Advanced Sports Europe GM Van Hoogstraten on Omni-Channel
MUTLANGEN, Germany – Advanced Sports Int’l (operating Breezer, Fuji, Kestrel, Phat Cycles, SE and Oval Concepts brands) has a close partnership with Taiwan bike maker Ideal. Advanced Sports Europe has for that reason close ties with Ideal Poland. This raises questions about the benefits of close to market production which are answered in this interview by Advanced Sports Europe GM Armin van Hoogstraten. Next to that he reveals the omni-channel strategy of US based Advanced Sports Int’l.
Bike Europe interviewed Armin van Hoogstraten for its August 2017 print edition. The complete text is published here.
Big changes took place at Advanced Sports Int’l (ASI) last year. The company took over the largest retail chain in the US named Performance Bicycle as well as webshop Nashbar. It spurred the creation of a new holding company named Advanced Sports Enterprises (ASE). Its subsidiaries Advanced Sports is operating the brands while Performance Inc is the retail division. What all this means for the European operation of Advanced Sports, Armin van Hoogstraten explains.
Please tell us more about the European operation of Advanced Sports.
Currently the Fuji brand is distributed in 27 countries in Europe including Russia. In 9 countries, we operate dealer direct with our own sales force in the Western EU markets as well as Poland and Slovakia. In the other countries, we work through sales agencies and distributors. We operate a central European warehouse in Bremen, Germany. Dealer direct operations are handled through our office in Mutlangen where we have dedicated native speakers assigned to the different markets. We have 23 people from 8 different countries working in our Germany office.
What models Advanced Sports Europe GmbH is offering on its markets that are assembled at Ideal Poland in Kutno?
At the moment we are producing all city bikes, trekking bikes and e-bikes we offer under Fuji and Breezer brands at Ideal Poland. These bikes are assembled 99% ready to ride which is a huge benefit for dealers. Assembly quality and assembly level is becoming a real sales argument and with our production at Ideal Europe in Poland we can make this argument.
There’s a lot happening in bike retailing like the take-over of a retail chain by ASI in the US. What’s happening in Europe; is ASI in Europe moving towards an omni-channel strategy?
Yes, we have a solid plan and omni-channel strategy for the future. Advanced Sports Int’l invested in 2015 in Norwegian Birk Sport retail chain with 9 stores and a solid online business. This was our first investment in the omni-channel strategy before the Performance acquisition in the US in 2016.
Are ASI and Ideal Bike Corp. still closely related with Ideal having a minority shareholding in ASI?
Yes, there is still a close relationship between both companies. With Ideal factories in China, Taiwan and Poland, they are the perfect partner for us as we can service our customers worldwide through one of those factories. We are always close to the market. Ideal first invested in ASI in 2004 and Ideal increased its investment in 2016 to support Advanced Sports’ acquisition of Performance and Nashbar.
In 2013 Ideal was the only bigger bike maker that got an exemption on the 48.5% anti-dumping for its bicycle export from China to Europe. Was and is this a huge benefit?
This was a benefit because Ideal China is the biggest factory in the group. From 2013 on we could use this factory also for our European customers. We want to state clearly that we got the exemption because we run the company in China according to high company and industry standards. The main benefit is definitely not in the pricing as we have to compete with factories in countries that can export even without import duty.
You have been Ideal’s European OEM sales manager. Currently there’s lots of talk about increasing speed to market and supply chain flexibility. Does this result in a growing number of OEM customers for Ideal in Poland?
We see an increased demand for production in Europe. Next to currency issues this is caused by the demand for increased speed to market, and supply chain flexibility. Internally, we have optimized our processes to secure that we can handle complex projects in shorter time windows. Modern e-bikes with integration or high-end carbon bikes require much more engineering, testing and planning than bikes even a few years ago. Forecasting has become the keyword for supply chain flexibility.
What is the leadtime difference from order to final delivery for you when producing in Asia and when producing in Poland?
The honest answer is that at the moment there is almost no difference. Most of the frames we use are produced in our factory in China and we still need a lot of Asia-produced parts for every bike we assemble in Europe. These parts determine the leadtimes. Carbon frames have longer leadtimes than alloy frames for example. Summarizing I can say that in China and Taiwan we can produce a bike, on average, 3 to 4 weeks earlier than we can in Poland. With an average shipping time of 30 days to Europe, this advantage is eliminated.
Where else do you see the major benefits of your close to market production?
The major benefits are cost-related and are in logistics. Shipping from Asia is relative expensive. Shipping from a European factory makes the logistics easier and lowers transportation costs. Ideal Poland’s annual production capacity stands at around 100.000 bikes and we currently have a staff of 120 people. The main focus is on assembling e-bikes as well as mid to high-end road, MTB and city/trekking models. Our own carbon/ alloy & steel frame production in Ideal China and our state of the art in house painting facilities, guarantee our customers stable leadtimes and quality.