Current situation of Chinese e-bike entering the European market

E-bike in Germany - Chinese e-bike entering the European market

Although China is a big bike country, there is not much market for e-bikes in China, because the popular electric bike in China is similar to a light electric motorcycle.

However, internationally, especially in Europe and America, e-bikes are very popular. This is why Chinese e-bike companies want to do well in the international market.

Germany is one of the most suitable destinations in terms of politics, economy, culture and technological development, as well as consumer acceptance.

However, theoretical analysis is not enough, but also has to have a practical methodology, so today’s article will be from the e-bike exports to Germany and other European markets, practical problems and Chinese e-bikes into the European market in two aspects of successful cases, to provide a specific analysis of the operability of e-bike exports to Germany and other European markets.

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    Practical problems of exporting e-bike to Germany and other European markets

    It is true that the development of e-bikes is very rapid. From 2017 to 2021, sales in Europe and the United States rose from 2.5 million to 6.4 million, an increase of 156% in four years, so that the world once again recognizes that “Europeans love to ride bicycles.”

    But in fact, before 2020, the European attitude towards e-bikes is still relatively ambiguous.

    On the one hand, I think this thing is too popular.

    On the other hand, this is why cycling to the idea of electricity, to be honest, can understand.

    After all, people originally ride bicycles for environmental protection and exercise, plus the motor. The bike is not so environmentally friendly, nor is it so fit.

    So the first question for e-bike manufacturers arises: What do Europeans buy e-bikes for?

    The practical problems of exporting e-bike to Germany and other European markets

    The diverse needs behind the e-bike

    First of all, people will not buy an e-bike on a whim just because it is environmentally friendly.

    Environmental factors, of course, but not the main reason, people buy e-bikes, more based on their own real needs, on the one hand, after the epidemic on people’s health considerations, to avoid the more crowded public transport.

    On the other hand, there are also soaring prices leading to soaring fuel prices and the cost of public transport for expensive reasons.

    Since March last year, London’s public transport and subway fares have increased by the most in a decade.

    The monthly subway ticket in Germany has also risen from € 9 to €49, costing around €588 a year to commute.

    After the epidemic was lifted, many European countries opened separate bike lanes, and the government is also interested in developing a new energy industry, providing subsidies ranging from hundreds of knives to thousands of euros to buy.

    The diverse needs behind the e-bike

    It is obviously more cost-effective for people to spend some money to buy an e-bike for two or three years than to buy a car to block the road, or to spend high public transport costs.

    While electric motorcycles in the Chinese market are usually only for transportation, e-bikes need to meet the diverse needs of exercise, leisure travel, short-distance excursions and urban commuting.

    Under different usage scenarios, consumers’ needs for products are also more diversified, so the first thing for businessmen to do when they enter European countries is to find the right track and precisely meet certain needs of European consumers.

    Price competition in Europe does not work

    The e-bike industry is still dominated by high unit price products, with target users in the middle and high end of income and consumers generally not price sensitive.

    European consumers are obviously more concerned about ride comfort, range, vehicle stability, safety and other hard indicators of the product, and higher prices mean stronger technical capabilities, more complex design and higher raw material costs.

    And e-bike sensor accuracy, controller algorithm, motor requirements and technical barriers are extremely high, not just to reduce the price, e-bike competition back to the essence, or supply chain, industrial chain of battle.

    Price competition in Europe does not work

    Brand building plays an important role in China's e-bike export

    At present, the global e-bikes production capacity pattern is as follows: the United States does not have local production capacity. Basically, in Europe and China. Chinese e-bike companies in the process of going international actually have an advantage.

    Although Europe accounts for the bulk of production, China still retains its position as a production center and its traditional bicycle supply chain is quite mature.

    Due to tariffs, a large number of Chinese e-bikes are exported to Europe for assembly in the form of spare parts.

    Europe still lacks the capacity to produce bicycle parts and needs to import from China, creating enough preconditions for Chinese brands to go abroad.

    Although the advantages are obvious, the challenges facing Chinese e-bikes going abroad are also great: first, the market environment is becoming more and more competitive.

    Driven by the global dividend period of $100 billion, various manufacturers are rushing in, and the original Chinese e-bikes are all startups, but now giants such as Xiaomi and Phoenix-bicycle have joined the market, making the competition more intense.

