Sharing bicycle destroys Giant 60% sales in China market

Sharing bicycle destroys Giant 60% sales in China market

Author: Qian Tongxin

"Sharing bicycles has a big impact on us. 65% of our sales are gone." Last week, Du Xiuzhen, chairman of Taiwan Giant Group, a giant bicycle manufacturer, revealed in an interview with First Financial Journalist at the annual "Ten Rules Dialogue" sponsored by Yida Group.

Giant Group is one of the largest bicycle manufacturers in the world. Giant has six factories in mainland China, located in Kunshan, Tianjin and Chengdu. In the past, Giant sold 3 million vehicles a year in mainland China, but last year, it sold less than 1 million vehicles a year because of the impact of sharing bicycles and other factors.

"In the past, a Chinese company supported the production of the whole world. These factories manufactured and supplied most of the products of Giant in the world." Du Xiuzhen told First Financial Journalist, "This model will change in the future. We should turn more to short-chain supply and respond to the market quickly."

However, the share bicycle market in China is also beginning to be cold, and some enterprises have been unable to make enough money, even the supplier's arrears. First Financial Journalist recently found that on both sides of the expressway, all kinds of discarded shared bicycles piled up like hills on the roadside, unmanned.

The mode of sharing bicycles has become popular all over the world. For example, there are CitiBike in New York, Jump Bike in San Francisco, Velib in Paris, OBike in Berlin and so on. And more and more shared bicycle platforms are investing in shared bicycle companies because of their preference for low-carbon and environmentally friendly travel, such as Uber's recent acquisition of JumpBike with Google, and Uber's biggest rival in the United States, Lyft, has also invested in shared bicycle Motivate.

The demand for sharing bicycles in European and American cities has also boosted the export of bicycles. Huge Group's latest quarterly earnings released this month showed the best performance in Europe, with double-digit revenue growth in the first three quarters, driven mainly by demand for e-bikes in the market. Giant electric bicycle sales increased by more than 40%.

According to EU statistics, the number of E-bikes exported from China to EU tripled from 2014 to 2017, accounting for 35% of the market share of E-bikes in the EU, while the average price dropped by 11% in three years. As imported electric bicycles have severely impacted domestic bicycle manufacturers in Europe, the European Union has begun to study a tariff on imported bicycles ranging from 21.8% to 83.6%, which will be implemented next year, while the tariff on imported bicycles of Giant may increase to 27.5%.

In this regard, Du Xiuzhen told First Financial Journalist that in the future, we will consider increasing the mode of localized production and direct sales of origin. At present, Giant owns Holland plant in Europe. Next year, Hungary and other new factories will also be completed.

On the other hand, considering the uncertainty of Sino-US trade frictions, giant groups are also assessing the possibility of setting up factories in the United States. However, Du Xiuzhen confessed to the first financial reporter that it would take a long time to move the production line, and also need to take into account factors such as the cost of parts acquisition and so on. At present, there is no specific schedule for the establishment of factories.

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