We asked the owners of two well established specialist ebike retailers the same set of questions about their experiences in selling and servicing ebikes. Alison Cheong, co-owner of Glow Worm Bicycles, based in Sydney, whilst Nick Willis is the co-founder of Electric Bikes Brisbane.
SALES
BICYCLING Trade: Is there a typical ebike customer? What are the largest customer groups?
NICK WILLIS: Not really. The range of ebikes on the market today is so large in terms of intended use, drive system and price points that no one target segment is a stand out in terms of sales.
ALISON CHEONG: No, for each store it’s different. For our store it’s primarily families who are using cargo bikes or people aged anywhere from 28 to 86 using it for commuting.
BT: How many visits does a typical new ebike customer make to your store before they purchase?
NW: Buyer behaviour tends to follow individual’s personalities. Some people are naturally risk averse no matter what they are buying and obviously spend a lot more time researching and testing than others.
AC: Two to three visits. The biggest thing is working out what kind of ebike will suit them. What’s the most user friendly ebike for their specific needs?
BT: What are their most common concerns or points of objection that you need to address?
NW: None if your sales team have qualified the customers correctly! As ebikes are a relatively new product there needs to be a distinction between the curious and the serious. I’m pretty certain lots of people have taken free rides in a Tesla, but I don’t see that many Model Ss driving around.
BT: How often do you sell ‘his and hers’ pairs
NW: Kind of regularly actually. We just had a couple… she came to get a regular bike. She’d been away in Japan with her partner. They were riding ebikes in Japan and loved it. She came here just to get a regular bike and walked away with one electric bike and a week later came back for a second one – matching birthday presents.
We often find that somebody will buy one for their own needs and the other partner will keep trying to steal it for their own commute or they might want to keep up with them, so they eventually come in for a second one. Other times it’s just couples getting matching ebikes.
AC: Very rarely. I’m sure every salesperson can tell the story of an amazing sale whether from the road cycling or MTB world. The reality is ebikes are a lot more expensive than an average commuter bike, and in most cases a mid-range mountain or road bike. You might sell the occasional pair of bikes, but those sales are a very small percentage of total sales.
SERVICING
BT: What are the main servicing issues you experience with ebikes?
NW: Just regular maintenance. Making sure people are replacing their brake pads quickly enough, chain wear – the things that you find on a mechanical bike.
It’s accelerated, because someone who purchases an ebike is riding it very regularly, very big distances and sometimes at higher speed or having more cargo to carry. So for things like hydraulic disc brakes, we try to persuade people to go with a metallic option (for replacement brake pads). Otherwise they’ll wear out within three months if they’re doing a lot of riding.
AC: The key issue is to make sure your workshop, shop location and team are set up to deal with ebikes. As an ebike specialist we stock 16 brands, and are set up to service and repair seven unique drive and ebike systems, ranging from 2005 to the present day.
When you add in the additional braking systems, unique gearing, drivetrains and specialist parts, you need to make sure you’re able to handle anything that walks in the door. This could be simple mechanical issues, or complex systems diagnostics, repairs and rebuilds.
Shops also need to be aware that ebike batteries are a ‘Class Nine Hazardous Material’ and need to be handled and stored according to strict guidelines. There’s also the matter dealing with voltages from 36v-48v and higher in some cases. Not a big deal to a trained electrician, but enough to blow an entire e-bike system if you don’t know what you are doing.
Ebikes can be several times heavier than your average carbon road bike. We’ve invested in specialist hoists and work stands to cope with the additional weight. We also have specialist access doors and undercover secure storage for all of our customers’ service bikes. You can’t easily hang an e-bike on the wall for storage if you are tight on space.
NW: Absolutely. We have dedicated laptops for each workstation running the latest diagnostic systems from Bosch, Shimano, Impulse, Brose, BH emotion and Go Cycle. We also use a range of specialist hardware testing and calibration tools.
AC: Each different bike uses different diagnostic systems. They’re not 100% useful. One program we were using was actually corrupting the motors. We’d have to replace the motor each time because it was killing it.
SHIMANO'S NEWEST CHALLENGE
It’s hard to overstate the dominance of Shimano in the bicycle component world over the past two decades. In terms of sales and market share, Shimano is bigger than its three closest rivals, SRAM, FSA and Campagnolo combined.
But seemingly overnight, Shimano has some new challengers to its dominance with names previously not associated with bicycle components at all, such as Bosch, Brose, Impulse, Panasonic and Yamaha.
