Despite a drop in sales, bike manufacturer Giant is “optimistic” about the future of the cycling industry, highlighting e-bikes and China as key markets for growth.
Earlier this week, the Taiwan-based brand released its financial report for 2023 which showed a decline in sales of 16.4% year on year. Nevertheless, the company said it was hopeful that the picture would become brighter in due course.
The report said that one of the main contributing factors for the decline was the weak demand for entry-level and mid-level products in both North America and Europe. Another factor is the current high inventory situation.
Many brands have experienced similar inventory related issues in the wake of the Covid pandemic. Most found that they experienced high demand from consumers during the various periods of lockdowns around the world, but this fell away once restrictions were lifted.
In late November last year, Giant reported that it had experienced "weak demand" as well as "high inventories" in both the US and Europe, and the recent update shows that has largely remained unchanged as the year ended and 2024 arrived.
In the newly released report, the brand acknowledged that the issues it is facing are not unique within the wider industry. 2023 saw multiple big name brands experience financial difficulties and have to adjust their finances accordingly.
"The market is in chaos," reportedly said the president of Trek bikes in a leaked memo earlier this month. The US-based brand is said to now be planning cuts in spending of 10% to "right size" the company, as well as a reduction in its number of product models by 40% by 2026.
In 2024, Giant’s sales have continued to suffer, with January sales down 18% from last year. February was also down by 27%.
Despite the drop off, the brand struck an optimistic tone regarding the future, citing e-bikes as a major opportunity for growth and development for the company.
The brand’s financial report said: "E-bikes not only align with the current green energy trend but through product diversification, new innovative products developments and offerings would cater more towards consumers’ lifestyle and broaden global cycling population."
In the mid to long term, e-bikes would be the "main growth driver" in the industry, the brand added.
Last week, Giant launched the latest model of its flagship TCR road bike which, according to the brand, had been well received at the Taipei bike show in Taiwan.
The launch of the new bike, combined with the "huge sales growth" in China meant that the brand was confident the cycling industry would turn a corner in 2024.
The brands report stated: "Giant Group is optimistic with the long-term development of the cycling industry."
Cycling Weekly has contacted Giant for comment in relation to this article.
