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China Cycle Caters to Emerging, Mass Markets

Published May 5, 2011

SHANGHAI, China (BRAIN)—China Cycle attracts few U.S. specialty channel product managers, but it is an important
sourcing show for U.S. mass market brands and brands in emerging bike markets such as South America, the Middle East
and Russia.

Nicolas Muszkat, sales manager for Shimano Latin America, said Latin American distributors and OEM brands come to the Shanghai show looking for low-end parts. He said China is the main production source for the Latin American market, where most bikes are simple single-speed bikes that sell for around $200.

But, he said, consumers are becoming more sophisticated. “Every day people are looking for better bicycles,” said Muszkat, who opened a sales and marketing office for Shimano in Sao Paulo, Brazil three years ago.

Muszkat said sales are booming in Brazil, the top Latin American market, where 5 to 6 million bikes are sold each year. Of those, he said just 1 million are multi-speed bikes, so the potential is huge to move the market from single speed to geared bikes. He said he is seeing increased demand for Nexus 3-speed hubs and entry-level drivetrains from Shimano’s two China factories.

Grace Chen, marketing manager for Taiwanese component maker Kind Shock, met with many South American OEM customers from Mexico, Panama, Peru and Brazil, including Brazil’s No. 1 bike brand Caloi. She said because the South American spec cycle is later than North America and Europe, the show falls at a good time for conversations about low-end component spec from its mainland China factories.

From the U.S. market standpoint, the show is primarily for
mass merchant suppliers such as Huffy and Pacific.

“This is a very useful show; you can cover a lot of ground here,” said Ellen Johnson, vice president of business development for Pacific Cycle, which owns the Schwinn, Mongoose and Iron Horse brands.

Johnson, who has been attending China Cycle for more than 10 years, said it offers a good opportunity to get face time with salespeople for its Chinese factories, review samples and look for accessories such as streamers and baskets for kids’ bikes. She said it also allows staff to tie in visits to nearby factories.

Johnson said as sourcing costs in China have risen, there is
much discussion about where the next frontier will be for low-cost bicycle manufacturing. But, she said, it would be difficult to replace the sourcing network—from frames to parts to assembly—that exists in China.

“We’ve been attuned for a long time to making things in
China—it’s part of our way of life in the mass,” said Johnson.

—Megan Tompkins

Topics associated with this article: Tradeshows and conferences

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