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Consumers Owning Two Wheelers in India
Consumers Owning Two Wheelers in India
(Analysis by Group 6)
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1. Introduction
Sales of two-wheelers are on the rise with a growth rate of nearly 8% in year 2017-18. India is
now the world’s biggest two-wheeler market. Hence the need to study the consumer behavior of
people owning two-wheelers is on the rise now. There is an increase in the number of rural
people owning two-wheelers. This increase can be credited to better road infrastructure in rural
areas. So even the village consumers now days are ready to travel a bit to purchase products.
Similarly, there is an increase in the number of women owning the two-wheeler in the country.
Unlike the earlier years, household women like to go out and explore the options to buy different
products, rather than being satisfied with the ones that were available near to home. There is also
an increase in the sales of high-end premium bikes. People owning these are basically consumers
who give importance to quality and brands of products than just the prices. So it’s evident that
the two-wheeler users have increased in all different segments of the market, and hence their
buying patterns have also changed. This report analyses the consumer behavior of different types
of two-wheeler owning consumers and different marketing implications for the different
customer preferences
2. Body
The Indian subcontinent, with its large population base, favorable demographics, rising
disposable incomes and varied customer needs offers a ready and untapped market to companies
and manufacturers worldwide. India offers a global platform to automobile manufacturers, and
beat China to become the biggest motorcycle maker in the world (Singh, 2017). With a customer
base as large as India’s, it doesn’t come as a shock that it is the biggest two wheeler market in
the world as well. Compared to 16.8 million units that were sold in China (previously the largest
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two wheeler market) in the fiscal year 2016-17, India recorded sales of 17.7 million units (Doval,
2017).
Figure 2.1 draws a comparison between India and China. China has seen a decline in its two
wheeler sales in the past few years due to a highly regulated market with high import barriers
posed a threat to the domestic two wheeler market there. On the contrary, Figure 2.2 shows how
the Indian market has seen an upturn with diverse demands from diverse segments of the market.
A major portion of India’s sales comes from commuter motorcycles and automatic scooters. An
increase in the purchasing power and absence of restrictions like those in China has given a boost
to Indian two wheeler sales (Bora, 2017). In terms of having the largest market share within
India, Hero, with a recorded sale of 66.6 lakh units in FY2016-17, enjoys the lion’s share. With
Figure 2.1
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Two wheeler sales in India (millions)
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2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Figure 2.2
Two wheeler sale on a continuous rise. Where will the old two wheeler go ?
The Indian two wheeler market can be segmented on the basis of the following variables.
Geographic Segmentation –
Figure 2.3 shows a distribution of two wheelers and other vehicles over different geographical
locations in India.
1. Rural
Consumers in rural areas form a major chunk of the total two wheeler population in
India. Almost 50 % of the demand comes from rural areas. The Indian government
plans on improving road connectivity in the years to come, and this move shall
further surge up rural demand. In the rural areas, demand for scooters particularly, has
seen an upward trend. Absence of adequate public facilities also adds to a greater
demand for two wheelers. According to reports, two out of every five two-wheelers
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sold is in rural India (Team Fintapp, 2017).=> Rural area can’t be neglected in terms
2. Urban
Two wheeler demand arises equally from urban areas. Urban infrastructure being
choked is one of the main reasons why urban consumers have moved to two
wheelers. There’s more convenience and ease, and the travel time reduction has been
a major reason too. People are buying two wheelers for shorter commutes and errands
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Figure 2.3; Source: Livemint
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Demographic Segmentation – ( Under Social)
1. Income groups
For the poorest people; bicycle is the preferred vehicle for daily commute whereas the
richest quintile chooses two wheelers as the preferred medium. A surprising detail
however is that even car owners prefer using two wheelers to reach work, maybe due to
road congestion and traffic. (Bhattacharya, 2016) Rising disposable income has led to
the replacement period for two wheelers to come down to 5-7 years. Newer and more
efficient models in the market are being bought by people, because they have more
2. Gender -
A noticeable trend in the past years regarding two wheeler sales is increasing number of
women buyers. Reports show that a quarter of scooter buyers are women. Among all two
wheelers, scooters have been a favourite among this segment, with a quarter of the total
buyers being women. Data shows that in the past 5 years, the percentage of scooters in
the collective two wheeler market in India has grown from 20 to 33 (Bhattacharya, 2016).
This increase in scooter demand is also a key factor in the overall positive growth
3. PESTLE
Political:
With political decisions such as GST and demonetization coming into effect in the recent past,
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people who buy normal price range bike ranges, have faced a lot of issues including price rises.
