Three years have passed since Taiwan s second-largest bicycle manufacturer joined the elite club of WorldTeam sponsors. Cycling iQ caught up with Merida VP William Jeng to reflect on whether it has all been worthwhile.
It seems Merida is finally stepping out of the shadow that has been cast by larger rival Giant since both companies were founded in 1972.
After producing Raleigh (Merida) and Schwinn (Giant) bikes in their formative years as OEM factories, it was Giant that first established its own brand in 1981. Merida (???) would remain merely the name of a factory until 1987, by which time Giant had already manufactured its first Cadex 980 C carbon-fibre bicycle and established international branch offices in the Netherlands (1986) and USA (1987).
The trajectories of both firms are inextricably linked to their respective commercial decisions in the Land of Opportunity.
Giant s CEO Antony Lo adamantly believed a company s performance in the US market was a barometer of global success. Though Giant struggled in the US for well over a decade, it finally turned a profit in the first year of the new millenium enroute to becoming a top-three brand by market share in the specialty bicycle retailer sector.
Conversely, Merida made the crucial decision to acquire 49% of its major US-based client Specialized in 2001. The deal further cemented an ongoing agreement with Specialized that the North America market would remain closed to Merida-branded bikes.
Early days: a young William Jeng, second from left. To his left, current Merida president Michael Tseng, Specialized s Mike Sinyard, Merida founder Ike Tseng and Specialized VP Bob Margevicius.
Giant had already beaten Merida to a number of other milestones, too; including getting its products into the Tour de France through sponsorship of the Spanish ONCE squad in 1998. With its unique sloping geometry and light weight, Giant s Total Compact Road (TCR) road bike captured the attention of cycling fans and media. Giant bicycles have been a part of Le Tour every year since.
The tables began to turn in 2012, when Merida announced it would co-sponsor the Italian Lampre-ISD WorldTour team from 2013 onwards; a notable level of commitment above Giant s then role as an equipment supplier to the Belkin Pro Cycling squad.
Giant countered with a one-two combination the following year, co-sponsoring the Giant-Shimano (formerly Argos-Shimano) team and claiming the distinction of getting the first Chinese rider, Cheng ji, to the Tour de France. This was lauded in China, Giant s biggest market and Merida s second-biggest.
Not to be outdone, Merida was instrumental in the signing of Taiwan s Feng Chun-Kai to the Lampre-Merida squad in 2015. Not only was this a first for a Taiwan cyclist, it was highly symbolic for Merida; Giant had a coveted sports marketing hook for China, but they had the local boy.
As a Taiwanese manufacturer, it was very important for us to have a Taiwanese presence in the team, explained Jeng to Cycling iQ this week, when asked about the circumstances and rationale behind Feng s signing. We worked with the team management to secure the best Taiwanese talent and to influence the race schedule to include Tours in Taiwan, China and Japan. We feel a strong corporate and social responsibility to encourage our countrymen that cycling is very positive. Cycling is a relatively young sport in Taiwan and we want to show that if you try hard, you can achieve success.
In pro cycling as in business, success is hard won and the return on investment is often difficult to measure. As the phrase goes, I know that half of my marketing budget is working, I just don t know which half.
Despite the complexities, Jeng points out Lampre-Merida s contribution to Merida revenue is closely monitored. We obviously review sales from all our distributors by product area to see what impact on sales the team has. Our European marketing team work to understand the softer factors using media agencies to calculate the exposure benefit of race coverage, analysis of social media engagement and web statistics.
2015 was certainly a good year for Lampre-Merida, with seven stage wins across all three Grand Tours. By comparison, Sky won four, notes Jeng, perhaps shrewdly omitting Sky s overall Tour de France victory courtesy of Chris Froome. At the Giro d Italia, Merida launched its new Scultura 9000 LTD road bike, claiming it as the lightest production road bike on the planet . Lampre-Merida won four stages, including a mountain-top finish. You couldn t wish for a better product launch!, exclaims Jeng.
Feng did not participate in any of the Grand Tours this year but Merida wasted little time in leveraging its investment, releasing 250 pieces of a REACTO CK limited edition road bike in March and quickly selling out; remarkable considering it was only available in Taiwan, a notoriously saturated market.
Sales in Taiwan and China are both growing rapidly, states Jeng, particularly road bike sales as a result of the Lampre-Merida sponsorship. The Chinese market is showing incredible growth. We have just completed construction of our 3rd factory in China helping us keep up with sales growth. The Far Eastern markets are becoming sophisticated very quickly, Korea and Japan are also growing rapidly and purchasing high end product.
Merida s strong 2015 Q1-Q3 financial results the company recorded 7.8% year-on-year growth compared to Giant s 2% have been at least partially attributed to race team sponsorship by some in the Taiwanese media; an analysis backed up by Jeng. Some distributors worldwide have seen sharp growth in their road bike sales, others report that brand awareness as a whole has improved due to the exposure.
With three years of sponsorship in the rear-view mirror, Merida s VP is adamant his brand needs to be in the WorldTour for the long haul. A (WorldTeam) is now an essential factor for a major bicycle brand, helping to reinforce the perception of quality and racing pedigree. It is a given that a brand and manufacturer of the standing of Merida should be seen in the highest echelon of competition.
Not the words of a man who feels his company is overshadowed in the slightest.