Armed only with an iPhone and a few spare minutes between meetings, Cycling iQ set off on a brisk ‘Tour de Halls’ to capture a selection of – road cycling oriented, as is the nature of this blog – images which hopefully would let readers get a feel for what’s happening “over there”.

Not quite as many halls as Eurobike, but just as daunting a prospect to walk around in a short amount of time. The pointy end of the “V” was the place to be – a brand’s visitor rate naturally plummeted the further away its booth was from here. Incidentally, the Shanghai New International Expo Center, where the show is held each year, is a 10 minute stroll from Pudong’s Longyang Road station.

The business end of the show. Between them, Giant and Merida are set to sell approximately 5 million bikes in China. Domestic sales are this year expected to account for more than half of Giant’s local annual production of 6 million units.

Great weather to be indoors.

China Cycle attempts to accommodate consumers along the industry’s entire supply chain – this exhibitor, a factory from Indonesia, had a booth promoting its “full in-house services” to new or existing bike brands looking to produce in that country.

The tagline couldn’t be much more self-explanatory really, but props are there all the same to visually underline the message.

Gammax Bicycle has not publicly disclosed how much it paid ex-NBA superstar Yao Ming to peddle (aw haw haw) its bikes, but his image still wields enormous influence. Who is Gammax? Click on the image to jump through to the road bike section of their website.

As garish as it may be to some, I found myself oggling this CKT 589 bike – as ridden by French UCI Continental team La Pomme Marseille.

Yep, I really liked this bike.

Giant’s global catalogue is comprised of over 700 models, but you will never see all of them in one country. The ‘Crave’ is a female-specific version of the popular ‘AnyRoad’ model which was launched in Taiwan last year.

Giant’s offer to its community goes well beyond simply supplying bicycles. Package tours are a growing part of its business in NE Asia.

Nope, definitely not approved by the UCI…

…but this one is! UCC has been the exclusive sponsor of the ‘Tour of Beijing’ since its inauguration in 2011. Each year, the company supplies 300 bikes for government officials and VIP’s to ride during a short parade which takes place before each stage.

Lansing’s sales representative assured me the company’s chromoly bikes are hand-built by expert local welders. The price of this machine is USD6,000; 15-20 times more expensive than the CNY1,500-2,000 price bracket in which most bicycles are sold in China today.

Tour of Qinghai Lake sent a rather fitting mascot to promote its billing of “Asia’s highest UCI stage-race.”

Soon to be worn by the GC leader of this year’s Tour of China.

Tour of Hainan leaders jerseys. Not for sale, I asked.

The house brand of a Taiwanese OEM, ‘Ranking’ supplies its helmets to several UCI teams, including AG2R, Tabriz Petrochemical Team and 361° Cycling, as well as being sponsor of every UCI AsiaTour race in China. This helmet was made especially for the 2012 Tour of Azerbaijan (‘Tour of Iran’ for 2013)

Many local brands prominently displayed their sponsorship of UCI AsiaTour races in, or in this case above, their booths.

Chinese cycling website/forum Biketo.com released a 1,000 page ‘Bike Bible’, explaining the history of cycling, servicing, bike fit, equipment, and other “how to’s”.

A sweet steel number from Japan’s Bridgestone.

Freelance photographer 视界 released a book with images captured over five years of shooting UCI AsiaTour races. It weighs a tonne.

CNY2,499 (USD400) will get you this road bike from Phoenix. It still costs 20% more than what most Chinese consumers will spend on a bike this year.

Held in May every other year, China Cycle will move to April in 2014. Whether it means there will be MY2015 models on display remains to be seen; some brands showed “MY2014″ models at China Cycle this year, but this is only superficial considering groupset manufacturers have not released their new products yet….