According to Shimano’s official history, they launched their first STePS ebike drive system in 2010. This year Shimano launched its E8000 series mountain bike specific drive system, which is smaller, lighter and with a narrower ‘Q factor’ than their ongoing 6000 series models.
Brian Seng who is Shimano Australia’s Technical Support and Service Manager for STePS says that there are currently seven bike brands being sold in Australia with STePS drives: Apollo, Avanti, Bullitt, Merida, Trek, Velectrix and Wallerang. He said that two more would be coming in 2017 with the new E8000, Focus and Scott.
He also said there would be a new Shimano battery in the second half of 2017 that increases the power storage form the current 418Wh to 500Wh but will have the same size and appearance as the current battery.
This November Shimano will be launching a new Australian specific website for STePS. “It will feature all the bike brands available in Australia with STePS,” Brian said. “It will aim to educate both IBDs and consumers about the key points, but not get them bogged down in too much technical detail.”
THE PIONEER
Tony Morgan has been in the ebike business for 17 years, which he says is longer than anyone else in Australia. Despite the rapid diversification of the ebike market. Tony has stuck to his roots of designing and importing his own TEBCO brand of budget priced ebikes and adult tricycles.
Always one to speak his mind, Tony has some strong views about the ebike market which he shared with Bicycling Trade.
“In 1999 TEBCO imported the first commercial shipment of electric bicycles in to Australia, Tony recalled. “They were lead acid battery bikes with a 24 volt system.
“There was enormous interest. People had never seen electric bikes before. The problem was the weight, because of the huge battery they weighed 50kg. Today our folding bicycle weighs 17kg and our step through model weighs 22kg.”
“We’ve sold many thousands of ebikes since then,” he continued. “We now employ four staff.”
Many of Tony’s customers are at the lower end of Australia’s socio-economic spectrum.
“We offer the choice of 200 watt throttle or 250 watt pedal assist. The ‘have nots’ of society still want twist grip throttles. The ‘haves’ are happy to go with pedal assist and pay the ridiculous prices for the European models.
“Up towards $2,000 is the ceiling. Once it gets over $2,000 the vast majority of people we deal with get the shudders. With the tricycles it’s up to about $3,000.
“There are more and more mature Australians are taking up electric bicycles so that they can continue with some activity.
“There are groups down here of 50 to 100 that go on bike rides of 30km to 50km in a day. Some of them can pedal for 10km or 15km but they use the twist grip to get them home.
But the have nots are still a big group. They all have some sort of challenge. Either a financial challenge, they can’t afford a car, a mental or physical challenge when the doctors say, ‘You’re not allowed to drive anymore.’ For these people ebikes become their primary means of transport.”
Tony says that his core trade customers are ‘Mum and Dad’ bike shops.
“Ninety percent of our business is wholesale. We solely supply traditional bicycle stores. We have virtually no supply through specialist electric bicycle stores.
As for the future, he thinks in the long term, ebike prices will fall. “What in the field of electronics doesn’t get cheaper over time?” he reasoned. “We don’t use the Chinese batteries. We use solely Samsung or LG cells (from South Korea), but the Chinese cells are getting better.”
BOSCH GROWS FROM FOUR TO 20+ BRANDS IN 18 MONTHS
During his most recent visit to Australia we caught up with Bosch eBike Systems’ Regional General Manager Fouad (pronounced ‘Foo-add’) Bennini and Melbourne based Regional Technical Manager Cameron Burke.
BICYCLING TRADE: Where are you based and what is your role at Bosch eBike Systems?
FOUAD BENNINI: I joined the ebike team in September 2010. I have been the head of product management and business development. Since July 2014, I have been the Regional General Manager for Asia Pacific.
Currently we are located in Suzhou, China. It’s close to Shanghai. We chose this region because the bicycle industry is there.
We have several different tasks for our regional business unit.
The first is to have local technical support for the bicycle industry: frame manufacture, components manufacture and of course assembly of the pedelecs.
The second aim is to set up a logistics centre. We already set one up in the free trade zone in Shanghai, from where we can deliver our products to the different production sites in Asia.
The third is to develop markets. Currently our main market is Australia. In the future we’re looking to expand to New Zealand. We’re also looking at Japan.
BT: Do you still manufacture your products in eastern Europe?
FB: Correct, in Miskolc in Hungary.
BT: Are you looking to set up manufacture in China as well?
FB: This is something we’re looking at in the future, but it depends upon how much volume will pass through Asia. The main pedelec market worldwide is still in Europe and the production or assembly is also mainly in Europe. It depends upon how many manufacturers move their production to Asia.
