Bike-Maker Giant Says Fitness Lifestyle Boosting China Sales

Giant Manufacturing Co. (9921), the world’s largest maker of bicycles by sales, is betting on rising incomes and greater awareness about fitness to help it sell pricier models even as automobiles gain popularity as the primary mode of transportation in China.

Revenue from China, its single-largest market, will increase 15 percent to about 6 billion yuan ($942 million) next year, driven by sales of mountain bikes, according to Young Liu, China president for Taichung, Taiwan-based Giant. Retail prices start from 1,058 yuan for an all-terrain bike, compared with 560 yuan for comparable models from the Shanghai-based Forever brand, used by the country’s postal service.

“In the past, people thought the bicycle is just a commodity,” Liu said in an interview from Kunshan, about an hour’s drive west of Shanghai. “They didn’t perceive bicycles can be used in different ways just like in Western countries, such as on the weekends we ride bicycles with our friends.”

Rising incomes and faster urbanization mean more consumers are swapping their bicycles, once an ubiquitous sight in China, for cars. The country surpassed the U.S. in 2009 as the world’s largest market for new vehicles, after auto sales jumped more than fivefold in the last decade.

Photographer: Nelson Ching/Bloomberg

The Giant Manufacturing Co. Ltd. factory in the Kunshan area of Suzhou, Jiangsu Province, China. Close

The Giant Manufacturing Co. Ltd. factory in the Kunshan area of Suzhou, Jiangsu Province, China.

Close
Open
Photographer: Nelson Ching/Bloomberg

The Giant Manufacturing Co. Ltd. factory in the Kunshan area of Suzhou, Jiangsu Province, China.

About 83.45 million bicycles were produced in China last year, down from 88.8 million in 2007, the official Xinhua News Agency reported on April 27, citing the China Bicycle Association. The country still has about 470 million two-wheelers, compared with 114 million vehicles.

Sales in China, which accounted for about a fourth of Giant’s total sales last year, will rise 40 percent to more than 5 billion yuan this year, Liu said.

“In the last five years, we have been trying to promote a new cycling lifestyle and it worked,” he said.

Shares of Giant slipped 0.6 percent to NT$168 in Taipei trading today, paring its gain this year to 44 percent. Taiwan’s Taiex index, up 5.6 percent in 2012, retreated 0.2 percent today.

To contact Bloomberg News staff for this story: Liza Lin in Shanghai at llin15@bloomberg.net; Margaret Conley in Shanghai at mconley3@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.