]]> http://cyclingiq.com/2013/05/18/gallery-china-cycle-2013/feed/ 2 CIQ 2013 China Cycle_76 cyclingiq 2013 China Cycle floor plan CIQ 2013 China Cycle_14 CIQ 2013 China Cycle_15 CIQ 2013 China Cycle_24 CIQ 2013 China Cycle_25 CIQ 2013 China Cycle_27 CIQ 2013 China Cycle_28 CIQ 2013 China Cycle_30 CIQ 2013 China Cycle_32 CIQ 2013 China Cycle_34 CIQ 2013 China Cycle_48 CIQ 2013 China Cycle_62 CIQ 2013 China Cycle_74 CIQ 2013 China Cycle_76 CIQ 2013 China Cycle_78 CIQ 2013 China Cycle_79 CIQ 2013 China Cycle_86 CIQ 2013 China Cycle_84 CIQ 2013 China Cycle_91 CIQ 2013 China Cycle_94 CIQ 2013 China Cycle_117 CIQ 2013 China Cycle_123 CIQ 2013 China Cycle_90 http://cyclingiq.com/2013/02/22/greeces-mbike-launches-sister-publication-for-vietnam/ http://cyclingiq.com/2013/02/22/greeces-mbike-launches-sister-publication-for-vietnam/#comments Thu, 21 Feb 2013 21:35:47 +0000 cyclingiq http://cyclingiq.com/?p=4574 Continue reading »]]> Marketed as Vietnam’s first and only dual-language cycling publication, MBIKE Vietnam’s inaugural edition is set for a March 2013 release and is intended to appeal to all Vietnamese cyclists, regardless of wheel size or tyre type. Behind the new venture is an expat who expects the omnipresence of bicycles in this 90 million-strong nation will ensure a successful future.

The MBIKE Greece team will lend publishing expertise to the bi-monthly MBIKE Vietnam magazine – which is expected to have a first print-run of 2,000 copies – and a website (not yet live) is also being finalised. However, it’s a Spanish expat, now happily married and ensconced in Vietnam’s capital Hanoi, that is the major force in the background.

MBIKE Vietnam’s Chief Editor, Guim Valls Teruel, first arrived in Vietnam in 2009, whilst on a bicycle “world tour”. A constant curiosity to locals wherever he went, he was also interviewed on Vietnamese television by a journalist with whom, in his own words “he felt in love and after 3 weeks using his Mediterranean flirting skills to seduce her, finally, he kept cycling alone…”.

Utlimately, Valls Teruel returned to Vietnam, married the journalist and somehow managed to convince his new bride to take a break from work to embark on a six-month cycling tour. Before their first child was born, the ‘The Hanoi Bicycle Collective‘ was opened. The uniquely-styled dual-level store, which is only a stone’s throw from Hanoi’s popular West Lake and includes a full-service cafe, has quickly become a favourite hang-out for locals and expats alike.

The Hanoi Bicycle Collective

Valls Teruel, who in person radiates the type of nervous energy expected of a restless soul who has a mind crammed full of ideas, sees MBIKE Vietnam as a natural extension of his investment into harnessing the local cycling culture. Though high-end road bicycles are definitely not the norm, an early-morning jaunt around the 15km perimeter of West Lake offers a startling – and often grid-locked – glimpse at the sheer number of people on bikes. But how will this translate into readers for MBIKE Vietnam?

“Is it hard for us to forecast number of followers and readers at this stage”, writes Valls Teruel, “but since MBIKE will be the first publication of its kind in Vietnam and considering the fast growth of cycling passion that main cities like Hanoi and Ho Chi Minh have experienced in the last 6 months, we do not have any doubts that our range of readers will be wide.

Our target is as wide as the Vietnam population can be. Vietnam is a country where 100% of the population knows how to cycle (all kids cycle and cycle to school), and it was not until 20 years ago when, mainly for status reasons, Vietnamese decided to change their bicycles for motorbikes. Not to mention the amount of expatriates that also cycle, or cycling tourism. There’s no doubt that Vietnam has a great potential to become a cycling country once again very soon.”

Cycling iQ will update readers on Twitter when the magazine launches. MBIKE Vietnam is also on Facebook and has a media kit available for companies interested in advertising. Guim Valls Teruel can be contacted by email here

Shot in the provinces of Qinghai and neighbouring Gansu, ‘阿米走步’ or ‘Ami Chogbo’ (a combined French-Tibetan transliteration of “friend”), is a narrative of conflict, inter-cultural friction and, ultimately, friendship between French coach “Pierre” (played by South African born, Beijing-based, actor Murray Clive Walker) and a group of local athletes he is recruited to train for participation in the Tour of Qinghai Lake.

