One year after Giant Bicycles was founded by Mr King Liu in 1972, Tony Lo joined King to help run the company. After 41 years working closely together, they’re now cycling’s most enduring and successful leadership duo. Recently Tony recalled some of their long journey’s key moments.
Bicycling Trade: What was Giant like the day you started in 1973?
Tony Lo: It started very small. At that time there was a bicycle boom (the ‘10 speed racer’ boom) in the United States.
King Liu was a good engineer, but had found that making bicycles was not as easy as it looked!
So he started buying the right machinery from Japan and doing testing. In the industry, people were laughing, saying that everyone else was shipping bicycles except Giant. They said we were a ‘bicycle lab’, just testing, testing, testing.
After one year he finally thought he had one good bicycle made. Finally when King believed he had something to sell, the bicycle boom was over!
It was a difficult beginning. The first year after I joined we only produced 3,800 bicycles for the whole year, compared to 2013 when we made 6.3 million bicycles. Small difference! People were laughing at the small company with the big name, ‘Crazy!’
At that time we had about 50 people on staff.
BT: When did you start making bicycles under the Giant brand and not just for other brands?
TL: In the beginning, like most Taiwanese companies, we were just making bicycles for other brands.
My kids were growing up and we were shipping good bicycles out overseas, but nothing for Taiwan. I could keep some bicycles for my kids, but what about their classmates?
So in 1981 we started Giant Taiwan and because we couldn’t find good dealers, we developed our own stores. In five years we had 300 Giant stores in Taiwan and it was quite successful.
After that we decided to take the brand global, so we went to Europe in 1986-1987 then the United States, Australia and Japan.
So now the Giant brand is the majority of our business. We still keep a few good long term partners, (other global brands that Giant still manufactures for) but the Giant brand is the backbone of our business.
We have nine factories. One in Taiwan, one in the Netherlands and the other seven in China. We have our own companies in all the major countries. We’ve been in Australia for 25 years. In Australia, everybody (in Giant Australia) is Australian, in Japan, Japanese, in Germany, German. That is our philosophy. In the way we develop the brand, distribution channels and consumer service, everything is done for the long run.
Globally we now employ about 15,000 people. Last year our total sales were $1.8 billion US dollars ($2 billion Australian). That has continued to grow and makes us the largest bicycle company in the world.
BT: How do you divide your management responsibilities with King Liu?
TL: King is a self taught engineer. I still think he’s the best. He handles the manufacturing and technical side. I’m on the business side, marketing, product retailing, so the two of us really complement each other.
But we also keep challenging each other. We have a famous joke between us. I tell him, ‘I’m selling faster than you can make!’ But he says, ‘I’m making faster than you can sell!’
He’s no longer in the detail. He’s trained a lot of people. But he’s still very determined.
BT: Do you own your stores in Taiwan or are they franchised?
TL: In Taiwan we have about 34 Giant owned stores and the other 300 are franchised.
In Australia we own Giant Adelaide and Giant Hampton, but it’s really to develop models, to showcase how it can be done. Our idea is really to franchise.
The more we do, then the more demand comes back. For instance, customers say, ‘Your bicycles are great! Now I need a jersey, I need a helmet…’ So Giant is developing a whole gear line, step by step: helmet, shoes, sunglasses…
BT: What are some other key initiatives you’ve started recently?
TL: Six years ago, we decide to do something for women, so we created Liv Giant. That was a big undertaking. I said to our engineers that I wanted to develop models just for women. The first question they came back with was, ‘How many can you sell?’
I came back, ‘Maybe two hundred.’
They said, ‘Two hundred! Five different frame sizes, maybe a million dollars of development, just for two hundred?’
But I said that everything for women must be totally designed from ground zero. So it has taken six years, but now we have a complete line. It’s really starting to catch on. That two hundred has become two thousand, so it’s starting to make sense.
In Taiwan we wanted more people to ride, but they did not know where to go, so we created the Giant Travel Agency. It creates cycling adventure tours. We have organised events. Every year we handle about 300 groups doing cycle tours of Taiwan.
People come from China, Hong Kong, Australia. The standard program is nine days and you cover 950 kilometres around Taiwan. We host the tour and if you need it we even provide a bike. We provide technical support, arrange the hotels and meals. All you do is get up, have breakfast and ride.
BT: Are your Taiwan bike shops now taking trade-ins, like car yards?
