Selling cycles in India, at a price at which many Indians buy motorcycles and cars, is not easy. But trying to do exactly that is Beat Zaugg, CEO, SCOTT Sports, who, in an exclusive interaction with The Dollar Business, spoke about his belief in the Indian growth story and the company’s expectations from it

Interview by Vanita Peter D’souza | The Dollar Business

 

TDB: You have been in India for just four years. How has your experience been so far?

Beat Zaugg (BZ): SCOTT was initially established as Probike India Pvt. Ltd. in 2009 as a subsidiary of a South African company. SCOTT Sports SA, which is headquartered in Fribourg, Switzerland, was scouting for opportunities in emerging markets and offered to buy out the entire Probike business in South Africa and India. It was a strategic decision, taken after carefully evaluating the potential of the Indian bike market. With this, SCOTT Sports India began its journey as a subsidiary of SCOTT Sports SA in 2011. SCOTT is the first international cycling brand which has a direct presence in India. SCOTT has set up its own sales and distribution offices in India. We strongly believe in the India growth story and want to be an active participant in it.

TDB: Given the extremely high temperatures, pollution levels and the state of roads in India, how bright is the future of the cycle industry?

BZ: Lack of cycling tracks, bad roads and less safe travelling are problems that every cyclist faces. But if you look at the brighter side of it, cycles neither require fuel, nor do they require much space. They don’t even cause pollution. Hence, even the Indian government is developing infrastructure to promote cycling. The Indian market, today, is also largely considering top-of-the-line cycles for fitness over monotonous gym sessions. Indians want such bicycles for sports, fitness and recreation. People have become more health conscious. They are very particular about the quality of bike they ride, their specifications and also the value for money they offer. The market potential is enormous.

TDB: An Indian, probably, looks at a cycle very differently from how a westerner does. As per you, how different is the Indian cyclist from his/her peers in other countries?

BZ: Actually, you will be surprised. A customer in India is very similar to a customer in Europe or America. He/she looks at getting bang for his buck, in terms of getting the latest technology and innovation on his bike. This aspect holds true for most customers worldwide. So, while a consumer’s choice of a SCOTT bike might vary from country to country, his/her basic parameters of choosing a bike remains the same.

 

 

TDB: But there might not be many takers for such high-end cycles in India.

BZ: I would say the mindset of Indian consumers, who buy bicycles, has changed in the last few years. Earlier, bicycles were only an important mode of transport, but now, with changing times, there is a new segment for leisure and fitness biking. I think, Indians lead sedentary lifestyles, primarily due to the lack of infrastructure and open places in the cities. Cycling is one of the most effective ways of leading an active lifestyle. One can load up a bike on a car and go cycling in places where cars cannot go. It allows parents to connect with their kids in the outdoors, which is otherwise spent in front of television screens. We at SCOTT can be one of the major enablers for consumers in India to lead a healthy and active lifestyle.

TDB: Many new-age Indian companies are trying to persuade their employees to use a cycle for daily commuting. Are you betting on this trend to catch momentum?

BZ: I believe cycling your way to office can be a great way to achieve fitness and the best part is that it’s pollution free. Ever since we moved to the new SCOTT office, I myself have started commuting to the office on SCALE 740. I manage to ride a minimum of two days a week to the office. Our story book this year includes inspiring stories of cyclists, who have taken up this trend and are regularly traveling to office with SCOTT.

TDB: Which of your three segments – Mountain Range, Hybrid Range and Road Bikes – are you the most bullish on in the Indian market?

BZ: The Indian market is at a very early stage of evolution. We will not put a finger on either of the above categories as there are consumers for all the three. We believe in providing a wide choice of products to enable him/her to make the correct choice. Similarly, we also make bikes in all wheel sizes (26”, 27.5”, 29” and 700C). We would like to have the opportunity to serve varied consumer preferences across the SCOTT range of products.

TDB: Bicycle imports in India attract a high customs duty of 44.49%. Considering this, what are your long-term plans in India?

BZ: The high customs duty affects all the international players in the market. In that sense, there is a level playing field. In the future, we are open to exploring strategic manufacturing and assembly options in the country to enable the market an affordable entry point for the SCOTT brand.

TDB: Bicycle exports from India are entitled for double-digit duty drawbacks. Is this enough to lure you to make India your manufacturing hub in the future?

BZ: In addition to looking at any sort of manufacturing from a financial point, it is important that we have a manufacturing facility that can deliver quality products that match global standards.

TDB: What are your views on Government of India’s ‘Make in India’ campaign?

BZ: Any government campaign that looks at creating employment and sustainable growth for the country is always positive. We are open to manufacturing in India, provided a stable and conducive framework exists for the long term. This will give us a lot of confidence in the Indian growth story.

TDB: Tell us about your ‘No Shortcuts’ campaign. What was the motivation behind it? How successful has it been?

BZ: No Shortcuts defines the SCOTT spirit of doing things the right way for the right reasons. It’s how we design our products and it embodies the true beauty of sports. The greatest personal achievements aren’t accidents, they are hard earned and well deserved. We like to think that those who use our products are a lot like what we are. They have the same sense of modest confidence. They have the knowledge that perfection is unattainable, but there is no bigger thrill than trying to reach it. We make our bikes for those who measure life in pedal strokes. We make them for those who are going to do what they do whether there’s anyone watching or not. We take “No Shortcuts.”