Why Legacy Businesses Must Innovate to Survive | Ep. 105 [Tariq Miflal]

What does it take to transform a 50-year-old family business into a future-ready mobility company? In this episode of Industry Ignited, Dr. Leeanne Aguilar sits down with Tariq Miflal, CEO of Lumala, to explore how a third-generation manufacturing business is evolving from traditional bicycles into e-bikes, cargo bikes, electric mobility solutions, and new sustainable business models.

Tariq shares lessons from leading through disruption, earning the trust of long-time employees, understanding customers firsthand, and choosing profitability over competing in a race to the bottom. From automation and data-driven manufacturing to sustainability, global expansion, and battery-swapping technology, this conversation offers valuable insights for leaders navigating transformation while preserving the strengths of a legacy business.

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Dr. Leeanne Aguilar 0:06

What does it take to transform a 50-year-old family business into a future-ready mobility company leading the ship towards sustainable transportation? Welcome to Industry Ignited. I'm Dr. Leanne Aguilar, and today I'm joined by Tariq Mithlaw, CEO of Lumala, a third-generation manufacturing company evolving from traditional bicycles into cutting-edge electric mobility solutions. Tariq, welcome to the show. Hi, Doctor. How are you doing? It's nice to be here. Yeah, thank you for joining me. Now, Tariq, you're leading a third-generation family business. How did your journey into the company begin? And what drew you to take on a leadership role?

SPEAKER_01 0:46

So a bit backstory, I think before I start, both my sides of my family, my grandparents both come from a background of bicycle manufacturing. So I'm a third-generation family business and both have two separate businesses and they're still running today. Ours being a Lumala, and theirs is uh more focused on export only. So I joined the business, I think uh I've always known uh or rather I I dreaded that I'll someday be part of this uh family business, whether I like it or not. So but uh during my journey I I've always had a uh a passion for mobility, mainly cycling. So I enjoy riding a lot, and so even though we've been, I would say, 50 plus year old bicycle, mainly uh high-oriented company, we've never really ridden bikes, nor did we promote it. So we've never had this understanding of uh because the the market segment that we've been is it's very volume-oriented, and we've never really had to think about the user, the user's experience. We've just uh had a copy-paste approach of it. I think that's before I joined in. That was the mindset of the company that you know we saw big brands doing it, and then we were like, you know, let's just uh see how it works here. And also we've been exporting for over three decades. Uh again, we we were under this uh assumption that these uh bicycles have been uh you know thoroughly vetted, have these huge research and development teams, put a lot of effort to understand the user. So we just used that formula and you know repurposed it, assuming that would work. So yeah.

Dr. Leeanne Aguilar 2:28

Okay, yeah. So it was a family business, and you just assumed that you would be part of it because both sides of your family were always into the bicycles. Yeah. And but that's interesting that you said it was kind of like a copy and paste approach where you they were just doing things how they'd always been done. There wasn't a lot of innovation, I'm hearing, and it was just kind of moving forward how you know they'd always done things. Now, tell me a little bit about the roots, though. I know that Lumala has deep roots tied to Japanese manufacturing principles. How has that philosophy of continuous improvement shaped your leadership approach?

SPEAKER_01 3:00

So I think that uh leadership approach, I think I got it from my dad because he's the one who started the uh manufacturing of the first frame in Sri Lanka with regard to our company. And uh he's the one who's got his hands dirty, got someone on board, and learned to weld the first frame. And I think something that I've observed of the style of leadership, he's continuously improving. There's never this uh perfect for him, which is uh in a business sense with a very complicated bill of materials, it's a lot of work as in to have that type of a mindset. But I think uh just by seeing the way uh so probably he would have inherited it with the brand because he had he was the key person to bring Lumala into Sri Lanka as well, visiting Japan multiple times, and so I think this uh culture because the whole company was built around his passion for building and continuously improving. So I I'm assuming that's where we got this DNA from.

Dr. Leeanne Aguilar 4:02

So was the company was it founded in Japan, or you or it just had influence from the Japanese culture as far as how you ran the business?

SPEAKER_01 4:10

So uh we're a third-generation family business. My grandfather we've had a uh trading business which is buying and selling, and bicycles was just a product. I think we were mainly into hardware at the time, and bicycles was just a product line. So Lumala was it's a similar storyline to your Ferraris and Lamborghinis, where we were importing this brand from India, and obviously during this time there was no email and all of this. So there was this consignment which the vendors had uh the suppliers had sent it over and not informed. So obviously, months later, when we got to know there was a very huge uh you know demorage to be paid, and uh I think my grandfather took a very firm decision that you know it was the fault of the supplier, and uh they had to take responsibility. So this rift, you know, made us look outwards, look for other options, and uh this brand basically uh Lumala from Japan was identified, and then we started importing this brand for nearly 10 years before we started manufacturing it in Sri Lanka.

Dr. Leeanne Aguilar 5:13

Oh, okay, all right. So the business actually evolved and shifted, and then there was uh an opportunity to bring the this you know the Lumala brand to Sri Lanka. Okay, and so so the um it's because of the supply chain and the the issues there, and yeah, so the business model actually evolved. Okay. Now you came from a background in IT and business development. How did that influence your perspective when stepping into manufacturing?

