Chinese Bike Makers See Boost From Pandemic-Affected Markets
As companies around the world continue to struggle through the COVID-19 crisis, one sector is seeing an unexpected boom in business: China’s bicycle manufacturers, who say their overseas orders have risen significantly since February, according to financial outlet Jiemian.
Production abroad, meanwhile, has decreased or stopped entirely, even as more people are exploring ways to ensure crowd-free commutes. Many foreign bicycle makers have reportedly approached Chinese businesses in recent months after their local supply chains were suspended or ran out of stock.
Sha Li, deputy head of the Shenzhen Bicycle Industry Association, told Sixth Tone that their members — some 120 Chinese bicycle manufacturers — began to see more orders starting in February, and that international orders grew by 50% to 150%. She attributed the uptick in sales to people seeking ways to become more fit and healthy against the backdrop of the COVID-19 pandemic, as well as their desire for safer commutes.
“Foreign governments such as the U.K. have introduced tax-free plans for buying bicycles, and the Australian government has a subsidy fund for bicycle buyers, which helps (Chinese) bicycles sell well abroad,” Sha said.
Cycling has been making a comeback in many countries. In the U.S., bicycle sales for the month of April topped an “unprecedented” $1 billion, up 75% from the previous year, while business in the U.K. increased by 63% between April and June.
Rising demand abroad and the absence of local stock to meet it has meant more suppliers are looking to places like China to fill the gap.
Data from China’s General Administration of Customs showed that bicycle exports rose for five consecutive months from April to August, and the industry has reported its highest single-quarter sales in nearly 25 years. Revenue from bicycle exports in the third quarter of this year reached $1.1 billion, eclipsing the $1 billion mark for the first time since 1995.
By the end of 2019, China had exported over 1 billion bicycles and electric bikes to more than 160 countries and regions worldwide, according to the China Bicycle Association. In the first half of this year, bicycle exports exceeded 23 million units, 6.1 million of which were exported to the U.S., representing a “significant increase” of 8.4% year-on-year.
A manager at Shenzhen Kespor Bicycle Co. Ltd. told Jiemian that the company has orders to fill through the end of 2021. But for some companies, more sales doesn’t necessarily mean more profits due to high freight fees and taxes levied by foreign governments.
“Shipping routes have been reduced, yet sea freight in Southeast Asia has increased by three or four times. In Europe, it has even increased by six or seven times due to the pandemic,” said the manager. “And because some European countries, such as Italy, have imposed anti-dumping duties on Chinese bicycles, Chinese factories don’t have a particularly large profit margin for sales in those regions.”
Additional reporting: Qin Siqi; editor: Bibek Bhandari.
(Header image: A bicycle production line in Suzhou, Jiangsu province, 2017. People Visual)