Component Brands Are Driving the Growth for E-Bikes
Total Page：16
File Type：pdf, Size：1020Kb
COMPONENT BRANDS ARE DRIVING THE GROWTH FOR E-BIKES. How Ingredient Branding can help component manufacturers to extract more value from their innovations by transforming their technologies into brands. A BRAIND® Whitepaper December 2018 Munich/Ljubljana BY TOMAS VUCUREVIC AND ALJAZ URBANC Tomas is the Founder and Managing Director of BRAIND®, the only strategic Brand Management Consulting firm working exclusively in the field of Ingredient Branding. Aljaz, a former Marketing Executive at Elan Sports and Swarovski Crystals is an Associate Consultant of BRAIND®, a passionate Mountain Biker and is thoroughly following the developments in the Bike market. www.braind.co | [email protected] Source: Haibike What is inside? First generation Component Propulsion systems are driving the (Ingredient) Brands like Shimano, buying decision for E-bikes. Which SRAM, RockShox, Fox or Driven by urbanization and other Magura have already become megatrends, e-mobility solutions other components might influence 1recognized marks of quality for the including E-bikes pedelecs, the buying decision of e-mobility conventional bike sector. A bicycle 4scooters, boards and cars will fitted with a Shimano drivetrain continue to grow. People are means of transport in the future? is immediately associated with looking for e-mobility solutions a certain quality by customers to complement or replace worldwide and is a significant their current vehicle fleets with influencer of the buying decision environmental friendly and efficient for a new bike. means of transport. Now the performance, quality Other relevant components like and brand positioning of the the source of energy (ethical propulsion system are significantly batteries?), the navigation system 2influencing the purchase decision 5of the driverless car (who is of E-bikes. Component Brands like driving me?), the chassis structure Bosch, Brose, Shimano, Yamaha (clean carbon?) might influence and others are dominating the the buying decision for such new conversations at retail level and the vehicles in the future. propulsion system fitted to the bike What might just be the decisive factor for the purchase of a new E-bike. Therefore producers of such components have to consider how to engage directly with consumers Consequently, manufacturers of key in order to activate the pull-function components for E-bikes without 6on their component and to establish a clear Ingredient / Component a relationship beyond the sheer 3Branding strategy are falling behind performance of their product. and are in risk to reach a competitive position. They potentially face is in- price pressure and loss of margin, as consumers are demanding their Source: BikeExhange.co.nz components of choice from their favorite bike brands. side?2 www.braind.co | [email protected] The evolution Theof E-bikes Electric bicycles (E-bikes) managed to take a significant part of the bicycle market share in the last 5 years. Interestingly that trend was originally driven by the silver generation and not like usually, by early adopters from younger generations. But now, E-bikes became a fashionable, high quality and distinct asset of modern society and evolutiontoday one out of three bikes sold in Europe is an E-bike! In this Whitepaper we’ll break down the current development of the E-bike market through the lens of Ingredient Branding and discover vital steps that component manufacturers can use in order to scale- up their position in the supply chain. We will also take a look on how the E-bike customer journey has changed and prove that the ingredient is becoming the trigger for the buying decision in favor ofof the final product.E-bikes Ingredient Branding Co-Branding Ingredient Branding is about creating a brand for an Co-Branding is defined as the combination of two brands to ingredient or a component of a product to project a certain create a unique product offering. The purpose of Co-Branding quality or performance of that ingredient. This is typically is to capitalize on each brand to enhance the performance or done via a Multi-Level Marketing effort in order to create attractiveness of the final product. The main difference to the visibility, awareness, differentiation and preference in the definition of Ingredient Branding is the fact, that Co-Branding downstream value chain. Examples in the bike market are is a horizontal orientated cooperation, where two distinct Shimano or SRAM drivetrain, Bosch propulsion system brands, that also can be bought separately, cooperate in a for E-bikes and Rockshox or Fox for suspension systems. joint marketing program. Co-Branding activities have more a Other well-known Ingredient Brands are Intel® for processors promotional character and are short- to mid-term orientated. or Gore-Tex® for protective fabrics. Ingredient Branding is typically vertically orientated and a