For the higher end buyers, it hasn’t affected much. (Roy, Pal & Saha, 2017)
Economical:
According to latest economic survey of India by IMF, the average salary hike of Indian
employees has increased by around 10% in 2017-18 (IBEF, 2018), whereas the two-wheeler
prices have increased only by nearly 5%. This shows that the ability to buy a two-wheeler is
easier than it used to be in India. Comparing the urban and rural consumers with two-wheelers,
people in urban areas spend a lot more since they have a lot of options. Higher brand products
are much accessible to urban people than villagers. With two wheeler usage rise in villages,
compared to few years back, their spending has also increased as they can travel some distance
Social:
Comparing men and women, number of women who ride two wheelers is less. But it’s becoming
better in the recent past. It is evident from the fact that the share of scooters in the overall two-
wheeler market in the country has risen from 20% to 33% (Thakkar, 2017). The social stigma
that only men should drive two-wheelers is rapidly changing, number of urban working women
using two-wheelers is increasing each year and even women in rural areas are starting to use
Technological:
As the technology has improved, bikes have become cheaper. Hence the number of two-wheeler
consumers has also increased. Similarly, as the technology has improved, gearless and self-start
two-wheeler sale is on the rise as it easier to ride. This can be seen in the increase in women
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drivers.
Most of the two-wheelers have the space to keep a specific amount of luggage in it. Therefore, it
is easier to go for shopping and bring the products, especially the daily use household items.
Legal:
With much stricter rules against drunken driving, two-wheeler users consuming alcohol at bars
have reduced. This has led to increase in two-wheeler owners taking use of taxi services while
going to and coming from bar. So online taxi service providers such as Uber and Ola should try
to capitalize on it. They should identify the major bars in the cities and try to provide more taxi
availability in the rush hours near the bar. They can also come up with ads which portray how
4. MARKETING APPLICATIONS
The two wheeler market is on a consistent rise in the last few years and the statistics show that it
will further increase in the near future (Figure 2.2). What it means for the market is a growing
income pattern amongst the Indian consumers. A major portion of sales is also derived from the
people having two wheelers. Therefore all these factors make this section of consumers a
As we have seen in the previous section, consumers owning two wheelers comprise a major
chunk of the Indian economy. From men in rural India to the modern women in urban India,
from bottom quintile to the top quintile there is a huge variation in the aspiration, demand,
expectation and composition of the customers. Hence, different analysis and strategies are
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Two wheeler owners from Rural India
Approximately 50% of the two wheeler owners are from Rural India. Hence, study of the
economics and infrastructure of these regions become important for the companies in order to
market and sell their products efficiently to these consumers. Recent studies have shown a
changing consumption pattern amongst this section which now largely resembles the urban
consumption trend. Also, owing to the potential size of the market, this section presents large and
The needs of this section are very basic. To name some, they comprise of nutritious food, basic
amenities such as potable water, roads, electricity and commodity goods for day to day use.
India's Aspiring Rural Consumers,” rural consumers are particularly aspiring or striving to
purchase branded, high quality products, which could be considered as a rising want amongst
this section.
Products where price is combined with utility and not just low prices’ products.
Rural India which is growing annually at a CAGR of 17.41 %. A rising trend of two
wheeler purchase is only going to further increase the sale of these products to this
section. Further easy commutation through vehicles is going to enhance the buying power
of these consumers
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Services - Rural consumers have now realized that government provides them free
services but they are not of good quality. These days they do not want to send their
children to the local village primary schools because they know that teaching quality does
matter for the development of their children. A similar case holds true for healthcare
facilities. Further, as these consumers have a fair amount of equity and savings with
them, education and healthcare firms can find a good potential market here.
These are the consumers which are currently showing the maximum signs of
make online portals as key channels for companies trying to enter and establish
special campaigns etc. can come very handy in communicating and advertising products
to this section. Besides these, other mass media like hand bills and booklets, posters,
Refill Packs- The concept of refill packs of toothpowder, tea, talcum powder and other
FMCGs are promoted by the marketer as the money saving options while providing
quality at the same time. Therefore big companies need to adopt this approach to
Urban population comprise of a diverse set of people coming from different economical
background and walks of life. Therefore, this is probably the most diverse section amongst the
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consumers owning two wheelers in the country. For example, a push-truck vendor might own a
second hand scooter while a rich college student might own an imported superbike and at the
same time, bikes and scooters might be the preferred mode of travel by middle income groups.
Hence segregating this section according to income is a sensible way to formulate marketing
This is the group which comprises of the major bicycle owners in the country. Apart from this
they also own mopeds and other second hand two wheelers. Any household earning an annual
salary less than 5 lakhs per annum can be clubbed into this category. This category is mainly
concerned with the basic utility products and the products which could be the needs for higher
Some strategies which could be used to market product to this category of consumers might
include:
Deals such as buy 1 get 1 or 1 free for 2 purchases could be an effective strategy for this section.
The more bargains offered, the more likely shoppers are to make an increased future purchase.
Other successful strategies include loyalty cards that offer rewards and double-coupon savings
days.