Though it’s evident in the lengthy trailer (below) that the real-life Tour of Qinghai Lake does not feature in the film, Qinghai’s unique landscape will be familiar to anyone who has followed the hors categorie UCI stage race in previous years. Much of the film was shot in and around the Qinghai Duoba National High Altitude Sports Training Base; the “back yard” of local UCI Continental team Qinghai Tianyoude Pro Cycling.

Of course, no aspiring sports-drama is complete without a romance, so the relationship that develops between Pierre and a Tibetan nurse – after the former takes a parodically-wobbly spill on the boards of an innocuous-looking velodrome – makes a central contribution to the story. Whether China’s first bike-themed film might be the catalyst for a feature-length product about the real-McCoy remains to be seen, but a gritty Höllentour-style film may be required in future to counter the heady melodrama evident in ‘Ami Chogbo’.

Backed by the central government’s State Administration of Radio, Film and Television, the year-long production – which concluded in October 2012, and has reportedly since been entered into the 2013 Milano International FICTS (International Federation of Sports Television) festival – will be playing in select cinemas across China as well as on state television CCTV.

Click on image to jump to Biketo.com’s video blog

Video and featured image: Biketo.com

The festival, in its 5th year, is open to the public and features a road race, mountain bike race, BMX demo and more. This year, it took place from 16-18 November. Click here or on the above image to view the video blog on Youku. [Note: I'm having difficulty embedding Youku videos, hence the link]

THE BRIEF
Founder John Egger states the company brief is to “produce innovative high quality handmade carbon bicycles that delight their owners while reigniting bicycle manufacturing in the USA and creating manufacturing jobs which we desperately need in this country.”

MANUFACTURING ENVIRONMENT
According to a slideshow posted by Egger onto YouTube (below), less than 268,000 of the 19,000,000 bicycles sold into the USA in 2010 were produced domestically. In order to manufacturer a bike frame that is, in the company’s own words, “technically superior to the Asia imports”, American Artisan Bicycles (AAB) has engaged expertise from the Department of Aeronautics and Astronautics within Stanford University’s School of Engineering. Toray and Chomarat appear to be the main suppliers of raw materials.

INFRASTRUCTURE
Aside from focusing on its own brand of bicycle frames, AAB seeks to directly create manufacturing jobs in the USA via a multi-level operation which includes OEM competencies, a carbon frame building school and a  ’bicycle company incubator’ which leases out frame-building equipment to budding frame makers.

PRODUCTS
The current product range comprises two road bicycle frames; the base-level ‘Classic Carbon II’ (introductory retail price of USD1,495) and a sub-700 gram frame (52cm size) called the ‘Carbon EX’ (USD2,995). A rough 2D aero road frame rendering also features in the YouTube video, but this doesn’t appear anywhere on the official website. No specification page exists for either the Classic Carbon II or the Carbon EX, nor are there any images of complete bicycles, so it’s not quite clear what a prospective buyer gets. Poorly photoshopped images, inconsistencies in product warranty periods and pricing, and a sparse-looking Facebook page, hint at a very small core team behind what appears to be a major undertaking.

Screen grab from American Artisan Bicycle’s website, showing in-house manufacturing process steps.

CAN IT WORK?
Currently, it would appear the company is almost completely off the bicycle industry’s radar, let alone that of consumers. To achieve its desired outcomes in today’s ultra-dynamic marketplace, AAB will certainly need to invest in marketing expertise. The “nonprofit” missive is especially difficult to consolidate with the stated aim of becoming a “major American bicycle manufacturer”. The company might do well to also adopt the official Made In USA certification mark.

Definitely not the Cycling iQ office… but the UCI’s HQ will soon be just down the road from where I’ll be living.

