TAICHUNG, Taiwan (BRAIN)—Cycling Sports Group has signed a distribution deal with Ti Cycles to sell its GT and Mongoose brands in India, the company’s latest move to penetrate emerging markets in the Asia Pacific region.
CSG first branched into India early last year with Cannondale after three years of discussions, and brought in the Schwinn brand shortly after, said Edward Vlutters, director of international sales for CSG’s Asia Pacific office, located in Taichung.
Ti will offer a full line of GT Bicycles, but Vlutters expects the best sellers to be $500 hardtails and hybrids.
With a population of 1.1 billion people and a growing middle class interested in living a healthier lifestyle and recreational riding, India is an ideal market for CSG’s brands, Vlutters said.
Still it’s a culture shift for those accustomed to inexpensive bikes manufactured domestically. Vlutters likened the adjustment to an old Mac user upgrading to an iPad and not understanding how the applications function.
“A lot of people start with steel bicycles for $50 and now are stepping up to average selling price of $1,000. They don’t understand why a bicycle has quick release, why you shift at the handlebars, what to do with gears. There are a lot of questions,” he said.
Ti Cycles, which sells most of CSG’s bikes through its own retail stores, holds dealer clinics to help with education, an ever-important component as the local dealer base continues to grow.
“When I came three years ago, there wasn’t an IBD for higher end ($300 to $400) bicycles, but now slowly here and there for the big cities they are starting to pop up, which is very encouraging for me and the bicycle market,” he said.
The market is also being boosted by the growing number of local races and events like Ti’s Cyclathons, organized rides in Mumbai, New Delhi and Bangalore, each of which drew 7,000 riders last year.
India is one of 13 new sales channels CSG has added in the Asia Pacific region in the past year, increasing its presence in Cambodia, Singapore, Malaysia, Guam, New Zealand, the Philipines and Indonesia. Another target market is Vietnam as CSG seeks to widen its distribution throughout Asia Pacific.
The attraction to the region isn’t necessarily based on demand, but the fact that awareness is growing among local distributors that have typically sold their own brands and are now eager to expand into international brands, Vlutters said.
And as bike suppliers adopt a more global strategy, it makes sense to sell deeper into these emerging markets, he added.
“These are countries at a different stage of development so for the future there’s more growth potential where other markets like Europe and North America are pretty well covered by bicycle dealers,” he said.