Belgian based global parts and accessories brand BBB say there will be no changes to their Australian distribution after the company was bought by Pon Holdings, who also owns other brands distributed in Australia.
That was the message from their Export Manager, Freddy Keisse who made a flying visit to Australia during the second week of July.
Bicycling Trade caught up with Freddy during his stay in Melbourne for the following interview.
Bicycling Trade: What brings you to Australia?
Freddy Keisse: A visit to our distributor, who is Cambak (run from the same premises as Bikesportz in Melbourne). We started with our brand in 1998 and I think we started cooperation with David Cramer the owner of the company in let’s say 2000, but maybe even earlier. So we have a long relationship with David Cramer and Cambak. The reason for my visit this year is to have a meeting and to see each other and to talk with the sales people and to present product and to talk about strategy.
BT: How long are you in Australia for?
FK: Two days.
BT: Are you getting a chance to visit any dealers?
FK: I’ve done that in previous years. For this year it might be difficult, although this afternoon we have a group from Bicycle Superstore coming here, where I can do a presentation.
BT: How have you been finding the Australian market of late?
FK: I know the Australian market as being more ‘sportif cycling’ and rather a high end market compared to different other countries and that’s where we are with BBB. We place ourselves in the top part of the mid range and the bottom part of the top range and that’s also where I see many people riding bikes here in Australia. So I think we have a good customer base here that are really interested in buying our products.
BT: Do you only sell via IBD or do you sell via other channels? I’m talking not just in Australia, but globally?
FK: Globally, all IBD. At this moment we sell BBB in 47 countries. We started the brand in ’98 so it’s only 17 years of time. We work with an exclusive distributor base, so per country only one customer. That one customer is responsible for the complete sales channel from buying to selling, warranty, marketing and distribution and we only work with IBD.
BT: I’ve gone onto Wiggle’s website and searched for BBB and there are quite a range of BBB parts for sale, and this is the Australian Wiggle .com.au website address. I thought you said before you only sold through IBD’s, but here it is on Wiggle as well?
FK: Wiggle has physical shops and when somebody has a physical shop that we sell to, we are forbidden by law to tell them that they cannot sell online. So everybody has rights and obligations and that also counts for us. We do sell to Wiggle, we do sell to Chain Reaction but they also have physical shops and because we are available in their physical shop they are also available online and there is no way you can change it.
BT: I guess, unless you don’t sell to their physical shops either. You can’t buy anything from Specialized on Wiggle for example…
FK: You cannot buy that brand on Wiggle that is correct. I’m not here to talk about the other brands, I think you understand.
BT: Wiggle don’t have any physical shops in Australia…
FK: But they do have physical shops in the UK and it’s our UK distributor that supplies Wiggle and he supplies the physical shops of Wiggle in the UK.
That works in Belgium like that and it works in Germany like that and I’m convinced it works in Australia like that. In Australia there are also physical shops having web shops selling product.
BT: How have you found the pressure from concept stores? Also please compare Australia to other countries in the world. As you probably know in Australia there’s been huge investment by major bike brands into close relationships with IBD’s.
FK: It depends country by country. You see certain countries where it’s possible to integrate BBB products. In Specialized concept stores, because Specialized doesn’t offer everything, for example they don’t have brake shoes, they don’t have glasses anymore, they don’t have fenders, they don’t have work tools so we can perfectly be a partner there. But that depends country by country.
In some countries we even have the possibility to have a ‘blue zone’, a BBB section in the shop. In the other countries they allow us to be in the shop but not specifically as a ‘blue zone’ where we have to be spread out then. It all depends on the people.
We have a saying in our company that the people make the difference. The moment we have strong sales people and strong distributors then we get further than when we have a weak distributor. So there is a possibility to be partners, at least.
BT: Have you found that over the last five to 10 years additional competitive pressure or have you still be growing unabated?