SPEAKER_01 5:38

So honestly, I think all that I studied, I don't think I put it to uh uh use for the first 10 years because I think I would say after uh 10 years did I realize the need to digitize because this first 10 years I was exploring, figuring out my own path, and getting to grounds with the product itself. So I was very focused on the product level, so I I wasn't obviously in any leadership role, I was able to roam freely, so I was able to pick a few uh products, develop them, so I didn't have to worry about the rest of the business because I had my uncles in the business, my brother. So my only focus was product, and obviously, again, another shift in the business. There were some partner settlements, my uncles split from the business, so all of these shifts uh around 2019, I was with this opportunity into a leadership, you know, to take over, and because I had put in a lot of effort to understand the product, I think in a consumer level, I felt like I had what was needed for the company at the time, and my father was retiring as well. And due to also a health uh on not such a good health after a heart attack, so it makes you have to step up in times like that, and you know, let him also take a back step and you know relax a bit rather than pushing it. Yeah. So I think after this time is when systems and IT came into play.

Dr. Leeanne Aguilar 7:02

Right. So you did have time to just get to know the product, is I'm hearing, before you actually stepped into leadership. Yes. And was it during that time that you took on you know riding bikes and and started enjoying the product from a the consumer perspective?

SPEAKER_01 7:15

Yeah, so we've uh our our business had grown into multiple. So we've had uh the manufacturing arm and then we have another trade a trading business which did toys, fitness products, and bicycles. So I didn't join to the manufacturing part initially. I started at the retail part of it, and I was very passionate about the cycling, so we got I think giant bicycles, they are the global number one leaders of cycling, so we were like a distributor of them in Sri Lanka, and so these bikes were easily 10 times the price of anything we sold. And I tried to have this uh relationship with the customers. I I sold them myself, I had the relationships with the customers, so I understand how they thought about it, and it gave me a very unique insight to how people thought about uh bicycles because I think something to uh remind uh countries like us, Sri Lanka, bicycles are considered the poor man's uh means of transport. It's always thought of an inferior like if you were riding a bicycle, you were assumed to be in a certain uh class in life because over here we have extremely high taxes, so it's the the people that really needed bicycles, they used that for a utility for means of transport. So this high-end brand, the clientele that I dealt with gave me this fresh perspective of what passion you know, would uh some people that even didn't own a car but they wanted a four thousand dollar bicycle, so they used to come in a taxi, get down, and so these unique experiences, like uh I think at the initial stages you used to judge a book by its cover, you know, when you see them getting down from a fancy vehicle, you assume, okay, I can I can do a big sale today, and when they came and got down in a tuk-tuk, you thought, okay, today's gonna be a slow day. So, but I think it shifted my assumptions, my perspectives, because in my experience, the person who had most of the money was looking for the cheapest uh bicycle, and the person that was more heavily invested because they were looking for triathlon bicycles, specialized uh you know, for that uh sport that they were doing, whether it is road riding, mountain biking. So I think this uh customer that I I managed to understand what the consumers uh really wanting and how they perceived value, basically. Okay.

Dr. Leeanne Aguilar 9:31

Yeah, so it really taught you to uh challenge your own perceptions and really listen and instead of making assumptions, just really uh hear what the customer was looking for. And yeah, that that is interesting that you know, I guess some customers, if they're if they have more money and they're not depending on the bicycle for their main source of transportation or they're not using it for the triathlons or the you know other sports activities, then right, like you said, they're they're not going for the higher end bike, but those who are more invested in in that means of transportation or for sports, etc., would be more interested in the specialized bikes. Yeah, interesting. And also I'm hearing just like listening to your customer, really um hearing them and getting curious about what they are really wanting and needing, that helps you really understand the product from that perspective. And uh so I think that probably empowered you in stepping into the leadership goal. Yes. So, what were the biggest challenges and opportunities you faced when when transitioning Lumala from a traditional bicycle company into a mobility-focused brand?

SPEAKER_01 10:35

With us, I think simplifying the business. We've uh at least I wanted uh a more focused structure to run the business, so decided that even this trading company was given as part of settlements for some of the sleeping partners, and we put all our focus, we moved our office from Colambu, the capital, all the way to our factory, which is like just 25 kilometers from the Colombo port. But and basically I wanted to be in ground zero to understand you know what was happening, how it happened again because I've only had this retail experience, so I was coming with a a different mindset with operations. So the challenges that you get, I think mine would be the largest challenges. We have, I would say, around 20 or 30 percent of the workforce on average uh over 20 years been employed with the company, so they've been there. Yeah, some of them are older than me who've been in the company, you know. So uh when you start introducing systems, you introduce discipline policies, getting them to understand. I think that would have that I would say is like the biggest challenge because they are in very senior pose and you don't want to, you know, it's a balancing act. It's trying to get them to understand that it's going to make their life easier, we'll be able to scale faster. So I would say if I were to pick one of the largest challenges, I would say it would be that.

Dr. Leeanne Aguilar 11:54

Okay, so it's really getting buy-in from your senior employees, like people who've been there a very long time, like you said, some of them longer than than you've been alive. So, I mean, how do you do that? How do you get people who've done things a certain way and have a certain mindset to shift and think abroaden their perspective and think a different way?