As noted already, Cycling iQ began in September 2011 after I decided to take an introspective break from the commercial side of the bicycle industry. Some of my favourite things – cycling, traveling, market research, analysis and reporting – were distilled into my most recent role (international market manager at BMC), which ultimately informed me that; 1) few media outlets were focused on road cycling in Asia, and; 2) the fragmented global retail landscape of the bicycle industry was highly topical but not well understood. This made me believe there was room for a dual-channel blog that attempted to at least partially fill some information gaps. [Cycling iQ was never about me, so it's strange to be writing a personal post such as this].

A reasonable understanding of the bicycle industry lead to the ‘Vertical Limit‘ series, followed by articles about companies in the bicycle manufacturing sector. Though I already knew many of the larger factories by name, actually speaking with representatives involved research, countless overseas calls and emails. It was important to me that content was original and facts were obtained and/or corroborated from the source. In the following months, Cycling iQ was referenced by respected sites such as The Inner Ring, Bicycling, VeloNews, CyclingTips and Road, which made me believe the basic formula was sound.

The philosophy around original content also applied to the coverage of professional road cycling in Asia. I figured the best way to find out about these races was to go myself. As a new blogger with few media credentials, this meant burning through some savings. Attendance to my first race, Tour of Beijing, was self-funded, as were Le Tour de Langkawi (LTdL was the first race to pay for my on-site costs, which I am still incredibly grateful for) and Tour de Taiwan. I emailed or called other race organizers to see what assistance they could offer and became accustomed to receiving responses along the lines of “we have no budget for foreign media”. To be fair, any race organizer would be right to question what exposure a blogger in Australia could possibly give to a UCI2.2 stage race in Asia.

During my travels on the UCI AsiaTour circuit, I quickly learnt the value of good media contacts. It was through such a contact that I received an invite to be Tour de Korea’s official reporter in April 2012. Not only would my costs be covered, but I would be paid a small wage! On arrival into Seoul, I received a loaner Samsung Galaxy tablet and 4G network card so I could tweet and blog 24/7. Paradise! Not long after Tour de Korea, I was invited to perform a similar role at Tour of Chongming Island and Chongming Island World Cup. A certain momentum was developing and Tour de Singkarak was the next race to invite me along, but it clashed with another appointment. This brings me to the behind-the-scene changes mentioned above.

As a by-product of Cycling iQ’s scope I’d been keeping a constant eye on the bicycle industry job market, but knew a rare combination of factors would be needed before I personally leapt into a permanent role. Without going into unnecessary details, a casual conversation commenced a great dialogue, which led to an unmissable professional and personal opportunity. As of August 1 this year, I will begin working for Scott Sports based in Switzerland.

Most readers will immediately recognize the complications of working for a global bicycle brand whilst writing about the bicycle industry. I know that many bicycle industry insiders have found the market information presented in Cycling iQ articles quite useful. It also takes much time to research and compose the type of industry articles I enjoy writing. This could be called the ‘price of market intelligence’; on the one hand, market data is very valuable to brands and interesting to readers; on the other hand, it gives me less time to write about pro cycling in Asia.

Ultimately, I’ve decided the best way to avoid any perceived conflict of interest in future is to stop producing brand- and market-specific industry content before starting my new job. All current content will remain available as a resource. Cycling iQ will continue as a source for information on the people and places of the Asia-Pacific cycling scene, with a particular focus on the UCI AsiaTour. Better yet, I hope a regular salary will allow me to pay for more great images from people like Sonoko Tanaka, Aaron Lee and Mike Mokhriz. There will be less regular spare time for writing, but I’m optimistic this will result in the most interesting content floating to the top.

A huge thank you to all regular readers and visitors to Cycling iQ. It’s immensely rewarding to log in each morning and see so many different nationalities have visited the site. Special thanks to anyone who has referred readers or friends to Cycling iQ. Though I’m a little disappointed that lengthy industry-analysis pieces will no longer be a regular feature in future, the previous nine months have already been instrumental in informing me that the growing sport of cycling in Asia is a far more interesting (and accessible) area to write about. I hope you will continue to enjoy learning about it with me.

Cheers,
Cam

XiDengSheng Bicycle Co Ltd (XDS) RX800 road bike

According to CNLIC, the aggregate value of the light industry sector accounts for one third of China’s total respective industrial production value, tax revenues and export value and profits. Each year, the Council evaluates annual data submitted by its industry associates and their enterprises in order to define the leading companies in each of the 37 industries the Council oversees. In May, the list of 2011 industry leaders was published (below).

