IIMS Journal of Management Science
Year : 2021, Volume : 12, Issue : 2
First page : ( 88) Last page : ( 97)
Print ISSN : 0976-030X. Online ISSN : 0976-173X.
Article DOI : 10.5958/0976-173X.2021.00006.3

Innovations in distribution channel⇔a case of hero cycles

Paheli Pranati¹

¹Pranati Paheli is a Ph.D. Scholar in Management at Jain University, Bengaluru. She can be reached at: pranatipaheli@gmail.com

Online published on 27 August, 2021.

Abstract

You would have surely heard about car loans @ 7.75% but have you ever come across ‘bicycle loans?’ In 2013, Hero cycles, the world's largest bicycle manufacturer announced that it will be tying up with microfinance institutions (MFIs) across India to ensure that the bottom of the pyramid (BOP) can get easy access to finances to buy bicycles. Creating a new sales channel using microfinance institutions (MFIs) to reach the weaker sections of society was a road never travelled. Bicycle industry is a price-sensitive industry because the domestic demand for bicycles comes from the low-income population. Also, in India the penetration of bicycles in rural areas is extremely poor. It is interesting to look at how the industry would reach the enormous untapped potential in the rural areas to maximize its bicycle sales through microfinance. The research paper intended to explore the genesis of a new sales channel by providing microfinance to rural women entrepreneurs. What were the challenges in creating a new sales channel? How the company overcame the challenges of the new sales channel? For the bicycle industry, it's a new, unconventional sales model and we need to figure out how far the industry can peddle on microfinance institutions (MFIs) to sell bicycles in India.

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Keywords

New sales channel, Channel of distribution, Bicycle, Microfinance institutions (MFIs).

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