Often at the top of Amazon BS, traditional categories have a hot sale

Although the bicycle market is already a red ocean market, a new track has emerged in the past two years. Many companies have taken advantage of the opportunity and won a lot of overseas markets.

Jiuqi Co., Ltd. was founded in 2000 and successfully listed in 2021. It has been deeply involved in the bicycle industry for more than 20 years, but such a company is rarely heard of in China because most of its products (about 97.8%) are sold abroad. Today, this Amazon bicycle category leader is trying to strengthen its comprehensive brand strength and win more overseas markets through new tracks.

Two wheels leverage 178 million online revenue

Although Jiuqi shares is a cross-border big seller, its online layout started relatively late. It only established a branch in 2016 to explore cross-border e-commerce. However, this is not an obstacle for "old foreign trade" like Jiuqi shares, which has rich overseas sales experience and obvious supply chain advantages. Therefore, after entering the cross-border e-commerce track from Amazon, its online business has developed rapidly. By 2020, its revenue has reached 178 million yuan.

From the perspective of categories, the products that drive revenue growth are mainly baby strollers and adult strollers. In 2020, baby strollers and adult strollers accounted for 158 million yuan, or 89%, of online business revenue. From the perspective of platforms, Amazon is the main sales channel. Between 2018 and 2020, more than 90% of e-commerce sales were through this platform. Among them, in 2020, sales revenue through Amazon reached 154 million yuan.

Today, Jiuqi Co., Ltd. is the top seller in the bicycle category on Amazon, with many of its products at the top of the BS list. For example, in the top 10 of the children's bicycle BS list, three products from the "JoyStar" brand series were listed, and one of them even ranked second. In the top 100 of the mountain bike BS list, 14 products from the "HILAND" brand series were listed, and two of them made it into the top 10.

In addition to Amazon, Jiuqi Holdings has also deployed in multiple channels such as eBay, AliExpress, Shopee, Alibaba International Station, Lazad, etc. In 2020, the total revenue of these channels exceeded 7 million yuan, accounting for 4.14% of the total online revenue.

While actively developing sales channels, it also strives to build its own brands. It currently owns independent brands such as "JoyStar", "HILAND", "Logan", "DR BIKE", "STITCH" and "cycmoto". The independent brand products are rich in categories. For example, Joystar covers children's bicycle products for children aged 2 to 10 years old, and Hiland covers mountain bikes, road bikes, hybrid bikes, electric bicycles and other categories.

When talking about brands, we inevitably talk about independent websites. Jiuqi shares also has its own e-commerce platforms, including joystarbike, drbikeparts, and hilandbikes. Among them, hilandbikes has a large amount of traffic. According to similarweb data, the total number of visits in the last three months is close to 250,000. More importantly, among all traffic source channels, natural search accounts for the largest proportion (75.95%), followed by direct traffic (21.48%), which is enough to show that the brand has a certain degree of popularity and influence among consumers, which is why there are so many "tap water".

He Ding, the helmsman of Shenzhen-based Qian'an Technology, once said: "Amazon is the best 0 to 1 carrier for brands to go overseas." The success of the hilandbikes brand's independent website is obviously due to the solid foundation laid on Amazon.

It is now a general trend for traditional foreign trade enterprises to deploy online channels, because this not only opens up the international market, but is also very beneficial to expanding brand influence. More importantly, directly facing end customers, there are fewer middlemen to make a profit, and the profit margin is higher.

Data shows that from 2017 to 2020, the annual revenue of Jiuqi Co., Ltd. increased from 1.756 billion yuan to 2.286 billion yuan, with a CAGR3 (compound annual growth rate) of 9.19%. Net profit attributable to the parent company increased from 33 million yuan to 157 million yuan, with a CAGR3 of 68.19%. The growth rate of net profit far exceeded that of revenue, thanks to the rapid development of the company's cross-border e-commerce and the cost reduction brought about by increased supply. Jiuqi Co., Ltd. has obviously made the right choice by entering the cross-border e-commerce track.

Over the years, the success of bicycle companies including Jiuqi Group overseas has been inseparable from the support of China's deep supply chain.

Electric bicycles are growing rapidly, with great potential in Europe

China is the world's largest exporter of bicycles, with exports of complete bicycles accounting for more than 65% of the world's bicycle trade. In 2022, China's bicycle exports were 41.74 million units, with an export value of US$3.721 billion. It is expected that exports will reach 85.647 million units in 2023.

At present, the degree of industrial agglomeration in China's bicycle industry is relatively high, and three major bicycle cluster industrial belts have been formed, namely Tianjin Bohai Bay, Jiangsu, Zhejiang and Shanghai, and the Pearl River Delta. From the perspective of the industrial chain, China has formed a mature and complete bicycle industry chain, with many manufacturers and strong manufacturing capabilities. However, in general, China's overall bicycle brand awareness is relatively weak, and on the manufacturing side, many car companies are OEMs for foreign brands.

At the same time, due to the bottleneck of technology and patents, the final products produced by my country's bicycle industry are mostly low-end products, such as children's bicycles or traditional bicycles positioned in the commuter market. In short, my country is a major bicycle exporter, but not a strong one.

However, the emergence of electric bicycles has broken this deadlock. Electric bicycles ( E-bike) generally refer to electrified bicycles, and the category term is pedelec. In recent years, due to the advancement of lithium-ion battery technology, the increase in price and power capacity, the electric-assisted bicycle market has set off a boom around the world, especially high-end models.

In the past two years, the export of electric bicycles in China has been particularly impressive. Data from the customs show that from January to November 2022, China's electric bicycle exports amounted to 33.5 billion yuan, a year-on-year increase of 6.7%. At present, Tianjin, Jiangsu and Zhejiang are the main electric bicycle industry clusters in China. According to regional electric bicycle production data disclosed by E-TIMIES, Jiangsu is China's largest electric bicycle production base, accounting for about 20% of the country's electric bicycle production. Tianjin and Shandong followed closely behind, accounting for about 19% and 17% respectively.

Among many overseas markets, Europe is both a mature electric bicycle market and a major export target market for Chinese electric bicycles.

According to a report by market research firm Mordor Intelligence, the European electric bicycle market is expected to grow from $10.71 billion in 2023 to $19.28 billion in 2028. In 2022, electric bicycle sales in the region totaled approximately 26 million units, an increase from 24 million units in 2021.

A recent research report released by EY Consulting shows that Germany has become the largest electric bicycle market in Europe, with electric bicycle sales approaching 6.2 billion euros in 2022, accounting for almost half of Europe's total electric bicycle sales.

The Netherlands is the second largest electric bicycle market in Europe after Germany, and electric bicycles already account for 40% of the bicycle market share. In 2022, the national electric bicycle sales will be nearly 550,000 units.

Chinese companies will obviously not let go of this rare opportunity to overtake others. In the past two years, companies such as Niu and Yadea have taken advantage of the situation and continued to increase their overseas layout.

As a leading bicycle exporter, Jiuqi shares also attaches great importance to the layout of electric bicycles. Among them, the IPO fundraising projects include "smart manufacturing of 1 million electric power-assisted bicycles" and "digital technology transformation of 400,000 electric power-assisted bicycles."

At the same time, in 2022, it also invested 4.5 million yuan to jointly register Jiuyi Technology with a Shanghai company. It is reported that after Jiuyi Technology goes into production, it will be beneficial for it to deepen the research and development of intelligent modules for power-assisted electric bicycles and help improve the quality of power-assisted electric bicycle products.

At present, the electric bicycle track has not yet formed a larger and more well-known brand, and latecomers still have opportunities.