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Emerging China – next big leap towards Asian market

WHERE IT ALL BEGAN // 潘多摩托

I remember the first time I set foot in the Beijing airport. At the time, I had no idea that this simple experience would shift my perception of China – forever.

But first – let’s rewind back to the beginning.

It was in 2017 when we had our first encounter with Chinese reps at the world’s biggest Motorcycle Expo, Eicma, in Milan. Back then, I had no clue that these humble folks could be so open to the idea of helping our business take flight by importing our products to China. We had little faith in the idea that our products could penetrate the market. Selling to China? Are you kidding? These were the kind of thoughts that filled our heads. We had little hope when we received our first follow-up letter from the Chinese reps. Still – there was a shimmer of hope inside, whispering that maybe, just maybe, it would be worth it. China is an emerging market, after all.

And so, we went ahead. Our first batch panned out as smooth as butter.

The second one was even smoother.

The time had come to take a closer look at what was happening. So, we planned a 6-day trip – 4 days in Beijing and 2 days in Kunming (Yunnan Province). Beijing was an experience in itself. Apart from the shocking heat, the streets were a spectacle to see – peppered with two-wheel electrical vehicles. In fact, we didn’t see any traditional petrol scooters while in China’s capital. The only thing that bothered us was the fact that we saw no motorcycles on the streets – only cars and electric scooters.

After some research, we swiftly discovered that motorbikes were banned in China’s city centers back in 2009, in an effort to minimize environmental impact and reduce criminal activity. Before the ban, infamous gangs were commuting via motorcycles, forcing the government to take action. The initiative worked, but not for the motorcycle industry. People may still ride their bikes outside of the city road ring, but it’s just not the same. The impact on sales was severe.

THE MARKET

From Harley Davidson to Indian, Victory, Ducati, BMW, Triumph, and more beloved brands, the Western world is at the forefront of the motorcycle game, particularly America. In China, bike prices are 30-50% higher than in the Western world. Even so, motorcycles are still in high demand in China. Motor gear is no exception.

In China, motorcycle sales reached a high of around 25 million units in 2011. However, over the next five years, sales steadily yet drastically declined – plummeting to just 14 million by 2017. Still – it’s no secret that the market boasts impressive potential. While the motorbike ban continues to take its toll on sales, we remain hopeful that something could change in the future. In fact, certain cities have already displayed leniency, and we hope this will spread throughout the rest of China too.

MARKETING

We all know about the rising government-implemented restrictions on the world’s biggest social media platforms, including Facebook, Instagram, Google, and YouTube, among others. This forces companies to embrace local channels, native to China, such as WeChat, Youku, Taobao, and Baidu. Restrictions have their pros and cons, the cons being that one must build their customer base from the ground up, a time-consuming process, and the pros being that you’re at the same starting point as the industry’s biggest and best.

OVERALL…

We still have a long way to go when it comes to penetrating the Chinese market. From cultural differences to a lack of understanding regarding China’s business landscape, we’re still at the bottom of the food chain. However, in spite of all of this, one thing is for sure – the country is evolving at a rapid pace. It’s clear that we need to act and learn quickly if we want to make it. The gates may still be open, but for how much longer they will remain open – nobody knows.

FACTS:

• Average Annual Salary: $9,970USD
• GDP Per Capita: $7.329USD
• GDP Growth (2017): 6.7%
• Population: 1.379B

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