One of the earliest memories Aditya Munjal has of Hero Cycles’ iconic plant off the Grand Trunk Road in Ludhiana is with his grandfather, the late O.P. Munjal. “My favourite pastime was to go to the factory and test-ride the bikes,” he recalls. He also accompanied his grandfather to bicycle markets, and that was probably when he was first exposed to the senior Munjal’s gregarious demeanour with which he met everyone from vendors to dealers.
After finishing his education, according to the Munjal tradition, Aditya did an apprenticeship as an understudy to his grandfather. “My routine was to shadow him for six months. From 9 to 11 in the morning, he used to spend 20 minutes in every department, from assembly floor to quality checks,” he says.
Hero Cycles is credited with changing India’s cycle market. Decades later, it is again leading a technological revolution with Aditya Munjal at the helm of a new avatar, the e-cycle maker Hero Lectro.
The big breaks came in phases. Once his grandfather started withdrawing from business, Aditya went store-to-store, primarily in western and southern India, for six months. “I noticed we were market leaders in mass cycles, but premium cycles was a growing category, and weren’t leaders in that,” he says. He created a premium brand called UT. The big opportunity beckoned when Firefox Cycles came into the Hero fold. After three years, Munjal moved on to other interests of the conglomerate, including commercial real estate and auto ancillaries.
Then, close to three years ago, Munjal’s father brought the idea of foraying into a nascent yet lucrative market of e-cycles. “I had apprehensions; it won’t sell in India, it’s a rich person’s vice,” Munjal reminisces. But he was sold on the idea when he rode an e-cycle in Amsterdam. However, just importing European e-cycles would not have worked. The challenge was to build a quality but competitively priced product. “The brand needed a new DNA. It had to function like a sports team,” he adds.
Hero Lectro started as a pilot project in Punjab, and two years later—using Hero Cycles’ existing network of dealers—expanded to 100 brick-and-mortar stores. Today, its products are available in more than 600 dealerships in addition to its website and some e-commerce partners. Munjal says six out of every 10 e-cycles are sold in Tier-II and Tier-III cities, and in metro cities, a majority of buyers are women. Apart from e-cycles, Hero Lectro Cargo, a Division of Hero Lectro, offers solutions for commercial cargo transit needs.
Hero prefers indigenising production and buying parts from local suppliers. “Hero Lectro is helping the supplier ecosystem become competitive. The state-of-the-art Hero Industrial Park is being set up over 100 acres, of which 50 acres have been earmarked for a Suppliers’ Park,” says Munjal. Hero has invested `1,000 crore over two years in the company’s E-Cycle Valley project, which also includes a high-end, export-oriented manufacturing plant. Spur Technologies, a subsidiary of Hero Motors Company, and maker of premium bicycle parts, has been roped in to set up a manufacturing facility in the Suppliers’ Park.
Munjal claims that Hero Lectro—like Hero Cycles—has become a bellwether company in its category. “We have been driving the entire category for past three years and have seen almost 2X growth year on year,” he says. The pandemic, too, brought a silver lining as people revisited their lifestyle choices and became sensitised towards their ‘carbon footprint’. This manifested in an uptick in cycling. The e-cycle market will reach close to 1,00,000 this year. Hero Lectro’s share is 70%. “At a global level, Hero aspires for a 10% share of the e-cycle market,” he says.
A Mordor Intelligence report says the e-cycle market will reach $2.08 million in 2026—a two-fold growth from its value in 2020—with CAGR of about 12.7% between 2021 and 2026.
That should bode well for the company. — Rishi Kant