long-term orientated partnership program. Source: Brose 3 www.braind.co | [email protected] Trends -Bikes are becoming a part of a Emodern lifestyle as a daily means Trendsof transport by making the ritual to watch journeys cheaper, faster, easier and as well healthier. They have also established their place in tourism, where they fill capacities in spring and autumn, helping mountain resorts to extend beyond their core to watchsummer and winter seasons. Here are few trends and insights from the market: Electric bicycles are already the The European Commission Consumers see the branding number one selling electric imposes up to 83% provisional of critical components such as vehicles in the world. anti-dumping duties on propulsion systems from According to a Persistence E-bikes imported from China, Bosch, Shimano or Yamaha 1Market Research (PMR) report 2while U.S slaps a 25% tariff on 4as a quality upgrade, quality on bike-eu.com, E-bikes will the same product. seal and an important signal become the leading segment for the selection of their new of the global bicycle market Governments have imposed E-bike. until 2024 and are expected to regulations to reduce account for over 38% share of emissions and an increasing the market in terms of value. number of consumers are During this time, the E-bike 3switching to electric vehicles segment is foreseen to reflect a such as E-bikes that are What do you think? CAGR of 4%, to reach a market pollution-free and keep the valuation of US$ 24.43 Billion. environment clean. “The brand of e-components is more important to consumers, The online e-mobility dedicated platform than that of the e-bike.” Bicle.com shows that for 67% of consumers Yes - 67.32% the brand of e-components is more No - 32.68% Source: SRAM important than the brand of the E-bike. source: bicle.com 4 www.braind.co | [email protected] ? Proven by In November 2018 we conducted our can still leverage on their historical own research with 200 consumers in brand equity built in the past century. ProvenGermany. 74% of responders sayby that it It will be interesting to see how the research is (very) important for the propulsion newly found Sachs Micro Mobility system to come from a well-known will be able to transfer this into their supplier. When it comes to brand new offering for E-bikes. Besides the awareness, the leader was Bosch with propulsion system, other components 54%, followed by Yamaha (38%), play an important role in the purchase Shimano (33%), Sachs (18%) and decision for E-bikes: 62% pointed out Brose with 9%. The high percentage the battery, 42% the brake system and researchscore for Sachs shows that the brand 31% voted for theft protection. Source: Brose Which suppliers / manufacturers of Which other components play an propulsion system (E-bike motor) important role in the selection and for electric bicycles do you know? 62% purchase decision for an E-bike? 54% 42% 38% 33% 31% 31% 28% 22% 21% 16% 15% 13% 9% 8% 4% 7% 1% 1% Bosch Brose Other Other Sachs Battery Display Yamaha Software Schimano Derailleur TQ Systems E-bike brand None of them Brake system Theft protection Drivetrain system Suspension system Use of sustainable m. 5 www.braind.co | [email protected] Proven by Another data point is a readers’ survey by Shimano with 13% market share. conducted by the well-known platform They also asked the readers about Provenebike-mtb.com. They asked by10,622 their most favorite brands. The results research riders from 79 different countries and for Bosch are in line with their market the outcome shows, that the territory share at 45%, while Shimano’s brand of propulsion systems in the eMTB preference is with 21% higher than segment has been staked out by the their current market share. Brose is big brands. Bosch remains by the far following with 18%, while Yamaha got most popular with 46%, Yamaha and 10% and TQ 2,5%. researchBrose are second with 18%, followed It is therefore clearly proven, that consumers demand specific propulsion system brands at retail level. As a result, E-bike customers have completely different shopping habits compared to people looking for conventional bikes. Source: Brose 6 www.braind.co | [email protected] Customer Journey Customer is changing -bike prospects have a different set The relatively low cost of entry for Eof shopping habits. Through the a digital communications strategy digital self-service in the early phases allows Ingredient Brands to establish of the funnel, consumers are already their brand positioning and awareness. Journeyinfluenced via several channels,Bosch has developed a communication is making them aware and familiar with strategy helping end users to certain technologies and respective experience and discover new mobility brands. At the consideration stage, in a digital format with the interactive Ingredient Brands promise a level E-bike range assistant and rich video of quality that is already well-known content using social media.