FK: We have been growing because we are a neutral brand. We are a brand that is not linked to any component brand and we are a brand that is not linked to any bicycle brand. Because when somebody enters a concept store with a bike brand which is not the concept, then he wants to have a neutral product on his bike and then we can offer a BBB product.
I will give you an example and it is not a fight in between brand names, but a Cube bottle cage does not look professional on a Specialized bike. So when somebody enters a Cube concept store with a Specialized bike and he wants to have a bottle cage, he prefers to have a neutral bottle cage instead of another bike brand name. So we understand that in an IBD shop they go for a bike brand and also accessories of the bike brand, but beside that an IBD shop also offers the neutral brand and then we can say we are the neutral brand that fits the majority of the shops.
BT: Just nailing in more closely in this whole Wiggle/Chain Reaction international mail order topic, how do you think you can help the shops compete against that because it’s a huge issue in Australia as you are probably aware.
FK: I’ll give you an example, last year I was in Auckland in New Zealand and we visited bike shops there. We entered one shop and that shop keeper was really negative on ecommerce. He said, ‘You cannot imagine how long it’s been since I sold a pair of wheels! Everything is sold over the internet.’
I look around at his shop and there were no wheels. So I asked him, ‘Yes, but where are your wheels?’
He said, ‘I don’t invest in wheels anymore because I can’t sell them anymore.’
End of the conversation… we leave the shop and drive seven minutes to the next shop also in Auckland. We enter the shop and on the ceiling there are maybe 20 pairs of wheels.
My question to that shop keeper was, ‘I see a lot of wheels here can you still sell them?’ He said ‘Why wouldn’t I be selling my wheels?’
I said ‘Maybe because of ecommerce and things like that.’ He said, ‘You need to have the product available.’
He continued, ‘The moment that I have the product available and I can put it in the hands of the consumer, yes some of them might go away and buy it on the internet and that’s the actual medium and you can’t stop it anymore. But others buy the service that I offer and they also buy my wheels. Maybe the margin that I have on the wheels is not so high, but the rim tape and the inner tubes and the tyres and the cassette that they buy for that pair of wheels I sell at the full price.’ That way he also makes his margin.
I think product availability is a part of the success of a dealer even against Chain Reaction, Wiggle, Bike Discount in Germany and other international onliners. Are they there? Yes they are. Can you stop them? No you can’t. It’s a medium that you can’t stop anymore. But I’m sure that there’s a way you can put your service and your quality next to the service of the e-commerce. When you have the product available, I’m sure that price is not always the main argument. Quality and service for us are very important arguments to stay successful with your business.
The bike business will never go 100% to ecommerce. There will always be shop keepers who survive. How can they survive? By being different, by giving extra service, by giving good quality and by having the product available.
BT: We ran a story in March, ‘Pon Holdings Buys BBB’
FK: Exactly, just before the Taipei Show.
BT: Obviously Pon Holdings also owns Gazelle, Focus, Cervélo and they own Derby Cycle Australia based in Adelaide, so what will happen to distribution of BBB in Australia now that there has been the purchase globally by Pon?
FK: The management of Pon is taking over companies with the intention to keep the identity of the company. So when the contract with Pon was signed, when the company has been sold there has been made an agreement that BBB Cycling stays for a minimum five years at the same location. The management of BBB stays completely on board and one of the agreements that the owners of BBB made with the Pon management was that we could set our own direction. The saying is, ‘You never change a winning team’. The management stays on board of BBB with the intention to keep the same distribution as there was before. It means that in all the different countries where we have a distribution, we’ll continue with the same distributors.
Of course I don’t have a crystal ball and I don’t have to explain further that certain things can change, but it will be because of other reasons than the pressure of Pon directing us or telling us that we have to change to the Pon distributors. Because we do not believe in bringing a lot of different bike brands and the BBB distribution together with one crew of sales people.
The attention that the bike brands need to be sold in a country is too high to add a brand like BBB.