Recent statistics published by China’s Bicycle Association show the nation’s bicycle production reached 83.45 million units in 2011, representing an increase of 2.3% from 2010. Overall export value was USD5.26b, with an average unit price of USD260.9. Most interestingly, exports of ‘competition’ (racing) bikes grew 36.2% year-on-year. This demonstrates that ongoing structural changes within the domestic bicycle manufacturing sector are resulting in increased quality and high-end production capacity.

TOP 10 ENTERPRISES OF CHINA’S BICYCLE INDUSTRY, 2011
Giant (China) Co., Ltd.
Merida Bicycle (China) Co., Ltd.
Tianjin Golden Wheel Bicycle Group Co., Ltd.
Tianjin Fujitec Bicycle Co., Ltd.
Zhejiang Rebar Huang & Trade Group Co., Ltd.
Tianjin Colin Bicycle Co., Ltd.
XDS Bicycle Co., Ltd.
Shanghai Phoenix Bicycle Co., Ltd.
Middle Road, Co., Ltd.
Hebei strong long bicycle accessories Group Limited

MARKET CAP | SNAPSHOT

Has Giant been able to estimate how many bicycles are sold in China each year and where does the company get its data?
“Annual sales of bicycles in the Chinese market are stable at around 22,000,000 units. We get this information from the Chinese Bicycle Association.”

Giant China sales* (units):
2009: 1,380,000
2010: 1,500,000
2011: 1,870,000
*Not including electric bikes

Apart from Giant, what do you consider as two other nationally-recognized brands?
“Phoenix and XDS”

Giant also owns two other brands. Can you tell me about them?
“We have ‘Momentum’ (launched in 2010; 170,000 units sold since) for China and Taiwan. Momentum’s target customers are commuters, and the bikes are priced between CNY500-2,000. We also have Liv (launched in 2008; 30,000 units sold in 2011), which is a women’s brand, with matching clothing line and stores in Taipei and Tokyo. Liv is designed to bring fashion and cycling back together.”

What percentage of Giant’s annual production is allocated to mountain bikes and road bikes? Is demand good for both?
“Mountain bikes take about 47-48% of annual production; road bikes take about 5%. On the China mainland, production of Giant bicycles is not sufficient. The market here is huge and the economy is growing. So in the near future, demand will still be greater than production. So we need to focus on increasing our production. Remember we have also offer 700 different Giant bicycle models internationally.”

How many “high end” road bikes did Giant sell last year?
“We think road bikes above USD1,000 account for no more than 3% of all sales in China. Giant takes half the sales in medium-to-high end products in China; more than 10,000 bicycles (with a retail price above USD1000). The most popular price point in China is CNY2,000 (USD320).”

Five years from now, in 2017, what percentage of Giant’s domestic sales do you expect will come from road racing bicycles?
“It will change slowly. However, honestly, in the next 5 years, mountain bikes will still be the mainstream. The growth of road bikes depends on how the leading brands will lead the market. But in the next 5 years, it’s hard to see a booming point. Personally, I think it will be nice if road bikes can take 10% of the whole amount.”

Giant’s entry-level road bike in the Chinese market, the OCR 3700, comes with a recommended retail price of CNY4198 (USD660)

DOMESTIC RETAIL NETWORK

How many people does Giant employ to pursue domestic sales?
“More than 100. They are spread across our (Kunshan) head office and offices in the east, north and southwest China. They service more than 2000 independent stores around the country.”

In terms of retail development, you reportedly have more than 2,500 dealers in China. How are they categorized and managed?
“We have Tier A and Tier B stores. Nearly 100 stores are Tier A, the rest are all Tier B. Tier A dealers can open its own shops, and appoint new dealers. This applies more in areas like Shanghai, which has an intensive business network. We appreciate each dealer and we encourage dealers to learn from each other and make progress together.