We’re a long way from this threshold so far, so for the coming years we’ll still produce our products in Europe.
BT: How has the Australian ebike market progressed in the 18 months since Bosch eBike Systems officially launched in Australia?
FB: We are growing pretty fast and matching our expectations both in terms of sales and acceptance of the pedelec in general in Australia.
Last year we had our official launch in the market. We set up our service partner Eurocycles in September 2015. We currently have Cameron and David as our technical representatives here.
Before we set up here in Australia there were only four brands sold here with Bosch pedelec systems. As of today we have more than 20 brands, which I think is a great commitment and a good sign for the future.
We’ve started dealer training, which is one of our most important actions this year, to gain the confidence of the dealers and to educate them about what a pedelec is.
We addressed six cities with 13 training sessions where we trained more than 280 people. The feedback that we’ve had from dealers is that they’re starting adopting pedelecs in their shops. Some have already sold out of model year 2016 and they’re looking forward to increasing the volumes in model year 2017.
BT: How do you think you’ve progressed in terms of dealer understanding and knowledge of your systems in particular and ebikes more generally?
CAMERON BURKE: When I first started working for Bosch 18 months ago there was definitely a lack of awareness about what a pedelec was, especially going into a bike shop that wasn’t already selling ebikes. I’m not just talking about Bosch, I’m talking about ebikes in general.
Between then and now the attitude has completely changed.
The questions aren’t around, ‘What’s an ebike?’ or ‘Who are you?’ The questions are around, ‘How can I service an ebike?’ ‘What sort of customers am I looking at?’
I think people have started to realise that there is actually a great market here in Australia and everyone is looking forward to getting the training, done by us.
BT: What do you think the keys will be to increasing dealer support going forward?
CB: Last week (29th September 2016) through BIA (Bicycle Industries Australia) Bosch sponsored an ebike forum where we brought the industry together to actually get the feedback of what the industry required to move forward and grow the industry more than it has.
We have taken that on board. Again in model year 2017 we’ll be doing dealer camps.
We’re also going to be doing promotional videos and a lot more marketing activity. For example this Sunday (9th October 2016) we’ve got the Go Bike Expo (part of Around the Bay in a Day in Melbourne) where we’ve got six of our customers (bike wholesalers) with a test track, similar to what we did with Sydney Spring Cycle last year.
BT: What growth do you foresee in the Australian ebike market over the next three years in particular?
FB: According to our experience with other regions, Australia is currently in the ‘early adopter’ phase. So people buying pedelecs here now are well educated.
In the next three years, to achieve a breakthrough here, we would like to achieve at least a 3% market share of the total bicycle market. That’s how we measure markets.
Let’s say at 3% to 5% we have to achieve a market of around 50,000 to 60,000 units sold per year. I’m talking about the entire pedelec market. (not including throttle controlled ebikes)
Most Australian wholesalers are now starting to import pedelecs in a serious way. It’s not just one container to test whether the market exists or not. Some of them are now importing more than four digits each year. (ie quantities exceeding 1,000 units) This shows that they’re committed.
We think that the Australian market for pedelecs only, this year (2016) is below 15,000 units. This is our assumption. It excludes throttle controlled ebikes.
BT: In Australia most of the ebikes imported, until now at least, have not been pedelecs, but lower priced, throttle controlled, 200 watt ebikes. That continues to be a large part of the market. Is Bosch going to take part in that market?
FB: From our side as Bosch we first address only the pedelec category. But I know that the word ‘ebike’ includes everything electrified.
But I’m only talking about pedelecs, meaning no throttle powered bicycles or any categories other than 250 watt rated power limited to 25 kph assist.
Usually in new markets you see different types of ebikes. As the market grows we believe that the pedelec will keep pace and other categories will move to being niche products.
That’s because the pedelec is well defined and this is the product that we’ve seen as most required by the customer.
In Europe according to one report around 80% of ebikes sold are pedelecs. This is the minimum. We think it’s more than 90%.
BT: Who do you see as the main drive system competitors, both now and going forward over the next three years?
FB: In terms of volume sold in Australia, the biggest are hub systems imported from China. But those are not our competitors.
We compare ourselves to the premium quality ebike systems. We know that there are some competitors, but we don’t yet know if they are serious or just testing the market so we don’t feel any competition today.
BT: Given the rapid growth of e-mountain bikes and the launch at Eurobike of the MTB specific Shimano e8000 model, can we expect new models from Bosch soon?
FB: Of course we are continuing our innovations and improving the systems. In the coming years we will release new systems, that is for sure.