Develop Relations
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Seeking feedback from the customers can deliver the message that their needs are being
understood and the organization is committed to fulfilling those needs. This could act as an
effective step towards building relations which could increase the prospects of future sales.
Partnering with government and non-governmental organizations can open up avenues and
markets that are difficult to reach otherwise and make the products visible to these sections.
Stay Small
Low-income consumers tend to use neighborhood stores rather than large supermarkets and
department stores; some lack communication skills and are reluctant to talk to sales people.
Hiring local staff for communications can do the trick and attract a lot more customers. Also
word-of-mouth recommendations are heavily relied upon, especially in making major purchases.
Households earning an average income between 6- 15 lakhs per annum come under this
category. This section comprises the major bikes and modern scooter owners within the country.
New research from the McKinsey Global Institute (MGI) shows that within a generation, the
country will become a nation of upwardly mobile middle-class households, consuming goods
ranging from high-end cars to designer clothing. In two decades the country will surpass
Germany as the world's fifth largest consumer market. Middle class typically own a television, a
refrigerator, a mobile phone and perhaps even a car. Although their budgets are stretched, they
scrimp and save for their children's education and their own retirement. Typical needs of this
income group includes basic commodities such as utilities, rations, household goods along with
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petrol/diesel, family vacations, fast foods and their wants may include owning multiple flats,
A combination of high utility with low purchase price is the key mantra to attract these
consumers.
When shopping, middle class consumers seek quality and value, but appreciate distinction. They
are proud to shop within their communities and support local businesses. But a brand doesn’t
have to be local to feel local. Even larger, national chains can emphasize the fact that they care
Indians are highly emotional - esp. this section of consumers. They are ardent followers of Indian
celebrities and prominent figures. Hence, featuring one of the popular stars in a companies’
official advertisements can work wonder to attract a major population. People also associate the
quality of brand with the level of celebrity popularity. Therefore, more famous the celebrity is,
Consumers whose household income is more than 15 lakhs per annum fall in this category. They
basically have very high end demands and need which is out of reach for the lower income
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groups. These customers have a distinctive sense of style and taste, and they feel that their hard
work and greater ability to spend means that they should enjoy exclusive brands. Those brands
should function not only as a great value and an excellent product, but also as a symbol of
Some market strategies that may come handy while targeting these consumers include
Quality is the paramount criteria of purchase for this section. As these people have adequate
amount of wealth to spend, a more comfortable and luxurious brand placed at higher value is
Customers who make well above the average wage are simply more skeptical of mass-marketed
products and concerted advertising efforts. At the same time, they’re more likely than other
groups to purchase a product if they’ve heard about it from a friend. This word-of-mouth
Therefore, Indian two wheeler owners are wide open for possibilities to the emerging as well as
5. LIMITATIONS
This study has few limitations as it is restricted to only a base of Two Wheeler users, and so the
results do not say a lot about consumer behaviour, and we do not have any hands-on primary
data about the real segmentation of consumers. The consumer behaviour is now changing rapidly
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with the new age internet and social media. Urbanisation, too, is a constant phenomenon in India
and is influencing the life style and buying behaviour of the consumers. Therefore, the study is
based on lot of perceptions and assumptions which might not be true in the real world scenario.
6. CONCLUSION
The two wheeler market in India has been performing considerably well and has seen a positive
CAGR over the past few decades. The large population base in India and the growing income
continues to provide immense opportunities for companies to tap into. Furthermore, government
schemes like Automotive Mission Plan (AMP) 2026 aim to take India ahead and achieve better
milestones with respect to India’s position in the global auto industry. Manufacturers need to
look out for changes in customer preferences as the youth market in India provides scope for
even high end and premium options. Good monsoons, continuous availability of easy financing
options in rural India, better road connectivity, and consistent need for mobility will ensure that
7. REFERENCES
Singh, 2017
https://autoportal.com/news/india-becomes-the-largest-motorcycle-producer-of-the-world-
overtakes-china-11537.html
Doval, 2017
https://timesofindia.indiatimes.com/auto/bikes/india-is-now-worlds-biggest-2-wheeler-
market/articleshow/58555735.cms
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Bora, 2017
https://auto.ndtv.com/news/india-becomes-no-1-two-wheeler-market-overtakes-china-1690084
https://www.fintapp.com/blog/two-wheeler-industry-analysis-research-report/
Bhattacharya, 2016
https://www.livemint.com/Politics/Yd2EAFIupVHDX0EbUdecsO/One-in-three-households-in-
India-owns-a-twowheeler.html
https://www.thequint.com/voices/blogs/demonetisation-and-gst-reckless-decisions-that-cost-the-
economy
IBEF, 2018
https://www.ibef.org, 2018
Thakkar, 2017
https://economictimes.indiatimes.com/two-wheelers/urbanisation-rising-women-users-better-
roads-add-speed-to-two-wheeler-sales/articleshow/58567070.cms
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