Nationally, there are seven major sales divisions [Note: essentially, regional sub-distributors]. Retailers who belong to these sales divisions represent about 20% (500 stores) of the domestic network. There are 20-50 staff at each (sub-distributor), in charge of supplying their different areas.

There are 20-30 stores that we own 100%. Shops that are fully managed by Giant (within the seven sales divisions) represent a very low proportion – about one-sixth. In most cases, we are only in charge of service and backup support; we basically allow (sub-distributors) to open their own stores in their region. China is really large and each area has its own advantages. We have a 10% elimination rate (of retailers). If one store fails, we will open a new dealer to fill in or make his area smaller; we also create competition to push them.”

How about concept stores?
“Our concept stores are called ‘Giant Cycling World’, which we have been promoting recently. We opened our first one in Nanjing last year. This year, we plan to open 17 more around the country. So by the end of 2012, we will have 18 ‘Giant Cycling World’ concept stores.”

What are the minimum requirements that Giant has before opening a new point of sale? What criteria must a retailer meet before Giant sells bicycles to that store?
“We have basic rules for the general business. First, we will check the values of this person, if they fit in the culture of Giant. Sincerity is a must. Second, there should be no existing customers in a range of 3-5 miles that will be interrupted. Third, there must be several shop options to choose from. Fourth is basic financial ability.”

Let’s talk about that; how many dealers have an account with Giant? How many have to pay first before they get the products?
“All stores transfer the money to Giant first, and then we give them the products. We used to give 30 day terms to our long-term dealers, if they could prove they had enough bank savings.”

When did that change to pre-paid sales happen?
“Basically in 2008 [Note: time of the GFC]”

How many bicycles each year will your best dealer sell?
“The best sales division has sales of CNY500m (USD78.8m) and 150,000 units. The best single store has sales of CNY20m (USD3.15m). This is retail value; purchase value from Giant is nearly CNY300m (USD47.2m). Our smallest stores would sell CNY200,000 (USD31,500).”

There are many more independent bicycle retailers (IBD) in China selling multiple brands, including Giant, than concept stores

MARKETING

What are the biggest challenges in marketing to Chinese consumers?
“There are several. First, like many investments, you never know where you lose 50% of your investment. We have been in this industry for 20 years, but we still face these problems from time to time. Second, consumers in China are diverse and changing all the time. How to better understand customers and target the right groups is not easy. Third, the investment we put in improving cycling development is huge. How to unite more people in the industry to work with us and promote cycling together is another issue.”

Can you describe the ‘Giant Cycling World’ concept? What experience can I expect as a potential customer?
“These stores are totally customer oriented, which differs from all the other stores we have. From the design of a bicycle, to the product and other elements, we aput the practicality of customers in consideration. We imitate the environment of a customer riding and understand their purpose in order to help them choose the most suitable product. Also we will guide the customer for getting the best riding experience and creating new fun. In this store, you can feel the deep connection people have got to bicycles.”

In terms of popularity of road cycling, do you think Chinese consumers really want to participate in racing or enjoy the leisure?
“The people who buy the real Rabobank team bikes have dreams of being riders. This October in Beijing, there will be a exhibition hosted by the Chinese Cycling Association which is focused on competitive-level sales. Giant will bring our high-end products in to exhibit, and show the sports equipment of different national teams and provincial teams.”

How useful is the Rabobank team to your domestic marketing? Do Chinese consumers understand the importance of a team in the Tour de France?
“The Tour de France has been broadcasted in China for years. More and more Chinese people get to know the top-performing products and teams. So we conduct several events in spring and summer time, combining with the broadcasting of the Tour de France. Last year we had a few UCI cycling events, like Tour of Beijing. We arranged activities there with the Rabobank team. We have two versions of Rabobank team products: the professional version and public (replica) version, which are all sold in our stores.

