Investigating the Korean Bicycle Industry at the Kintex Show
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Exhibitions Kintex Show Investigating the Korean Bicycle Industry at the Kintex Show Text & Photos: Grace S. Ruan hanks to the Korean gov- Although 70% of all Korean bi- Ternment’s incentives to cycles are currently MTBs (pre- the cycle industry and its ac- viously as high as 80%), road tive construction of bike paths, bikes—despite their low popu- the cycling environment is very larity in Korea—have become a good and Korean cycle industry new favorite over the last four has been enjoying good pros- years and show signs of steady ▲Seoul has many bridges (the Han River flows beneath). pects over the past few years. growth. 94 BMU 2012 Spring www.biketaiwan.com Kintex Show Exhibitions and 1.3 million units in recent Korean President Lee Myung- decades, sales have surpassed 2 bak loves sports and cycling, million units during the past four and therefore wishes to create an years due to the government’s excellent cycling environment promotions of environmental encouraging the Korean people awareness and cycling, and the to ride bikes. South Koreans like large-scale constructions of bike to use the Internet and often em- paths (especially bike paths along ploy it to invite their friends go rivers). Additionally, anyone can out to ride bikes, so it’s unsur- ▲Full of locks and cards, the card tree signifies easily rent a bike in many parks. prising that the bicycle growth good fortune and love. The Nakdong River (525 rate is around 10% annually. The km) is South Korea’s longest riv- cycling population consists of There are 50 million people er and has 389 kilometers of bike two major groups—middle aged in South Korea and 23 million in paths along its banks. The Han people who ride bikes for health North Korea. A large part of the River (514 km), South Korea’s reasons, and younger people who South Korean population lives in second-longest river, has 211 ki- do it for fun and to be trendy. The and around Seoul, which is di- lometers of bike paths. The third Korean cycle industry is geared vided into South Seoul and North longest river, the Keum-Gang towards the domestic market Seoul by the Han River. The total River (401 km), has 146 km of and has annual sales volume of population of Seoul is around bike paths, and the fourth longest around 2 million units. The aver- 10.5 million, and the popula- river, the Yeoungsan River (122 age unit price for mountain bikes tion of the greater Seoul area is km), has 133 km of bike paths. In between 20 million and 24 mil- addition, many bike paths are be- lion. The combined population of ing built in scenic areas, and the Seoul and the greater Seoul area completed bike path length has accounts for 48% of the entire already exceeded 1,000 km. population of South Korea. Road conditions in South In the past, the Korean bi- Korea can be difficult due to the cycle market depended heavily many mountains and rivers, and on imports, and the few Korean cycling can be somewhat dan- assembly plants imported frames gerous. As a result, the Korean and other parts for assembly in government has decided to sys- Korea. Although annual bicycle tematically construct bike paths sales remained between 1 million along rivers. It is said that South ▲These kilns have several hundred years of history. ▲The Han River divides Seoul into North Seoul ▲Middle-aged and elderly people in Korea and South Seoul. often ride bikes for health. www.biketaiwan.com 2012 Spring BMU 95 Exhibitions Kintex Show ▲Bygen frame. ▲Bygen produces some parts in Korea and also imports some ▲There are many cycling clothing manufacturers from Taiwan. in Korea. ▲Many Koreans want to own an international ▲Korea has Swallow tires, but most bikes use Taiwanese ▲These frames were developed by Korea Bicycle brand bike. tires. Research. is between US$90 and US$100. price range. Samchuly Bicycle imported (mainly from Taiwan The price range for imported bi- enjoys a market share in excess and China). Locally-produced cycles is between US$600 and of 50%, while Alton has a market frames (chiefly made using Cr- US$1,500, and the majority are in share of roughly 25%. The other Mo) are mostly used on special the US$800 to US$1,000 range. major manufacturer is Elfama, models, such as bikes used in Road bike sales are increasing; which produces mostly high-end Keirin racing. According to Na however, Korea’s unfriendly road bicycles and has an annual output Pil Sung, manager of the Kintex conditions still present problems of about 20,000 units. There is organizing group, there are 300 for people who want to give road only a handful of bicycle parts bicycle clothing manufacturers