Enfield Riders Pvt Ltd, a Mumbai-based startup that conducts motorcycle tours, is looking to ramp up its fleet of bikes and focus more on corporate clients as part of efforts to triple its revenue next fiscal year.
The company is also building new revenue streams such as motorcycle coaching classes for women to add to its Enfield bike rental and vehicle servicing offerings, co-founder Baljeet Gujral told VCCircle.
Gujral, who earlier worked with a Swiss bank, left his job to set up the company along with academician wife Poornima. The couple started the company with an investment of Rs 65 lakh, arranged from own savings and their family. The company was set up in 2012 and began operations the next year.
“I sensed the opportunity in launching an organised motor bike touring company, keeping in mind that India has no dearth of bike enthusiasts,” Gujral said.
Enfield Riders operates in a market that is indeed growing but is highly fragmented with many travel agencies as well as bike clubs organising motorcycle tours. Companies such as the Delhi-based Hindustan Motorcycling or the Pune-based Tyre Marks also conduct such holidays.
Gujral claims many such organisations target college students and middle-income salaried people. Enfield Riders targets a more affluent class of people and corporate clients, and also is a specialised bike tour operator rather than a travel agency that conducts motorcycle vacations as one of their many businesses. Also, unlike most other organisations that conduct tours, Enfield Riders provides bikes as well as mechanics and backup vans to the riders.
Analysts believe there is a market for bike tour organisers in India but there are concerns related to security and verification of the customer credentials.
“Security checks are hardly an issue in western countries, but a robust mechanism is yet to be developed in India. There is reluctance from even customers. If you ask someone to deposit Rs 50,000 for a bike, he won’t do it without assurance,” said Rakesh Batra, partner for automotive practice at EY, formerly known as Ernst & Young.
Financials, business segments
The company’s biggest business vertical is expeditions and tours, which account for about 60 per cent of revenue. Its packaged tours cost between Rs 70,000 and Rs 1 lakh. Gujral said the company had about 250 participants in the year ended March 2015.
Though its prime offering is the Ladakh tour, it also conducts trips to Rann of Kutch in Gujarat as well as in Rajasthan and Goa. The international offerings include trips to Tibet, Bhutan, Nepal, Thailand, Vietnam, Cambodia and Sri Lanka. Laos, Singapore and Malaysia are next on its itinerary, he said.
Enfield Riders, which began with six bikes, now has 26 motorcycles and about 20 employees. Many of these employees were earlier working with multinational companies, IT firms and media organisations. Gujral said the company, which is looking to raise venture funding, retains its bikes for a maximum of two years and keeps replenishing its fleet to maintain quality. It has ordered 10 new bikes that would join its fleet in March, taking the total number to 36, he said.
The company hopes to grow revenue this fiscal year to Rs 2.5 crore from Rs 1.5 crore in 2014-15
The company recorded net sales of Rs 1.5 crore in 2014-15 and hopes to grow revenue this fiscal year to Rs 2.5 crore, Gujral said. The expanded bike fleet will allow it to conduct more tours next fiscal year when it will increase its presence to Bangalore and Delhi. The projected revenue for 2016-17 is Rs 8 crore, he said.
Growing focus on corporate clients to organise bike expeditions for their employees will help in achieving this target. The company has increased the number of corporate clients to 14 from five in 2014. Its clients include tyre maker Ceat, IT firm Wipro, refiner Hindustan Petroleum, and advertising agency Ogilvy & Mather.
The company also offers bikes on rent for weekend trips to places 250-300 km away from Mumbai. It offers 350 cc and 550 cc Enfield bikes at Rs 1,500 and Rs 2,000 a day, respectively. It caters to nearly 250 customers a month. Besides, it runs a service station, mainly for out-of-warranty vehicles, and handles 500 clients a month, Gujral said.
In a bid to grow the top line, the company has launched two new verticals. It has started providing coaching to women at Rs 10,000 for a 10-hour session. It claims to have trained 100 participants in the past six months. It has also started customising Enfield bikes, which it buys for up to Rs 2 lakh and sells for as much as Rs 3-3.5 lakh. The company is also looking to sell motorcycle accessories and build a bikers’ merchandise channel to increase revenue, Gujral said.