SPEAKER_01 12:12

So I think generally like people have this assumption, you know, when you're the boss's son or daughter and you get into the business, they already have this assumption that you don't know what you're talking about. So I've always had this uh to work ten times harder to understand something before I spoke about it. So because I think again this is from my father because uh the upbringing I've had this more of a tough love uh upbringing. So I'm one of five children. So being the middle one, you know, it's always been learning to figure it out myself, you know. So I've never been so I think that helped me to, you know, really put in that extra effort to understand something before I spoke about it. So I went got my hands dirty, went to that exact operation myself, got my hands dirty there, took videos, analyzed the problem before I spoke anything. So that way when I give them real-world examples, when I showed them evidence about whatever I was speaking about, it gradually built the trust. I think. And then I think it it takes time.

Dr. Leeanne Aguilar 13:13

Yeah, so just going onto the production floor, really getting to know every step of the process and like you said, get getting your hands dirty, and that will build confidence with the other employees because they know then that you know what you're talking about because you've actually you know worked with the the process and the parts and and uh yeah experienced it yourself. I think that makes sense, right? And developing trust and credibility with your own, you know, more senior team members. So you've shifted into e-bikes, cargo bikes, and now broader light electric vehicles. What market signals told you it was time to evolve?

SPEAKER_01 13:46

I think that's a really good question. So uh Sri Lanka, I think uh again you need to get back to our home ground. Sri Lanka has been a very, I would say, turbulent type of a space for a business because every time a new government comes, the policies change. So it's like an evolving landscape and mismanagement, there were terror attacks, so the all of these things, and sometimes there were disasters. We've been uh, I think, you know, uh starting to familiar ourselves with all of these impacts, you know, these shockwaves. Give an example is like uh 70% of our business, I would say, up to 2013 was exports, and majority was to Europe. And uh one of the shocks that we had in 2010 was uh so from Sri Lanka to Europe uh was is zero percent duty, whereas our competition, which is primarily China, which had an anti-anti-dumping duty uh imposed on them. Uh but between 2010 to 2017, Sri Lanka lost this uh GSP plus status, and our business had heavily uh was geared and we had borrowed heavily just to uh scale up our manufacturing and keep up for this demand. So when this uh you know shock of overnight the plugs were pulled, uh, and you realize that it's not in your control, it was uh a government related, and you know, the government weren't following what the European Commission wanted. So we realized that uh I think this is one example, and then there was uh we had a financial crisis, COVID, uh the rupee almost uh you know against the dollar devalued almost double. So these uh shocks kept on, you know, made us I would say resilient to figuring out to make sure that the business needs to be sustainable. Because uh, I would give another opportunity which arose also is uh with the trade wars with uh China and USA, Sri Lanka was never able to compete with China. And the when we realized that you know, with this Trump coming into his presidency, we started working ahead of time, preparing and expecting this uh because he had a similar approach in his first term, and because we prepared for it, we were the first I would say factory in Sri Lanka, amongst many others, to export to the US, which we've done. So, and I think regarding your question on uh the other product ranges that is e-bikes, cargo bikes, and I think I would want to frame it as a mobility company. The reason we've uh we've wanted to move in that direction was again with these shocks. We wanted the business to be sustainable and we wanted to grow a more predictable growth rather than uh again with COVID, many people started riding bikes. There was this artificial global demand, it was not just a Sri Lankan thing, it happened globally because people were locked down, and with this global demand, all the manufacturers overmanufactured, and then there was excess supply in the market, and then it the entire market almost tanked for the almost two years, and I think some markets are still recovering, like in Europe. So, with all of these experiences, we realized that we can't rely on simply the bicycle because uh again Sri Lanka still uses bicycle as a means of transport, and it's not for there is a very minute uh percentage using it for fitness and maybe you know uh I would say blue collar and white collar kind of a usage, but it's very very low usage in major cities, especially like in Colombo. It's primarily used in the sub other north, east, and all of these uh uh other provinces because Sri Lanka has more of a scattered development, it's not planned cities like you get in uh uh most of the developed countries.

Dr. Leeanne Aguilar 17:39

Okay, wow. Yeah, so I'm just really hearing that you you had to learn how to adjust and really anticipate major changes, whether they're economic or crises, wars, etc. So, I mean, what do you do to prepare for those kind of things and to look forward and anticipate disruptions?

SPEAKER_01 17:58

So I think some of the steps we've taken was um like we've been uh a B2B business. Our business model was made primarily we uh manufactured and sold to either a distributor or a dealer, and we never really sold to the end consumer. Ever since I think COVID lockdown, uh we were forced to go e-commerce and sell digitally. So, with all of these and selling to the end consumer gave us a better uh, I would say, control in the market, trying to understand what their needs were, what their pain points were, because we've always got uh the information we got were assumptions from our customer base, namely the distributors and dealers. And the reason we decided to reimagine ourselves as a mobility company was it gave us more opportunities to look beyond simply bicycles, because we we have the technology, the capabilities, engineering teams, design teams, and we've had this already uh to manage this existing business. So we're trying to use this same team and seeing how we could tap other niches and markets and see if there is a way we could expand. Because uh, we've speaking to multiple uh you know factories, and we we have this luck uh huge opportunity to visit multiple Chinese factories, Indian factories, and all of that. So, one thing I under get out is that many people don't like to do the hard stuff. So the the cargo bikes are a good example of that, you know. So whenever I say that you know we we manufacture these cargo bikes, the look on their faces, they're like, you know, why amount of effort that you have to put into it is uh extremely high. And so that's something those feedback and that understanding I realized that look, if we are to sustainably grow, we need to figure out a way to do things which others aren't very keen on. Because in Sri Lanka, it was again like a you know a price war. So if we quoted something to some client, they'd go to the other factories in Sri Lanka and say, Okay, they gave this price, what can you offer? So then they offer a dollar less, and you know, it's a uh race to the bottom. So we realized that you know we need to optimize on our profitability. I think the biggest focus, but we earlier focus was the top line, the revenue. I think what's shifted now is we're focusing on the bottom line, prioritizing our profitability, and I think uh that allows you to grow sustainably.

