When discussing the future development of the electric bicycle industry, industry professional Cristóbal Pérez pointed out that the current distribution structure is facing challenges and needs reform.
In recent years, the electric bicycle industry has been rapidly developing, but this growth has brought forth a series of new problems. With the development of the electric bicycle market, brands are under greater competitive pressure. The transparency of information on the internet allows users to have more choices, and factors such as distance, delivery time, price, and customer demands have become key factors for companies seeking development. Meanwhile, traditional distribution structures are also facing challenges, especially as the Direct-to-Consumer (D2C) model becomes mainstream. For dealers, increasing value, service quality, retail, and selection criteria have become more important.
With continuous technological advancements and intensifying market competition, the relationship between brands and dealers is undergoing significant changes. Brands and dealers must rethink their roles and cooperation methods in the market.
According to data from Georger Data Services in September, about 45% of the approximately 7,000 bicycle shops in the United States do not sell any of the industry’s four major brands, such as Trek, Specialized, Giant, or Pon. This is due to conflicting interests between brands and dealers. In the current market environment, high inventory pressure exists between brands and dealers, as brands typically require dealers to continuously take on large amounts of inventory, which small stores cannot afford.
Dealers used to be important channels for brand promotion. However, the emergence of the D2C model has diminished the role of dealers, turning them into extensions of brand bicycle warehouses. Bicycles sold in stores can also be purchased directly online by consumers, leading to weakened profitability. In cases where whole bicycle sales are not ideal, many stores have started to shift towards rental, assembly, and used bicycle services to increase store profitability. They also refuse to sell single-brand bicycles, and dealers choose to become service providers. Even if vehicle prices, discounts, strategies, and resources are the same, additional revenue sources can still be generated.
In the new market environment, brand competition is intensifying. Brands need to continually improve their products, enhance quality, and maintain competitive prices. Brands must also value customer feedback to meet evolving demands. Additionally, they need to actively participate in marketing to increase brand awareness and shape their brand image, expanding into global markets to find more customers.
The brand ecosystem revolves around the industry chain. Brands are responsible for developing new technologies, designing new styles, and driving the overall market development. However, this process is not always smooth. Brands need to find a balance between developing new products, manufacturing, and marketing. They also need to understand the demands of the global market to formulate strategies that adapt to different regions and cultures. However, brands cannot or it is challenging to provide global services and coverage. If they focus solely on self-operation, it is difficult to extend services to every end customer, leading to a decline in user experience.
On the other hand, the dealer’s ecosystem revolves around the experiential end. For electric bicycles, offline experiences play a strong guiding role in purchasing products. Moreover, high-quality after-sales service is a primary customer requirement. Besides, customers can now obtain product information online, and they conduct detailed research online before making a purchase. This also places higher demands on dealers’ understanding of products and market dynamics.
Cristóbal Pérez stated, “The existing distribution structure in the bicycle industry is not conducive to our performance and future. We need to find a feasible new solution. New customers are looking for new, different types of ‘stores,’ similar to those they are accustomed to, such as those for cars, fashion, and various services.”
In the new market relationships, brands and dealers should also reconsider their strategies and roles, seeking mutually beneficial cooperation. Brands can utilize distributors’ market insights to develop more targeted products and marketing strategies. Distributors can collaborate with brands to provide information about customer feedback and market demands, thus adapting to market changes.