Under the Rabobank team, we also have Max Success Pro Cycling* team and Giant Women’s cycling team. Also, we have top-level riders like Wong Kam Po (currently riding for the Giant-sponsored Hong Kong National Team). So we have a complete cycling team system from top, down. We have the best marketing platforms and product to build up a high-end brand image of Giant.”
[*Note: UCI Continental level. Giant hoping to recruit Taiwanese cyclists next year to make Max Success Pro Cycling a “pan-Asian” team]

How many team bikes do you sell then?
“The number of Rabobank team bikes (TCR Advanced SL RABO ISP; CNY 46,800) sold annually is only about 100 units. But it will certainly grow in future.”
[Note: a Giant representative at Taipei Cycle show informed Cycling iQ that Giant supplies 300 framesets each year to the elite Rabobank mens team]

Sponsorship page on Giant China’s website

MARKET DEVELOPMENT

Obviously, each province has different requirements to sell products. Which would be the most challenging province so far to sell Giant bicycles?
“Generally, provinces that are more populated, and coastal areas with fast growing economics, tend to have more sales of medium-high bicycles; such as Jiangsu and Zhejiang Provinces. Provinces with better road conditions also get more sales; for example, like Henan, Hebei, Shandong provinces.

Top provinces:
North China: Hebei, Henan, Shandong
South China: Jiangsu, Zhejiang
Northwest China: Sichuan

What developments are the government making for the future? Are there any government plans you know about that will help Giant’s sales in the future?
“In China, the government is supportive but it all relies on the efforts by the bicycle industry. Government doesn’t offer any specific support.”

Do you think foreign brands expect too much from the Chinese market? What would you say to a foreign brand that wants to succeed in China? How should they realistically expect to develop?
“For these global brands, they have more experience in global markets. I hope they can bring good thing to Chinese markets. Giant will be humble and learn from them. We always believe the successes of the past will become the biggest mistake in the future. That’s why we never stop innovating and developing.”

Do you think there are some rules Giant has made for the domestic markets that other companies can apply?
“Some brands are not focusing on developing cycling. Giant always stands at the front line of the industry; it is a demonstration by our industry that we are down to earth. Giant wants to appeal to other cycling brands to work together and promote the development of cycling. We always want to pass this information to consumers: a bicycle is not only cheap transport; it is also a recreation and a good way to be healthy. Our chairman (King Liu) has promoted this way highly”.

In 2009, with a group of 28 supporters from Taiwan, Giant’s Chairman and founder King Liu rode 1,668 kilometers from Beijing to Shanghai “with the goal of promoting the positive aspects of cycling in China and around the world.” King Liu’s ‘Tour of China’ bike was a Shimano Duraace-equipped TCR Advanced (in foreground)

Today, Giant’s mainland operations comprise six factories across Kunshan, Chengdu (Sichuan province) and Tianjin (municipality). Giant’s newest manufacturing facility can be found 90 kilometres west of Shanghai Pudong International Airport, in Kunshan City’s Economic and Technological Development Zone.

Though the new facility opened in 2010, it will take almost five years for the planned specification to be completed in its entirety. Of the production lines currently in operation, four are dedicated to aluminium bicycles, whilst one each is reserved for composite frames and steel frames. Four additional production lines will eventually be rolled out alongside the existing six over the next two years.

Much of the current 350,000-unit capacity is for domestic consumption (there are no 29ers made in Kunshan at this stage), though it is expected 1,000,000 units will be produced annually once the plant is fully complete in 2014. Apart from its Giant-branded bicycles, OEM clients still form a considerable part of the business; Trek being the biggest OEM customer for Giant in China.

Within the sprawling campus-style grounds, buildings are divided into four colours: blue (offices and spare parts), green (assembly), yellow (fabrication and welding) and orange (painting).

More employees work in assembly than any other department, due to the bottleneck potential of this time-consuming process. At one end of the assembly area hangs a large chart with 30 processes on the Y-axis and a list of employees on the X-axis. Linking each employee to a process is a circle with four quarters; a fully shaded circle means the employee is fully competent in a given process. Next to this stands a long table, which employees sit at each day to go over issues and processes. There is an aura of constant education.

