When Cycling Express launched into the online realm in mid 2011, they attracted a lot of attention because they were an Australian online retailer promising to price-match Wiggle and Chain Reaction Cycles. That was unheard of and immediately propelled them into the spotlight; they are Australian, customers are supporting local business, and perhaps shipping would be faster. One of the shop’s customer support staff was also welcomed to, and participated in, the Australian Cycling Forums, answering customer questions and solving bottlenecks.
But along the way something went wrong. The staff member dropped off the forums, customers were reporting a growing number problems and a general lack of availability of stock. There was constant confusion among customers calling or visiting the Cycling Express retail store in Bayswater, Victoria and finding no help. Warranty and returns were frustrating, and then Cycling Express (online) went overseas to Taiwan and reports of them still being an Australian online retailer were ambiguous.
Market research by Bicycles Network Australia, which tracked all of the active online retailers in Australia, confirmed that something wasn’t going well for Cycling Express. Were they just a one-hit-wonder? Could they get their mojo back?
Road Trip to Redemption
Taiwanese born George Hu started the Azzurri Bikes brand, along with Lear Enterprises, and the Cycling Express retail store before opening the online store. Two years after going online, George recognised that the online shop had a growing problem and partnering with Legend Cycling was his solution. This meant moving much of the logistics to Taiwan, with administration to Shanghai in China. This however introduced new problems while serving Australian customers.
Now, George has taken the English born Shaun Bettinson onboard as the Territory Sales Manager to resurrect Cycling Express. On a road trip to redemption, together they have visited Australia, speaking with media and potential retail partners.
They were prepared to speak frankly with Bicycles Network Australia and I sat with George and Shaun at a waterside restaurant in Manly, Sydney to discuss their history and plans for the future.
BNA – Cycling Express had a fantastic start in the market which was then followed by turbulence in product availability, customer support, and customer information about how the company has changed. What problem areas have you pinpointed and solved, or are solving, to improve customer satisfaction and ultimately sales?
George: When we started a few years back we were offering a price match service and we were the first ones doing this. We also had some pretty fantastic promotions on a lot of hot products. Of course, when we put those deals out there, we had loads of people snapping our hands off to get them. The market was unbelievable back then. It felt like there was no ceiling and stuff was flying out the door. The problem was that we ended up with more orders than we had stock of for those amazing offers. Great for us in the beginning days, but of course that backfired a bit. We probably got a bit over confident! Back then our system wasn’t linked directly to the actual stock we had, so many customers ended up waiting, often for a long period of time, for the stock to come back in. We didn’t have a full handle on the customer service end of things and customers got passed around to different members of staff. We did end up with a lot of disgruntled customers and I think the word got around of what happened and that meant we got a bit of a bad reputation. For that we apologise, and we hope that now we have smoothed a lot of that out over the past few years, those customers who were not satisfied might give us another chance.
We still had a good core of satisfied customers back then and the business was starting to really take off and we were getting orders from overseas in Japan and the likes of Singapore and Malaysia. Around mid 2012 we received some pretty significant investment which gave us the chance to spread our wings a bit and expand our operations outside of Australia. Everyone knows that Taiwan is pretty much the center of the bicycle universe, so what better place to set up our first overseas warehouse and logistics center than in Taiwan? This meant we could expand our supplier base as well as having a point of service for customers in Asia. Taiwan is pretty much smack in the middle of Asia. Cycling culture in Asia has been growing rapidly in the last few years and for us, we were pretty proud to have started with just a shop in Melbourne and a small warehouse to then be taking our venture in big steps to other places in the world.
We’ve grown our team of international staff in Taiwan, servicing markets like Japan, China, Malaysia, Singapore, Korea, Hong Kong, and of course Taiwan. Australia is still very much our bread and butter and we’ve got a good core team of people working that market that are based both in Australia and in Taiwan.
The shop is still there in Bayswater, but has moved to a new location on Stud Rd and is now called Cycle Fixation. Haydn, for those that know him, is still running it.
BNA – Specifically with customer service, I have experienced long email discussions with different staff and immense difficulty getting a solution. Have you improved this?
