TAIPEI, Taiwan (BRAIN)—With a waiting list for exhibitors and its location in the fast-developing Asian-Pacific rim, the Taipei Cycle Show will continue its role as the leading show in the region, predicts Erik Kimble, general manager of Colmax. (For more daily coverage from the Taipei Cycle Show, click on the PDF by clicking on the title and then "Visit Link").
Kimble, who has lived in Taiwan for years and speaks fluent Mandarin, said he has never seen so many Chinese visitors. “I’ve been getting upwards of 40 or 50 visitors a day in my booth,” he said. Colmax distributes brands including Park Tool, Finish Line, Continental, Kool Stop and other products in Taiwan and China.
He attributes Chinese interest in the show to growth in the relative affluence of the Chinese population—that’s driving the growth in sales of U.S. brands in China. But other factors are also in play.
An easing of travel restrictions and increased flights between the two countries has helped open the market in China for Taiwanese-based businesses like Colmax. And an economic agreement signed last year between Taiwan and China eliminated duties on bicycle products made in Taiwan and exported to China. However, a 17 percent VAT tax is levied on imports, Kimble said.
Kimble will again exhibit at the upcoming Shanghai show in May. It remains a domestic show for the Chinese market, he said, but it’s becoming an ideal venue to introduce new products to that market.
Still, the Chinese government isn’t eager to see its population return to bicycles for everyday transportation. Instead, the government is pushing consumers to buy electric bikes and scooters for everyday transportation. Bicycles are for recreation.
Ironically, Taiwanese suppliers and retailers are buried in excess inventory sold in the Taiwan market. And Kimble said it could take another six months or more before inventory levels are normalized.
“Right now Taiwan is flooded with inventory. There’s just too much product in the market,” Kimble said. Some retailers are still trying to sell off bikes they ordered in 2008, 2009 and 2010. “And suppliers want them to take delivery on 2011 models,” he said.
Taiwan, with a population of about 22 million, went through a major boom in recreational cycling several years ago. Sales skyrocketed as the Taiwanese discovered recreation cycling. Even Kimble, a key distributor on the island, said he’s still digging out from excess inventory he ordered thinking the boom would last forever.
“It was like the U.S. housing market,” he said. Right now Taiwanese consumers can buy an XT-equipped mountain bike for as little as $1,000 U.S. as retailers absorb losses just to clear excess inventory.
And Kimble is predicting a shakeout in brands. For example, two dozen helmet brands flooded the market during the boom. Some of those are going to go away, he said. “There’s just not a market big enough to support all the brands,” Kimble said.
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