Dr. Leeanne Aguilar 20:17

Right. Yeah, so you diversified, you expanded into different products and you know, decided to take on the hard things and the challenges that others weren't touching. Because, like you said, you know, if you're just focusing on price, it's a race to the bottom and it commoditizes your products as well. So instead of just giving in to that, it's differentiating yourselves in ways that that others can't or aren't competing with. Yeah, so I think that's yeah, a good strategy.

SPEAKER_01 20:46

And another example I could uh give was with this uh profitability side of things, we realized that we needed to communicate directly to the end consumers. So we started creating content in social media, getting organic views. Example, today on average we get like 2.5 million views every month, organic views across the platforms. So uh because earlier our dealer, like if we had 100 SKUs, they would just pick 30 based on their gut feeling, you know, they're like, no, only I can only sell these. And uh so then the balance 70, it was very difficult for us to forecast because it it was never a very clear, but the moment we started getting access to uh uh end users, or I wouldn't say end users, but I would say uh the people who ended up purchasing these bikes, or the e-bikes or the cargo bikes, the decision makers, what we realized was that we we could open up all hundred plus SKUs to them. And they started going to their nearest dealer and showing the you know the picture on the website. They were like they demanded for that models. So it created a demand, uh, you know, so it was like a push and pull effect. Right. It's not just uh yeah.

Dr. Leeanne Aguilar 21:58

Oh interesting. So if I Bypassing the, you know, uh distributors and going directly to the consumer, to the the people who are buying your bikes, you were able to create that awareness and open up your product line, is what I'm hearing. So if you're going exclusively through the distributors, they're only presenting the customers with a certain number of products. And so the the clients or the end users aren't even aware of everything that you have to offer. So yeah, that's interesting. Using social media then to uh create that awareness, and then that created the demand to the distributor. So then they are coming to you and saying, Okay, now we have a demand for this. Because, like you said, before the distributor didn't even know what the customer really wanted.

SPEAKER_01 22:38

It's very a price-sensitive market, I think very similar to India. And consumers always wanted to pay the lowest. So whatever was the cheapest, that's what they would end up purchasing. So again, another benefit we got was by differentiating ourselves, we showed how a bicycle was made, how do you pick the right bike, educating consumers also gave us an edge. Like even today, we are on average with our nearest competitor around 20% higher with regard to pricing, but still people prefer us because we we've got that trust and you know uh built that relationship.

Dr. Leeanne Aguilar 23:13

Yeah, focused on the relationships, focused on the customers' actual needs. I mean, you you mentioned before a lot of times customers don't really even know what they need, they have a problem, so it's like they can define their problem, but it's you know up to you to figure out how to solve that problem in a way that maybe they're not even away or aware that it even exists. So that's where innovation I think comes in in solving those problems. Yeah. And Lumella operates in a unique environment. So I know you said in the cities they're not as bicycle dependent, but in the other areas of the country, they're the bicycles are essential for transportation. So, how does that shape your product design and innovation strategy?

SPEAKER_01 23:52

So, with regard to, I think so. Something I I've learned, I think, with one of a meeting that we've had with, I think it was Decathlon, if I'm not mistaken. What they told me was they always thought about the end user and not the person buying the product. It took me a while to understand this concept, and I would say it's something that you know it has shaped a lot of my decision making since, because uh a three-year-old doesn't the decision maker is most of the time his or her's parents, and but then you need to know how to appeal to that three-year-old as well, but also the content or the marketing or whatever the information you need to give it to the decision maker, and similarly, with regard to your question on using it as a utility purpose. So, in Sri Lanka, a lot of the bikes were purchased by a lot of NGOs, a lot of charity organizations. There was, in fact, even army and you know that had camps in the region. Uh, the government also supported because they realized that there is a need for such and such people. Like, I could give you an example of one of my staff living close to the factory, and a factory is a pretty developed area, it's by the sea. So it's generally to get to her nearest bus halt, the bus stop was three kilometers. So she had to use uh either a three-wheeler tuk-tuk to get to the bus halt, or she had to walk three kilometers, and then even when she got to the bus halt, there wasn't a bus waiting for her. She had to wait. And in Sri Lanka, I think only recently we've started having bus schedules published and tracking. I think this was happened like two weeks ago. If I'm yeah, this was with the launch of a new uh fleet of buses, and that's also not the entire network, it's just still under trial. So you have to stand and wait, and if you were lucky, you would get a bus. So you never know at what time it arrives. So, with this, we realized that the decision makers for these bicycles weren't the end user itself. So we've realized that you know we have to communicate in a certain way to appeal to the decision maker, but with regard to design, we've always had to because the decision maker sometimes also might be price conscious. But uh like I could give you an example in in Sri Lanka, a lot of the ladies wear sari or skirts, you know, they have these long skirts. So, something my dad uh you know innovated, he came up with something called a sari guard, it protects basically their long dresses not getting stuck into the the drivetrain or the bicycles, uh, you know, the the wheel, the spokes of the wheel, yeah. So these type of things uh I think uh my dad did a lot of this you know, user-level innovations in terms of safety, in terms of differentiations, but the rideability was different. So we need to understand, you know, if because again what we export to Europe, uh the demography of their structure, the height varies uh because bicycles are like clothes, so it's it's made to uh not just bicycles, uh e-bikes, these mobility products are made to fit to a certain height range, so you need to understand uh who you're selling it to. Um to work for a European or US market, you can't just uh copy-paste it to Sri Lankan market uh because average height of ladies are significantly lower than the the norm. And it it varies even between the country itself. Certain regions the height is significantly lower than different parts of the country as well.

