Manufacturing News

Bicycle makers see strong sales amid pandemic

Social distancing requirements and desire to stay fit create new growth avenues for firms

Chinese bicycle makers are seeing rapid growth in overseas orders as the COVID-19 pandemic has transformed lifestyles for many people, and demand for social-distancing transportation and exercise rises, according to industry insiders.

"In 1994, Phoenix Bicycle reached a historic sales peak of 5.51 million units that it wouldn't achieve again for more than two decades. But this year, we expect to rewrite this record," said Ji Xiaobing, vice-president of Shanghai Phoenix Bicycle Co Ltd.

Worldwide sales of Phoenix in the first 10 months this year had already surpassed 5.51 million units.

The company's shares have been witnessing robust trading on the bourses recently.

Various factors are backing the capital market to buy into the Shanghai-based bicycles brand. One is the surging demand from home and abroad for its bikes amid the backdrop of the pandemic, and the other is China's quick recovery in economic activity and its complete industrial chains.

Like Phoenix, other major bicycle manufacturers have been seeing soaring sales over the past few months.

"Since July, we have seen an average of thousands of new orders per day, with the majority placed by customers overseas," said Li Qing, president of Easy-Try Cycles (Tianjin) Co Ltd.

Currently, Easy-Try clients need to wait about 100 days to receive their bicycles, and the Tianjin-based company is striving to deliver another 100,000 models by the end of this year.

Likewise, Guangdong province-based TAILG Electric Vehicle Co Ltd is working against time to make and ship their electric bikes and scooters to domestic and foreign buyers.

"Our schedule is booked up until 2021, and the earliest delivery date for any order placed today is 120 days later," said Zhu Wenqing, general manager of export production with TAILG.

The trend is similar for Shanghai Forever Bicycle Co, which saw an alltime high sales in the first 10 months, registering a year-on-year growth of 70 percent.

"During the period from January to October, Forever's sales of bicycles surged 70 percent and electric bikes grew 22 percent. Our profit increased more than 70 percent, and we sold out up to 200,000 units of products online during the Double 11 shopping festival," said Miao Dan, director of branding with Shanghai Forever.

"Facing the unprecedented need for bicycles, it is only possible for Chinese manufacturers to make delivery because China has brought COVID-19 under better control across the nation and has a complete production chain in place," said Qi Xiaozhai, director of the Shanghai Commercial Economic Research Center.

China's effective measures in containing the contagion enable the country to resume production, and the country became one of only a few nations reporting positive economic growth in the third quarter worldwide.

In the meantime, thanks to the nation's complete manufacturing system, Chinese bicycle makers have formed competitive capabilities in production, technology development and cost controls, said Qi. From January to September, $5.09 billion worth of bikes, electric bicycles and components were exported from China, a growth of 6.8 percent from the same period last year, said the China Bicycle Association.

Affected heavily by the COVID-19 pandemic, overseas bicycle manufacturers have suspended production. But the contagion also led more people to shift from public transportation to bicycles or electric bikes for health concerns, according to Zhu. As bike stocks were depleted, Chinese makers suddenly received an escalating amount of orders.

A bicycle often cannot be ridable with the absence of even a single component, and the manufacturing of bikes needs dozens of parts and components, and therefore a complete supply chain, Zhu said.

Chinese manufacturers had already made quick responses to the surge in demand. As many as 18,538 new bicycle manufacturing firms were registered in July, 15,540 in August, 15,730 in September and 11,024 in October, reported the Securities Times, citing data collected by business information provider Tianyancha.

"In order to meet rising demand, our employee numbers have nearly doubled in comparison with the amount before COVID-19," said Li with Easy-Try Cycles. He added that with the support of Tianjin's Jinnan district government, the company has secured a plant of about 10,000 square meters, and a new electric bike production line is projected to begin operations before the upcoming Chinese New Year.

Thanks to safety concerns and local government support for sustainable transportation solutions, Ji with Phoenix Bicycle believes overseas consumers' preference for bikes for daily transportation is going to continue over long term. Phoenix Bicycle therefore plans to considerably increase its exports in the coming years.

In July, Phoenix Bicycle made a public announcement saying that it would take full ownership of Tianjin Aisaike Bicycle Co Ltd and Tianjin Tandem Bicycle Components Co Ltd, both of which have a presence in overseas markets.

The merger and acquisition of Aisaike and Tandem will not only enhance the Shanghai-based bike brand's export capability, but also make Phoenix a world-class bike maker, Ji added.

Challenged by the contagion, Shanghai Forever Bicycle decided to carry out industrial upgrading, sharpen technology and innovation capabilities and optimize production targeting broader and younger generations, said Miao.

Bikes are not merely a transportation modality, but also a preferred means of exercise. In the meantime, products can vary in terms of meeting different niche requirements in accordance with separate age groups or functions, Qi said.

"Answering the call to meet complicated demand contains tremendous opportunities for innovation and exploration," Qi added.

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