Shaun: We find that cases where things have maybe dragged out a bit longer than expected are down to warranty claims. That process has been streamlined a lot in the last year. We work with our suppliers and brands to get the fastest resolution we can, but sometimes it can take a few extra days with time differences. We try our best to keep customers up to date with what is happening and, while we don’t yet operate a direct phone line to our customer service team, you can always go directly to the website during normal office hours and use our LiveChat function to talk to someone directly.
BNA – With strong customer demand and challenges on product availability, Cycling Express teamed up with the Taiwanese based Legend Cycling business. This has resulted in two warehouses, one in Australia and one in Taiwan. Is Cycling Express Australian, partly Australian, or an International company?
George: Cycling Express is an Australian company that has managed to break out of its original borders and over the past few years has evolved into an international company. Of course, our roots are firmly planted in Australia and we hope that Aussies can feel proud that people all over the world are getting to know who we are, where we came from, and what we are doing.
BNA – Online customers can pay in Australian dollars and you promote to them that there are no currency exchange fees and no import duty or taxes. Does this mean that for a $1,500 set of wheels which are shipped from Taiwan, that Cycling Express will pay the duty and tax?
George: That’s right! The price you see is what you pay in Aussie dollars. We take care of GST etc for you, so you won’t get hit with any nasty surprises from customs if you order something expensive and it comes from our warehouse in Taiwan. For payments, we deal with NAB bank in Australia, so you won’t find any extra charges for international fees and the like when using your credit card. We also accept PayPal and are trying to look at ways to be able to offer customers a finance option.
BNA – What about for a $500 order shipped from Taiwan? Is this also declared and customs and tax paid? Or does this take advantage of the LVT (Low Value Threshold on Imports)?
Shaun: We work a lot with TNT and EMS to deliver packages. These guys help us to take care of the necessary customs paperwork for any orders. We won’t leave customers hanging there having to sort that out by themselves. We’d be lying though if we said that there is an advantage to having that Low Value Threshold for some items that are shipped from our warehouse in Taiwan. We work a lot with suppliers in Asia to cut out the middlemen and pass that value onto our customers.
BNA – On your road trip in Australia, you are meeting with a number of bike shops with the intention of partnering so that a customer can order and pick up their fully assembled bike or equipment directly from a bike store. Have the bike shops been receptive to this, and is this an advantage for them?
George: A few shops have partnered with us since the beginning and they have been the foundation and model on which we want to build more relationships with bike shops across the country. We know what most bike shops think of online shops and we’ve had plenty of stores tell us to get on our bikes so to speak.
We think that we can find a way to work together. An online shop can offer advice and products, but it can’t service your bike or tune up your drivetrain. It’s also not possible to try a bike on for size when shopping online. There are a lot of risks in purchasing a complete bike online, so we’re trying to eliminate as much risk as possible for our customers. We basically run a click and collect model with our partner stores. Customers can have their new bike sent to a bike shop in our network and the shop will assemble the bike for them and see that the customer gets on the road safely. We pay the shop for this service. We are also putting a customer into that shop as well and they will have a point for follow up servicing and advice. The shop also has the option to offer some add-ons for the customer as well at the store which customers may often overlook, especially if they are not totally clued up on gear. Customers may often forget you need to buy pedals for a road bike, or they don’t have a decent set of lights.
We are also looking at working with these stores to help promote our Azzurri brand of bikes which have been popular in Australia for a long time. Some stores are planning to stock Azzurri, so customers can take a look at them, and the store has the option of making some margin on the direct sale of the bike.
Shaun: We are pretty open to talking to bike shops as well as guys running their own independent service for building, servicing, and fitting. We have a few guys in our network, like The Bike Mason over in Perth, who does an absolutely stellar job helping our customers from his home workshop. We’ve also welcomed on board Pave The Way Bike Fitters in the CBD of Sydney. If you’re in Adelaide, you should can check out Whippets Workshop.
We’ll be honest and say that the partner program may not suit every bike shop or independent mechanic, but for the ones we are working with now, it’s a great fit.
Thanks you George and Shaun and we wish you success.
Disclosure: Cycling Express have some advertising programs on Bicycles Network Australia. This interview was not a paid interview or promotion.