Dr. Leeanne Aguilar 27:19

Okay, interesting. So you've got to really understand the demographics of the regions, it's not just the countries as a whole, but different parts of the country have different demographics, and so you're adjusting to the needs of the people in that area when you're selling your products and marketing your products, you know, as well. Yeah. Now you've implemented creative sustainability initiatives like converting factory energy systems using recycled materials. How do you approach innovation that balances efficiency and environmental impact?

SPEAKER_01 27:49

Um, so as I said earlier, like you know, we've had this focus of uh the bottom line. I would like to say that, you know, uh, and it was not just the bottom line, one was the bottom line, the other one was uh being a family business, this factory was uh situated in where our extended family lives even today. Um, like the neighbors and all of them are my either my father's aunties, cousins. So we were forced to be extremely quiet. One thing because we can't be really loud and you know, uh disturb the neighborhood. Pollution also we've had to uh especially for the furnaces like heating, it uh emitted basically the fumes. So we came up with some creative solutions, you know, to trap the larger carbon particles so that only you get clean air being emitted. And Sri Lanka, we're not very we don't have a very tightly knit uh environmental policy that these uh factories have to adhere to. Everything could be paid and you could have a perfect bill of health uh with regard to your documents without having to actually uh do anything. So, but because of these focuses of our bottom line and as I said, being in this region amongst family, so we were uh forced to look at sustainable solutions to make sure that the manufacturing didn't really harm the environment. Right.

Dr. Leeanne Aguilar 29:17

Yeah, I guess that makes a difference when you're living in the community and your your family and loved ones are in the community with the factory. You want to make sure that you're not not doing harm and that you're respecting not only the environment but the noise levels and and you don't want to disrupt the quality of life for for those around. So can you share how partnerships like with Uber Eats writers have influenced your product development and real world applications?

SPEAKER_01 29:42

Definitely. So we've uh work with the likes of uh Uber Eats, Zahat, just to name a few. Uh so we've got some really uh unique insights. I think uh one of the relationships that we had, like I would give a good example, is like say Pizza Hat in Sri Lanka. They had a uh a motorbike they used to give to the employee in three or five years that motorbike became the that employee's property, so it made them to take care of these bikes and you know make sure it's kept really well. But when these e-bikes were introduced, they weren't really big fans of it because for them they always thought the motorbike was superior, and uh the way they maintained it was we got a lot of strange issues we've never had before. And I I I would give another example is uh when you take Uber Eats, so Uber never owns property, but they uh awarded this to their best performing riders, but because these uh bikes were owned by some of the top performing riders, and as per Uber Eats in Sri Lanka, they said some riders even do up to 250 kilometers a day. Again, this is the same bike what we gave to Pizza Hat and Uber Eats. Um but because it was their own property and it was their uh you know means of income. The issues that we uh you know, even they rode 250 kilometers, we get far less issues than when we gave it to uh the likes of the Pizza Hat uh employees. So it made us uh it gave us unique insights on how we should uh approach design, durability, and make sure that sometimes it's not just about just thinking about the utility of it. You need to understand because the Uber Eat riders compared to because in Sri Lanka, at least Pizzahat employees are, I would say, well respected, they are well uh you know very presentable and they have a very stable job, I would say, and uh a good career progression. Whereas Uber Eat riders were university students, they were doing part-time jobs. There were a few people who did it full-time. Uh so some of the issues that they spoke about were, you know, or what we observed that people didn't really respect them or really even speak to them. They just gave the money, took the parcels. So some of the design decisions that we took, we decided that you know we need to make this stand out and empower them, you know, make them feel part of the discussion. And uh so we have a lot of testimonials after supplying the bikes. The that sometimes the police stopped on the road and it was not to find them, but they were like, you know, can I have a test ride on the e-bike? Because uh wow, uh and then uh he said they used to say that a lot of big vehicles used to put the shutter down and ask, you know, how is it, what is it, you know. So and really big hotels that when they had to deliver cakes or from the they had to stop in the parking and they had to walk to get into it. But the I would say the valet or the people at the entrance, they were like, No, it's okay, you can park it here because it it was a conversation starter, it gave them, it empowered them. It's not the typical design that you see uh Uber Eats have done around the world because there were many examples already done, and that was also the request to us to do it similar to what was done in one of the other developed countries. But I think we were very adamant to say that look, we really believe that you know we need to do something different and think about our Sri Lankan riders again. With my example with Pizza Hatis, is not to diss them or anything like that, but I'm just trying to uh you know show that you need to get them also to understand the employees because the business decision making was it was very cost effective, it was very you know, especially with the fuel used to spike up, go down. Sri Lanka, the prices of fuel is significantly high to what you just see on the uh what's published globally. So the decision makers saw the business uh you know the the expense, the the uh money saved, but but there were a few branches uh within Sri Lanka itself that really enjoyed the ride because they got that same level of uh you know appreciation, especially the rural branches that were not in the main city centers.