    Brand building plays an important role in China's e-bike export

    Secondly, there is a supply chain problem. Before the technological revolution, plant capacity could not be increased rapidly in a short time, but market demand could, which led to a tight supply chain, including several parts such as batteries, motors, transmissions, etc.

    There is a shortage of supplies, and significant increases in shipping costs and uncertain transportation times have also added to the already poor delivery times.

    But compared to these problems, the main problem of China’s e-bike exports or brand building. E-bikes enter the international market. It is not feasible to rely solely on price and product.

    After all, do the market or need to brand, otherwise your customers are likely to become fans of other brands.

    Data show that there are more than hundreds of local e-bike brands in Europe, which have started the market layout early in Europe and gained a certain market share, each with its own advantages and characteristics in design, performance and brand awareness.

    Of course, China also has good e-bike brands, such as Yadi, Emma, and then DYU and other up-and-comers, but as the track position continues to be occupied, emerging brands will only face brand building pressure.

    Of course, pressure does not mean it can’t be done. The e-bike track is now the time to run out of dark horses. FaFrees is one of them.

    Case study: the small but beautiful FaFrees

    According to people’s stereotypes, it takes a lot of capital to operate in an emerging industry with technical barriers like e-bikes, but a cross-border e-commerce company in Shenzhen has successfully run a small but beautiful e-bike brand from the e-bike track – FaFrees.

    FaFrees brand founders entered the e-bike industry by sheer coincidence. They started out as a wholesale foreign trade business, shipping goods purchased by manufacturers in China to their overseas warehouse in Poland via the China-Europe train, with the rest of the sales process done by local partners.

    In 2020, they shipped a batch of goods to Europe because of the epidemic that lost customers, boxes of fitness clothing, fitness equipment and e-bikes were stranded in the warehouse.

    The company had to work hard to start researching Amazon and eBay. The global supply chain was blocked during the epidemic.

    The European market actually needed the goods, and soon they emptied their hands of goods through e-commerce.

    In the process, they found that the e-bike market started quickly, and the customer unit price was high, and the profit margin was relatively ideal, so after careful consideration, they finally decided to enter the e-bike track.

    Although there was no shortage of big capital coming down for the scorched earth battles on the e-bike track, the different languages, regulations and barriers to entry in Europe predestined that the European market was not suitable for venture capital-oriented companies pursuing growth rates, but for stable companies.

    In 2021, the company officially launched the e-bike brand-FaFrees, priced at about €1,500, focusing on urban short-distance travel tools, suitable for consumers to go out for a shopping trip or outdoor riding on a regular basis.

    With this brand positioning, FaFrees’ best-selling bikes are those that can carry a certain amount of weight and have relatively wider tires and a full sense of security.

    Case study FaFrees

    At the same time, FaFrees found that for European consumers, the product sells for €799 or €899 for them .

    There is no essential difference, the product is the first. Europeans have a high rate of return, but in the e-bike category, Europeans also have a high rate of repurchase.

    FaFrees once had a customer who placed an order for an e-bike and then placed two consecutive orders, both at the same address, because he used it and thought it was good, so he bought some for his family.

    This made FaFrees realize that many consumers in Europe are first-time buyers of e-bikes, and as long as there are no problems with the product, they will basically be kept and continue to buy.

    So FaFrees changed its overall operating logic, the product to do well enough to reduce the return rate, but also through free shipping, no reason to return, free extra parts and other ways to reduce the threshold of consumer decisions, so that consumers feel that even if they are not satisfied after the order is not much loss, thereby increasing the number of orders.

    After that, what you need to do is after-sales service. FaFrees does not currently have a dedicated customer service team. Customer service may be the market, product, channel, operations, all have sufficient understanding of the product.

    These two years FaFrees in the manufacturer’s pickup price has been increased by 40%, used to iterate better imported parts, hoping to make the product better and better, the thicker the profit.

    Last year, FaFrees sold more than 10,000 e-bikes in Europe, with revenues of more than €10 million.

    In FaFrees’ view, the biggest advantage of Chinese companies is not cheapness and high cost performance, but “Chinese companies must be the most willing to understand consumers and make changes for them.”

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