and globally. It choked supply chains across geographies and stretched lead times which caused stock issues across brands and markets. However, this phase gave us an opportunity to push the pace on technology and design innovation as well as strengthen our supply chain strategy. We believe we are now well placed to address the surging market demand.
Do tell us more about your plans for connected e-bicycles which will be launched next year.
Our focus is to build and offer technology-led connected e-bicycles and the first version will debut in FY22. They will transform the riding experience, offer personalisation and most importantly improve rider safety.
These are the areas you will find us investing in to bring out products that will not only challenge the status-quo but set new standards for the industry. In addition, we are building some cutting edge, innovative accessories that will take the riding experience to a wholly new level.
Our primary focus will be on building a strong, user service-oriented connected platform that delivers convenience, enhanced experience and improved rider safety. The outcome is a relatively higher cost of e-bicycles which will initially draw 10 percent of buyers.
What new markets are you planning to enter?
We have a presence in the UK as a company and will be launching the brand there in early 2022. In Europe, Australia and the Middle East, we will operate through our channel partners primarily without our own presence. Later in 2022, we aim to expand into the US and Canada. Given some of these are large established markets, we are not targeting market share metrics initially but building customer success stories which over a medium term will take care of market share by itself.
What is your take on the size and demand of India’s electric bicycle market?
There is no validated data on the market size for electric bicycles in the country though our estimates show that the monthly volume at this point is around 3,000-3,500 units. Our share is around 3-4 percent and the target audience is the smart, environment and health-conscious individual who likes to adopt an active lifestyle for commuting.
The European market for e-bicycles has a clear user-specific segmentation and was $8.01 billion in 202. India is comparatively nascent but set to grow at a faster pace. Most of the demand is coming from Mumbai, NCR, Chennai, Kolkata, Bengaluru, Hyderabad and Pune. Over the next two years, we expect this to spread in Tier 2 and Tier 3 cities.
Do you see the digital space playing a big role in retail?
We have an omni-channel strategy that combines both digital and retail channels for our sales. So far 65 percent of our sales come from digital channels and we expect this to increase over the next 12-24 months as we scale up for network
How are your localisation efforts coming along?
India will be our hub for both bicycles and technology. We are primarily focused on making our drivetrain (battery, controller) takes up nearly 40 percent of the cost. We also source some other parts and our localisation level is around 45 percent at this point of time.
What then are the parts being imported?
Technology is our key differentiator, and our connected platform will be the primary value point for consumers going forward. We have designed the complete drive transmission and battery (including the on-board electronics in-house). Barring the li-ion cells, every other part is made in India.
Could you throw some light on your expansion plans?
Our facility can make up to 10,000 e-bicycles annually and we will soon move into a larger one that will enhance output to 24,000 units and even further to 40,000 units per annum.