Switch to E-Bikes Slowly Paying Off for Giant and Merida
TAIPEI, Taiwan – Giant and Merida posted revenue declines for 2017. As the main reason slow sales in China is named. But the outlook for Taiwan’s two biggest bicycle manufacturers is positive thanks to the growing e-bike demand in Europe, as both companies reported.
Giant Manufacturing Co. Ltd reports in its financial statement a drop in sales of 3.8% year-on-year to TWD 54.83 billion (EUR 1,528m). Merida’s revenue fell 2.08% to TWD 22.35 billion (EUR 623m), according to the report in the ‘Taipei Times’. Though Giant stated that their e-bike export volume to Europe increased by 40% last year, the exact export number to Europe remains unknown. Merida’s e-bike export to Europe increased by 56% to a total of 65,000 units in 2017.
A company study by Citigroup, mentioned in the Taipei Times report, shows that Giant’s high-end e-bike sales in Europe is estimated to have increased by 35% to about 80,000 units in 2017, with an average retail price of more than USD 1,500 against an average retail price of USD 360 for conventional bicycles.
Accelerating e-bike sales for Giant
This study is remarkably positive on Giant’s market performance in e-bikes. Sales of this category are estimated to account for 9% of Giant’s revenues in 2017. While others anticipate on a rapidly expanding e-bike market in and outside Europe, also thanks to the growing e-MTB sales, Giant’s expectations in this product category have always been very cautious.
Only last year March Giant forecasted that its e-bike revenue share would increase to some 10% in the following five years. By the way, EU market leader in e-bikes – Accell Group – saw e-bike sales growing to over 40% of their turnover in 2016.
The bicycle market in China continues to lose its importance as a result of the increase popularity of the bike-sharing systems. Citigroup reports that “shared bikes have greatly eroded demand for commuter bicycles in China, while the demand for recreational bikes remains muted due to sluggish demand for commuter bikes. Against this backdrop, bicycle manufacturers might need to focus on operating and management costs, and no longer on production volumes like in the past.”
Citigroup notes further that “for Giant, China accounts for only 15% of the company’s total sales, compared with 27% in 2014.”