Call to brand bicycles

China Daily, March 28, 2011

The export of Chinese bicycles to Japan is unlikely to rise following the earthquake and tsunami, despite expectations in some quarters that it would.

Jilin-based East Asia Economy and Trade News reported that the March 11 temblor had stimulated bicycle sales significantly in Tokyo, but Chinese manufacturers said the disaster would not have a noticeable effect on their annual exports.

"The Japan earthquake will have a negative effect over the delivery speed in the short run, but there will not be a significant influence on bicycle demand in the long run," said a member of staff surnamed Qi from Tianjin Gamma Bicycle, who declined to reveal his full name.

According to figures from the China Bicycle Association (CBA), a total of 81.59 million complete bikes were produced in China in 2010 and some 58.16 million units were exported to more than 180 countries and regions. The United States remains China's top market with annual imports of 19.21 million units in 2010.

Ma Zhongchao, president of CBA, said Japan is the second largest market for Chinese bicycle manufacturers. Japan imported some 7.99 million complete bicycles from China in 2010.

"The export volume will be lower in the first quarter, but the annual export volume will remain stable in 2011," said Ma.

Although China has the largest bike manufacturing and export volume in the world, Ma said he was not satisfied with the current results.

"Most Chinese companies are original equipment manufacturers but their own brands are not recognized in the international market. Their branded products cannot be sold at a good price," said Ma.

Ma said the average price for bikes manufactured on the Chinese mainland is about $50, while bikes manufactured in Taiwan can be sold at $297 in the global market.

"Bikes manufactured on the mainland are commonly considered as commuting vehicles without advanced technology. The added value perceived by foreigners is low. We have a large export volume but we do not have a strong presence in the mid- and high-end market," said Ma. "It is a market sector to which we need to pay more attention in the future."

Ma said that it will not be an easy task for Chinese manufacturers to set up brand awareness in the global market. He has sought advice from consulting firms and was told the investment would need to be huge and a long-term commitment would be required.

"We will try our best to assist the manufacturers and we hope the average price can reach $100 in the next few years," said Ma.

In addition to the need for Chinese manufacturers to pay more attention to the international market, Ma said tremendous business opportunities can still be found in the domestic market.

"Bicycle-related exercise will be popular in China if people continue to promote a low carbon and healthy life style," said Ma.

Right now, Ma said it is important to rebuild people's understanding of the main function of bicycles so as to re-introduce them into people's lives. It has been reported by some media outlets that bicycles are playing a less important role in Chinese families in recent years because of the development of the automobile industry.

"Traditionally, bicycles are considered to be a basic tool to be used in the public transit system. We are trying to educate people that riding bicycles is a kind of sport and leisure activity. Bikes can become a fashionable product and the design can change according to people's preferences," said Ma.

In 2010, CBA invited 12 ordinary people to travel from Beijing to Shenzhen by bike. Participants spent 47 days completing the 4,500 kilometer journey.

Amid great challenges and opportunities, Chinese bicycle manufacturers are moving a step further toward increasing brand awareness and market share. For example, Tianjin Gamma Bicycle Co Ltd has invited basketball player Yao Ming to be the face of its brand for a fee of millions of yuan.