Dr. Leeanne Aguilar 33:52

Yeah. But what I find interesting about your example with Pizza Hut versus Uber Eats, so it's so even though you're creating bikes for the similar purpose, which is food delivery, that you're creating bikes and differentiating based on how the employees treat the the bikes. So those employees who have a vested interest, like the the Uber Eats drivers in this situation, even though they don't have as much respect, I guess, or as high a perception in the in the community, they treat their property better, they treat the bike better because it's ultimately going to be theirs. It's you know their property, so they treat it better. Whereas the the Pizza Hut drivers don't have that vested interest, and so they don't treat the bikes with as much respect. And so you're modifying the bikes accordingly based on how the the employees treat the the equipment. Yeah, that makes sense. So it's it's not just use, but it's it's uh treatment of the you know of the bikes. Yeah. Now you've also integrated systems like IoT and advanced ERP platforms. How has data transformed your operational decision making?

SPEAKER_01 34:56

So I think my uh previous uh example beautifully ties up with uh this question of yours. Because in order for us to take better decisions, most of the time we don't deal directly with the Uber Eat riders or even the Pizza Hat riders for that instance. So we've realized how do we start getting the right asking the right questions so that we get the right answers? Because if we just uh got feedback for the sake of feedback, it was again someone else's assumption tying back to our dealer distributor relationship because they told us what they thought was right, but then we realized that we need to structure better questions, better data points to understand. I think an example was let's say a bike that needed to be serviced. Like if we had a data log of when it was last serviced, we could uh we've given basically uh guidance to our team. Okay, if this bike with such and such serial number returns, it's coming after a certain number of kilometers covered. It is due for XYZ related either consumables or repairs or areas to be concerned about, be it the braking system, be it the tire wear. So we've always uh tried to set up a proper methodology to get the right answers, I would say. So I think IoT and the ERP system enabled us to simplify this because once you start getting a lot of manual data, it becomes another uh big issue as well.

Dr. Leeanne Aguilar 36:23

Yeah. So how are you you're tracking all of the data from your different bikes and then you're using that to make decisions as far as production decisions and incorporating costs and that kind of thing as well?

SPEAKER_01 36:34

Yeah, so uh I think so. We've annually we've sold over hundreds of thousands of bicycles just for the domestic market, and we used to give this warranty card with every bicycle for the end user to fill it and post it to us with their details in order for them to get the uh relevant uh warranty. So some products we give lifetime warranty, some we do 10 years, 15 years. So we have extremely long uh warranty programs. So they used to post uh so you could only imagine that you know every month when you get tens of thousands of posts with uh people's details, you need additional people just to sit and enter this data into the system. So for over 10 years now, I think my brother implemented uh a means of tracking basically, you know, when this bicycle, which assembly line manufactured it, which lorry delivered it, and basically who the salesman, the dealer, and all of it. So the idea was to link this uh you know end-to-end part. So right now we know where it was purchased from, and now the goal for us is who is riding it, so that we could uh again, it's it's also a requirement when we export to USA and Europe because they need uh, if ever there was an issue, they want you uh to go through the like CCTV evidence, basically traceability.

Dr. Leeanne Aguilar 37:52

Right.

SPEAKER_01 37:52

So those gave us some foundations to further making sure these data points are accurate.

Dr. Leeanne Aguilar 37:58

Yeah. Now manufacturing often struggles with automation. Where do you see the balance between human craftsmanship and your robotics in your operations?

SPEAKER_01 38:07

So having visited a multitude of factories, I think I generally take China as an example because every two or three years I visit, I see significant changes done within the same factory just because a lot of people have this assumption that Chinese is cheap labor, but I I think that's extremely wrong because they're paid significantly high and very but they're extremely efficient if I'm to uh and they're very very hardworking. Most of the uh employees, especially in these Chinese factories, they don't um live near the factory, they're from states further away, so they're in the dormitories and they're living on the premises or close by. So they only come with this intention to earn because the cost of trend going back to their cities and coming back is something they don't even do every month, they do it maybe annually or quarterly. Yeah, so this insight of uh because again our factory we have a a larger population from a closer region, basically more than from away. So when that's the case, you know, as with our day-to-day lives, someone fell, someone child got hurt, you know, there is something stopped working at home, and you need to so all of these attendance, absentism, it was very difficult to track. So we use automation mainly, like uh there are some jobs that require a lot of skill, and some jobs are very easy to deploy. So, what we do is we generally, like I said, see what's been used in China, and we tend to have the same equipment in Sri Lanka. So, an example would be if you take our painting facility, we have robots to paint almost 95% of the components. The reason is uh humans can get fatigued, they might hold the gun in a different angle. So, in order to have consistency, the robots always made sure it was everything was the same. There was very almost no differentiation with uh batches or the production, whatever it was uh being produced. Right. Um, and when you take uh let's say the assembly line, it requires a lot of manual labor. I'm yet to see even a factory in the Netherlands or wherever globally them uh automating this process.