Each of the 1,000 personnel employed at Giant’s Kunshan factory receive two weeks intensive training in each department and a monthly wage of CNY3,000 (USD475) once they complete their three-month internship. [Note: as of February 2011, minimum monthly wages in Jiangsu province’s cities increased an average of 18%. First tier cities increased to CNY1,140 (previously CNY960); second tier cities to CNY930 (previously CNY790); third tier cities to CNY800 (previously CNY670)]

Due to commercial sensitivities, Cycling iQ was not able to take photographs inside Giant’s Kunshan operations. Giant has been perfecting a number of breakthrough processes in the new facility and did not want to risk these being seen by competitors. However, the main reason for the visit was to sit with Giant China’s General Manager of domestic marketing, Kevin Zhu, for insight to the domestic market.  The full interview was recorded, translated and will be split into two separate articles; look out for these later this week.

KEY POINTS
- Giant reported global consolidated revenue of USD1.56Bn in 2011
- Giant sold 5.77 million bicycles in 2011; three times more than rival Merida
- Giant sold 1,870,000 units in China last year; a 8.5% market share
- annual domestic growth (units) is between 20-30%
- Giant owns and develops three brands: Giant, Momentum and Liv
- Giant also has an unspecified stake in Taiwanese OEM Hodaka

GETTING THERE
The two-hour bus journey between SPIA and Kunshan costs CNY76/USD12. Alternatively, if your meeting has run overtime and you have to “negotiate” with the only available taxi driver in Kunshan to get back to SPIA in time for your 19:15 flight (when it’s already 16:15 in Kunshan) the same distance can be covered in 90 minutes for a mere CNY550/USD85. Apparently.

Next: Interview with Kevin Zhu – Giant China’s GM of domestic marketing

Special thanks to Ted Zhu and Vico Han from Giant China’s planning and strategy department for being such excellent hosts.

Market-leading publisher Delius Klasing Verlag launched its first road cycling journal ‘Rad’ in September 1977. An established company of 101 years, Delius Klasing (DK) today publishes multiple cycling titles including TOUR, TOUR Bike Market, BIKE, BIKE Workshop, Freeride, Trekking Bike, E-Bike, Mountain Bike Rider and All Mountain. The company’s core content channels are automotive, cycling and water sports. “Our goal is to move people” states publisher Conrad Delius on the company website. “With our media we therefore always want to create occasions to sit on a bike and explore nature, to feel the wind and waves while sailing or experiencing mobility by car in all its facets. This task is not just a job, the job is our passion.”

Rad became ‘TOUR’ in March 1979. Today, the monthly publication is widely viewed as a technocratic, no-nonsense, authority amongst elite road cycling publications – setting its most notable benchmark in bike reviews. Though other road cycling magazines supplement field-testing with extensive data collection, TOUR was arguably the pioneer. [Click on image below for video of TOUR's testing protocol video]

According to the German Audit Bureau of Circulation, (Informationsgemeinschaft zur Feststellung der Verbreitung von Werbeträgern, or IVW), TOUR’s year-on-year circulation has declined over the previous two years, which may have prompted the decision to broaden the magazine’s reach to a more globally-representative audience.

Shortly after DK released BIKE in digital format (mid-2011), the company announced more of its publications would follow suit. Sure enough, TOUR Quarterly was released as an Apple iPad application in August 2011. In the first edition, Chief Editor Thomas Musch outlined the reasons why it had taken so long for TOUR to launch in English:

How come TOUR – Europe’s largest road bike magazine – doesn’t come out in English? We’ve frequently been asked that question in the past years by racing cyclists from around the world, by designers and engineers from the bike industry, by manufacturers and importers.

To date, our answer was the effort necessary to print and distribute an international edition of the magazine in English would simply be too great; the costs would be too high. But now modern communication technology has made it possible.

Evidently, uptake has not met DK’s expectations. According to this Weight weenies thread, TOUR has canned TOUR Quarterly after two issues; apparently due to the cost of translation and poor uptake. Indeed, only one issue has been released so far this year, in spite of the content being directly sourced and translated from already-printed versions of TOUR.

Cycling iQ has yet to directly reach TOUR or its publisher for confirmation of Tour Quarterly’s early demise. If true, it appears a contributing factor may be lack of marketing to its intended consumer base; a cruel irony indeed. [Note: I would be interested to hear from anyone who has seen any advertisement, either online or in print, promoting TOUR Quarterly.]

This post will be updated as soon as official comment is received…