in bikes a try. manufacturers in Korea. Apart Korea, and the Korean cycle in- Korea’s two major bicycle from the relatively large tire man- dustry has around 700 companies manufacturers are Samchuly ufacturer Swallow, there is only when accessories such as lights Bicycle and Alton, and both pro- small-scale production of gears, are included. duce bicycles in the low to mid and the majority of frames are The Korean bicycle industry has two industry associations: One is KBMA (Korea Bicycle Manufacturer Association), which has approximately 25-30 members, including such leading firms as Samchuly Bicycle and Alton; the other is the KBIA, which has 37 members and is headed by Seung Phil Chang. Although both associations supported the Kintex show in the past, they parted ways last year and the KBMA withdrew from Kintex and shifted its support to the Spoex show. As a result, Samchuly, Shimano, and Biclo no longer attend Kintex. 96 BMU 2012 Spring www.biketaiwan.com Kintex Show Exhibitions Samchuly Bicycle This company is the largest bicycle manufacturer in Korea, with annual sales volume of 1 million units. The company has a small-scale assembly plant, and Cello and Black Cat are its two major brands. Samchuly chiefly imports bicycles from China, and the greater part of these are from Tianjin Fujida (500,000 units). It also imports high- end bikes from Bo-an (Shenzhen). The company used to import bicycles from Merida’s Shandong plant; however, it has now turned to Ming Cycle. Although Samchuly Bicycle long focused on low-end models, it established a high- end bike department in 2006 in order to expand into the high-end market. The company sells bikes under its in-house brands, Cello and Black Cat, and distributes European brands such as Colnago. In addition, Samchuly Bicycle is one of the two Shimano distributors in Korea. Shimano and Samchuly Bicycle didn’t take part in Kintex show this year; they chose to participate in Spoex instead. With regard to Bo-an (Shenzhen)’s financial troubles and delayed payments, a reliable source has stated that Bo-an has Samchuly Bicycle’s support. According to ▲Suk Hwan Kim is the president of Samchuly Samchuly Bicycle spokesman Peter, Bo- Bicycle. an does indeed have Samchuly Bicycle’s backing. The company has used L/C to order bicycles from Bo-an. ◄Samchuly's bikes mostly consist of practical, mid-/low price models. Alton Alton has always maintained close ties with Taiwanese firms, and it was one of the first Korean companies to establish a plant in Shenzhen. It later moved its plant to Tianjin in 2008. Apart from exporting to countries apart from Korea, it also sells bikes in the Chinese domestic market. Although its sales volume has not been large over the last few years, Alton achieved good results last year with a VIP marketing campaign in conjunction with a bank and promoting environmental protection. According to Alton President Park, the company produces approximately 60,000 bicycles annually. Alton has grown considerably after acquiring Corex last year, and it was listed on the Korean Stock exchange in April 2011. Apart from selling bikes under its Alton brand in Korea (accounting for roughly 25% of its sales), Alton also serves as an agent for numerous foreign brands. Alton is producing bikes in a joint venture with Pusan Steel. There are a growing number of importers and distributors in Korea. Some major business groups have established sports departments under the government’s incentive policy, and some baseball equipment and bicycles are provided to branded companies ▲Alton is the Korean sales agent for Raleigh. under licensing arrangements. Foreign brands in South Korea include Giant, Merida, Scott, Specialized and Trek; Scott and Giant both have set up subsidiaries in South Korea. Scott’s Swiss subsidiary sent a representative ◄An e-bike exhibited by Alton. to Spoex this year. www.biketaiwan.com 2012 Spring BMU 97 Exhibitions Kintex Show SIS International L.S. (Biclo) Seung Phil Chang is the CEO Although the manager of L.S. is and the chairman of the Korea the cousin of the CEO of LG., L.S. Bicycle Import Association (KBIA). At is not an affiliate of LG. L.S. is an present, there are 37 members in the agent for high-end European and association. Kintex has a cooperation American brands, such as BMC and relationship with the KBIA. Chang has Meddy, and sells roughly 10,000 been in the cycle industry for 13 years. high-end bikes annually. According SIS International also distributes to Executive Vice President Byung- numerous brands. Chang said that the Sang Cho, the company sells around number of people came to the show 8,000 bikes via B2B channels on the opening day was better than he and 2,000 via B2C channels.