Dr. Leeanne Aguilar 40:22

Very task-specific. Yeah, I'm hearing those tasks like painting where it requires a lot of consistency where humans can't sustain the amount of time it needs to really paint the entire bicycle and it and there's a lack of consistency, and then that's the kind of process where robots are best suited. But or other processes that are more how would you describe those processes where robots aren't a good fit?

SPEAKER_01 40:46

So, as uh what we humans are really good at is troubleshooting. We know how to figure it out, you know. Like robots, you need to set parameters and they're very good at repetitive tasks, which could keep on doing the same thing. So, like when it's in a assembly line, things are happening at a extremely like for example, we produce some models even 30 to 40 seconds, uh, every 40 second or 30 seconds a bicycle completes out of the assembly line. If I were to give you an example, so that that's nearly around 60 to 120 bikes or e-bikes per hour. And a 9 to 10 hour shift, you know, it could average anywhere between 400 even to nearly a thousand bicycles or e-bikes. Again, it would depend heavily on the the process, and but there is a lot of uh figuring it out because these are very intricate. Uh you know, you need to figure out the tension levels, you need to figure out how to align the brakes, making sure the newton meters of torques are met in every bolt so that you know it's not overly tightened, or the machinery is there to make sure that the respective machinery maintains a certain Newton meter of torque, but then uh aligning that bolt because there's a lot of intricate parts in a build of material on a bicycle, e-bike, or cargo bike.

Dr. Leeanne Aguilar 42:05

Okay, so it's like the intricate processes aren't really great for robots right now. So humans are really the stronger fit for those kind of uh processes when it involves like the intricate parts where you have, like you said, a lot of decisions to make, and and yeah, that's interesting. So, with strong export growth into Europe and beyond, what are the key challenges in scaling globally while maintaining quality and cost competitiveness?

SPEAKER_01 42:29

So I think uh main challenges would be is again waking tomorrow and seeing if uh Trump has put a different tweet and we've lost all the benefits that Sri Lanka had. So as I said, it's uh uh we have started uh this resilience of you know trying to not put all our eggs in one basket. So we're trying to diversify our portfolio and make sure that be it products, be it markets, so we're trying to diversify our portfolio across uh USA, uh Europe, Sri Lanka and India and uh you know the region like Maldives and all of that. So we are uh trying to keep a spread so that if ever something happens that you the shock will only be minor rather than taking down the whole company with it, you know, so that because all this effort put into keeping it because we want to grow sustainably year over year, we want to have this uh forecast. Like we've been growing almost over 100% year over year, but it's only because of uh spreading our risk across uh different markets and different product segments, right?

Dr. Leeanne Aguilar 43:26

Yeah, that that makes sense. Like lowering your risk, mitigating that risk and diversifying. Yeah. So as you expand into battery swapping and electric vehicle ecosystems, how do you see your business model evolving over the next few years?

SPEAKER_01 43:40

So uh something that I've always I think even before I joined, I remember very clearly asking my dad this uh question, you know, Sri Lanka, let's say we have 24 million population. What happens when all 24 million owns a bike? Who are you going to produce for? So I've had this uh fear, or I don't know uh how to coin it better, but because Because our product is not a consumable. When people buy it, they don't change it the next day or the next year for that matter, unless it's a kid's bicycle. And also when people are deciding to buy a uh a vehicle or a car for that matter, you don't uh it's not an impulse purchase most of the time. You've done your research, you've asked people that you trust, you watch YouTube videos before you'd make a decision like this. Because in in Sri Lanka, let's say kids' bicycle, some stories that you know the kids have been okay, you get X amount of A's in your coming exam and you'll get a bicycle, or it's you know, when you turn so and so age on your birthday. So it was always something you know planned for. It was not something that you saw it at the shelf and I need a bicycle tomorrow.

Dr. Leeanne Aguilar 44:43

Not an impulse by, right?

SPEAKER_01 44:45

Not an impulse by, yes. So with this, we've always understood that the revenue also has to be in some shape or form something that is predictable. So that the reason we're moving into the battery swapping is because battery as a service, so it's it's a recurring revenue. So uh whatever the effort I put today, I could the next year that same effort has not lost. I don't have to find the same set of new customers. That customer is already in my foreseeable future if I do a good job. They will be retaining with the service because they'll be paying for almost like a petrol station. Or here in Sri Lanka, we get gas in bottles where we don't own the bottle, but you give your empty bottle and you get a new bottle back. So every time people use it, it's a recurring revenue of sorts. So the more people are using it. So I think that next stage, because of as I said, we've been growing 100% year over year. Now it's coming to a point where this growth requires more, how to put it plainly, a stable source of uh you know revenue which could be predictable and which could be continuously growing.

Dr. Leeanne Aguilar 45:50

Okay, so you're seeing the the risk of market saturation and that not as many people potentially will be buying bikes just because everybody will will have one. And so the the demand will decrease for that. So you're seeing an opportunity for a sustainable revenue source with the batteries or battery swapping. Yeah, so diversity going into that.

