With the world of cycling represented at Eurobike, there are more than a few whispers on the floors – here is some of the hot topics and discussions.
Price Rise for bikes and gear in 2011
It was widely announced, and confirmed by some companies, prior to the show that price increases are expected – related to rising costs of the raw materials and labor costs in Asia plus Euro verses US dollar exchange rates. On the floor of Eurobike, many brands are trying to resist this trend – the strategy is being able to have more competitively priced, and thus more attractive products.
Australia – the place to be for bicycling
Despite the challenges of establishing a new brand in Australia, there is a strong interest in this market for brands not already represented. Stevens and Ghost are two strong German brands entering Australia for 2011 and there are many other reputable small to large companies with solid plans for entering the market such as Syntace and Formula, or who are actively looking for distributers.
Online Retailer Pricing Challenges
UK online retailers are popular for Australian cycling consumers though deemed a serious problem by many local bike shops and distributers. Local businesses often have lower purchase volumes (than in larger market), higher transport costs, added GST and customs duty and can’t cut costs with ‘grey area’ OEM purchases or sneaky distribution channels.
The pricing policy is the responsibility of the brands and in the past if they have been allowing online retailers to purchase for significantly cheaper, it is their actions / policy that may lead to a competitive disadvantage for their distributers and retailers. The accessories market has the most obvious price distortion.
I raised this topic with a number of brands – not ALL brands have their products available with these online retailers for less that 50% of Australian retail prices.
Continental (tires) responded that they are aware of the problems and will endeavor to take action. Lezyne stated that with the trend towards online shopping, they are consciously controlling their pricing to ensure there is a level playing field. Magura reported that they already carefully monitor pricing and distribution though acknowledge that some online retailers create loopholes to source product.
Distributer responsibilities for overseas online purchases
A complaint among distributers is the ‘grey area’ when a customer purchases from overseas and when there is a warranty claim, they turn to the local distributer rather that the overseas retailer. It is the brands responsibility to clearly define how management of warranty claims is processed in these cases – to date, many brands have a ‘grey area’ which leads to unhappy consumers and costs (time and money) for local distributers.
Direct Market Brands
This was a popular theme with brands I discussed, and while each brand is different and there are individual requirements and environments for each country – the direct market approach is becoming more popular in cutting costs and to have more control over distribution plus closer contact with retailers. For Australia however – distribution is favored, particularly for new brands, due to the logistics and lack of local market knowledge.
Pro Cycling wheeling and dealing
Eurobike set the stage for discussions on bike and equiptment sponsors for pro cycling teams in 2011, particularly the new Cervélo-Garmin team. While the bikes and cycle computer / navigation equiptment sponsors for this team are obvious, uncertain are the equipment sponsors. This has set the scene for a number of nervous last minute meetings – for Cerv?lo Garmin, the good news is that all of the Aussie team tiders are safe.
Canyon Bikes holding out on Australia
Cadel Evans made Canyon a (cycling) household name and Matthew Lloyd of Omega Pharma-Lotto is still riding a Canyon team bike. Despite interest from Australian consumers, the after market support situation and resulting legal obligations for Canyon have not been clarified and in the near future – Canyon bikes still can’t be purchased and shipped to Australia.
Australia will certainly lag behind Europe in adopting E-Bikes, though Eurobike was buzzing with E-bikes, and included a large test area at the show and strong interest in the E-bike brands.
Most major brands had E-bike models, though E-Mountain bikes were a strong theme. It seems to be the ‘trendy thing to do’ with no one really certain whether there will be strong market for them. It is argued that for Downhill and All Mountain MTB’s the E-bike options means an easier ride up the hill and no longer relying on ski lifts.
Eurobike took over Interbike years ago as the most important bicycle trade show and Interbike has announced a probably move away from Las Vegas and a date change to August which puts it before Eurobike. Many brands however reserve Eurobike as their first unveiling and hands-on for dealers.