Challenges to the traditional distribution structure of e-bike

Challenges to the traditional distribution structure of e-bike

Referring to the future of the e-bike industry, bicycle industry professional Cristóbal Pérez pointed out that the industry’s current distribution structure is facing challenges and is in need of change.

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    Electric bike traditional distribution structure

    The e-bike industry has grown rapidly over the past few years, but this growth has been accompanied by a series of new problems.

    As the e-bike market grows, brands are facing greater competitive pressure, transparent information on the Internet gives users more choice, and distance, delivery time, price and user needs have become key factors for companies seeking to grow.

    Meanwhile, traditional distribution structures are beginning to face challenges, especially as the D2C (direct-to-customer) model becomes more dominant, and for dealers it is important to increase the level of value-added, service, retailing, and selection criteria have also become more important.

    Electric bike traditional distribution structure

    The traditional distribution structure of electric bikes faces challenges

    As technology continues to evolve and the marketplace becomes more competitive, the relationship between brands and distributors is undergoing significant change and must rethink their roles in the marketplace and how they work together.

    According to Georger Data Services in September, about 45% of the approximately 7,000 bike stores in the U.S. do not carry any of the industry’s top four brands, such as Trek, Specialized, Giant or Pon, because of divergent interests between brands and dealers, and because of high inventory pressures in both brands and dealers in the current marketplace. Who are the top 10 electric bike brands in the world?

    In the current market environment, there is high inventory pressure between brands and dealers, and brands usually require dealers to take on large amounts of inventory on an ongoing basis, which is unaffordable for small stores.

    In the past, dealers were an important channel for brand promotion, but the emergence of the D2C model has weakened the role of dealers, who have become an extension of the brand’s bicycle warehouse, and consumers can buy bicycles sold by stores directly online.

    So, profitability is also weakening, and in the case of unsatisfactory sales of complete bicycles, many stores have begun to turn to leasing, assembly and second hand bikes services to improve the profitability of stores, and refused to be single brand sales.

    Brand sales, dealers choose to become service providers with additional revenue streams even if vehicle prices, discounts, strategies and resources are the same.

    The traditional distribution structure of electric bikes faces challenges

    How to find new partnerships

    And the new market environment has increased competition for brands, who need to continuously improve their products and increase quality while maintaining competitive pricing. You can also check the top 10 bike parts manufacturers in Europe for your reference.

    Brands must also pay attention to customer feedback to meet changing needs. In addition, they need to be actively involved in marketing to increase awareness and build brand image, and expand into global markets to find more customers.

    The ecology of the brand owner is centered around the industry chain, and they are responsible for developing new technologies, designing new styles, and driving the entire market.

    However, this process is not always smooth, brands need to find a balance between new product development, manufacturing and marketing, and also need to understand the needs of the global market in order to develop a strategy that adapts to different regions and cultures.

    But brands can’t or it is difficult to provide global services and coverage, if you only focus on the brand’s self-management, it is very difficult to extend the service to every end customer, which will also lead to user experience decline.

    The dealer’s ecology is precisely around the end of the experience.

    How to find new partnerships

    For electric bikes, the offline experience of product purchase plays a powerful role in guiding, in addition to the follow-up high-quality after-sales service is also the main demand of users.

    In addition to this, customers are now able to access product information online, and they conduct comprehensive online research before making a purchase, which also puts a higher demand on dealers’ knowledge of product and market dynamics.

    Cristóbal Pérez says, “The current distribution structure in the bicycle industry is not favorable to our performance and future.

    We need to find a new and viable solution for new customers who are looking for new and different types of ‘stores’, similar to the ones they are used to, such as automotive, fashion, and services of all kinds”.

    In this new marketing relationship, brands and distributors should also rethink their strategies and roles, and explore ways to work together in a way that aligns their interests.

    Brands can use distributors’ market insights to develop more targeted product and marketing strategies.

    Distributors, in turn, can work with brands to adapt to market changes by providing information on customer feedback and market needs.

    Chocolatezhu
    Chocolatezhu
    Hi, I'm an experienced writer about mechanic and an expert on bike and e-bike tech who appreciates practical, beautifully-engineered things. And of course, I love cycling.
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