SPEAKER_01 46:10

So there's there's plenty of demand, uh, if I were to put it uh plainly, like just for bicycles. If all the factories in Sri Lanka got together, I don't think we can even cater 15 or even 20 percent of uh USA's demand itself. Uh so I'm I'm not uh uh ignoring that you know there are uh a huge amount of uh demand existing, it's just that uh for us, we we've always thought of our home country as our sandbox. We get to test, play around, or innovate, and it was uh the effects or the learnings, and we could you know iterate in a controlled environment because we had uh you know access and we have over 300 dealers island wide. So if anything, we have our own fleet of vehicles, we could manage an issue here. But the moment we start going globally, the cost of an error or some issues could be very significantly affecting the profitability of the business. So uh what we're doing now is we are deploying it in Sri Lanka with the hopes of getting it to other parts of the world. And the intention is because Sri Lanka, the cost of imports are extremely high, like vehicles can range anywhere between 300 to 500 percent in terms of taxes. So the people's, I would say first vehicle, not including the bicycle, a new motorbike would cost anywhere between $2,000 upwards, and uh a three-wheeler is around six thousand dollars upwards. And what we are trying to provide is affordability because we've done the first pilot project of World Bicycle Relief. We partnered with uh World Vision to do for tsunami some bicycles. So it was like 24,000 bicycles donated to victims affected by the tsunami. They did a post audit and the impact that a bicycle or a motorbike as to how fast they compared it with someone who didn't get this and how long it took them to recover in terms of financially and in every sense. So this report gave us a lot of insights on how important mobility is, especially in countries like ours, Africa, India. It it it brings you, it gets you access to the markets, it gives you access to education. Because even our bicycles are used by the entire family. It's not one bicycle is shared by the children for school, it is used by the parents for work or getting the goods from the markets. So we've always had this uh understanding of how vital mobility is, end of the day.

Dr. Leeanne Aguilar 48:42

Yeah. And you mentioned you're building solutions not just for mobility but also for accessibility and affordability. How do you define success then in emerging markets like Sri Lanka?

SPEAKER_01 48:52

I think uh we've had this one of not looking at what our competitors do. What I mean by that is we've always had this uh clear goal that what Lumala stands for is we're not cheap, but we are affordable, but we want to provide something that's durable. And even our branding materials, whether it was uh the spare paths that we sold, the design, we've always put this attention to detail that sometimes you don't even see in extremely high-end components. I could give you one example of uh there's this very big brand called uh Shimano, these are like Japanese uh bicycle paths, they tend to use a very standardized packaging across their lineup. But we made it a point that you know ours is extremely the detail I know nobody's gonna see it, but our thinking is whoever is paying good money needs to get a very good service or a very good uh experience and make them you know continuously feel good that they took the right decision. It's not just when they bought the product, but continuously reminding them that you know that they they took the right decision.

Dr. Leeanne Aguilar 49:53

Yeah, right. So they feel supported, they feel valued, and uh yeah. So finally, Tariq, for leaders navigating legacy businesses in rapidly changing industries, what advice would you give about driving transformation without losing core identity?

SPEAKER_01 50:09

I think the advice that at least for me, what I realized was like you need to mainly understand all aspects of the business, especially if you're in a role of uh decision making, or get someone who is a co-founder or a partner who understands because I I I think my job is right now is a glorified HR manager because I'm looking to build a team that's better than me in every aspect of the business, be it finance, be it marketing, be it sales. So I think I'm putting a lot more effort, but the only reason I know how valuable it is and how to because it doesn't matter how good someone is, you need to every business, every there are different cultures in business, different, you know, there is politics and handling people in a different way. So we should always uh by understanding your operation in every sense of it, you know, like in every from the bottom right to the top, it gives you uh ability to guide someone new, doesn't matter how well experienced they are, how to uh work in a certain environment. So currently we have around 300 employees, we don't want the balanced 299 to detest a Monday morning because of one person, because this toxic culture also can affect uh people's morale, and you know, humans are very emotional beings, you know. We need to understand how because different people are working for different reasons. Some people are working for as a you know, especially if it's their first job, sometimes it's never about worrying about kids and family, but there are people who have families on their shoulders and they are, you know, day in, day out, maybe doing a repetitive task sometimes, or in our case, sometimes most of the time. Uh so we need to make sure that you know that they feel part of the team. Yeah, yeah.

Dr. Leeanne Aguilar 51:55

No, that's a lot of a lot of great advice. It's all about who you surround yourself, you know, from the the top down. And like you said, one person can can uh impact the entire team and impact the morale and also your leadership, just choosing people or how being surrounded by people who are no more than you, who bring something, you know, really valuable to the table. And then also, I guess, maintaining that humility is what I'm hearing too. So you're always open and uh willing to to hear what people are are contributing and and see their value and make adjustments, you know, according to what they need. Because yeah, like you said, we're all emotional beings, we all have needs, and the more you um listen and attend to those needs, the more productive the the factory is gonna be at the end of the day. Everyone benefits, it's a win-win situation. Well, Tariq, thank you for joining us today. How can listeners learn more about you and Lumala?

SPEAKER_01 52:47

Also, you can search for Lumala in most of the social platforms and we are present in them. So we are on Instagram, TikTok, LinkedIn. We just search for Lumala, I think. But it's a very unique name, so there's very low chances of you going to another site.

Dr. Leeanne Aguilar 53:01

Right. So yeah, reach out and look at export to the United States, to uh Europe, and how many countries are you exporting to?

SPEAKER_01 53:09

India, India, Maldives, yeah. But the larger ones are I would say uh Europe and USA are primarily.

Dr. Leeanne Aguilar 53:15

Oh, great. Well, thank you again for joining me. And to our audience, thank you for tuning in to Industry Ignited. Be sure to subscribe and join us for the next episode. Until next time, stay bold, stay curious, and keep igniting industry.