TL: In Taiwan we have system where you can trade in. Say you have a Giant TCR but you want to buy a Propel. You can take your old TCR back. We sell the second hand bicycle through the shop.
We’ve only been doing this for about two years. There are a lot of young kids, say they want to ride a TCR but it’s too expensive for them to buy. But after a second hand bike is refurbished, it’s like brand new and they can buy it at half price of the original price.
We’re currently just trailing this in Taiwan, but we’ll see if we can do it in Australia and other countries later. Of course they must have the facilities to handle it.
Tony and I then talked about Schwinn. It’s now hard to imagine that for a century they were the all-powerful market leader in the USA. Space does not permit the full conversation with Tony to be included here, but you can read more, including Giant’s critical part in the Schwinn saga in the book, ‘No Hands, The Rise and Fall of Schwinn’.
BT: Back in your early days, would you agree that Schwinn was your big breakthrough?
TL: First of all, Schwinn was a very good company. We were very lucky to get to know them and for them to buy from us. We learnt a lot from them. Their quality standards at that time were very severe.
A couple of years later they had a big strike in Chicago and they shut down their factory. Giant undertook the supply responsibility. That transformed us from a small company to one making over one million bicycles. It’s fair to say that without Schwinn, there would be no Giant today.
I said that for the long term, ‘If you are 80% of our business, maybe we should look at a marriage.’
BT: So it was you who suggested that to Schwinn that they should buy part of Giant?
TL: Yes. We suggested it. And they thought quite seriously and at one point we thought it would become a reality.
Going Racing in Europe
BT: Let’s talk about the pro road scene and your collaboration with British designer Mike Burrows. How did that come about?
TL: In 1988, we were selling in Europe, but as a Taiwanese brand, it was very difficult. We were competing against European brands with famous names and 100 year histories.
So I asked myself, ‘What is the best bicycle in the world?’
The lightest bikes were carbon fibre. At that time there was only one Italian company and one French company, small companies, selling extremely expensive hand-made carbon fibre bikes.
So I challenged King saying, ‘I want to make carbon fibre bicycles.’ This is why I respect him so much. It took him two years. We could only buy carbon fibre thread.
We bought German machinery to our design. We bought chemicals from Switzerland and developed our own processes. In two years we were manufacturing in house, from thread to carbon fibre bicycles.
Of course we learnt a lot from mistakes, but we were the first company that could mass produce carbon fibre bicycles.
The rest could only do hundreds. We could do thousands.
But we wanted the best design to use with carbon fibre. At that time Michael Burrows had done the Lotus. He was a genius who really knew bicycles. So we met. He said, ‘No your bicycles are wrong!’
He told us many things and we asked him to work for Giant.
He said, ‘I’m not a good employee! I stay up late. If I drink too much I won’t come into the office!’ We said fine. So he became a consultant designer.
The first project we worked on was the one piece TCM. It was easy for him to draw, but it took us a lot of engineering work to make it.
When people rode it, it was unbelievable. Light, stiff, strong. That was the breakthrough. Because our bicycle was so good, the ONCE team (former leading Spanish pro road racing team) came to us. Pro racing was to prove that we were great.
BT: That ONCE team was a big step in global exposure for you. How much of a stretch was that sponsorship to you?
TL: It was an easy decision to me because it was part of our strategy. The only problem was that the UCI would not allow the TCM because of the shape. So that was the birth of the TCR. But even with the TCR we had a big argument with the UCI for two years. They said ‘You must have a parallel top tube!’ We said, ‘No, this is better!’ and after two years they finally allowed it.
After ONCE decided to quit, T-Mobile wanted Giant to work with them. After that Rabobank, and so on. For years we continued to invest in pro racing. But for us, it’s mainly product development.
It also helped Giant to lift our brand image. Finally this year we have the Giant Shimano team, so for the first time, ‘Giant’ is within the team name.
BT: Are you going to follow Trek and own your own team in the future?
TL: Preferably, we don’t want to do that. Uust like we don’t want to own our own stores, we want to franchise that.
BT: With the drug scandals in cycling, did you ever think of pulling out?
TL: We have said that we will only work with a clean team. If we could not find any clean team, then we would have to drop out. But we do want to continue, and even lead the racing to the right direction, because we’re in the bicycle business.
Australia: Giant’s Western World Prototype
BT: Let’s talk about your relative success in Australia. Do you think it would be fair to say that in Australia you quickly became the number one dealer brand? But in the USA by contrast, it has taken you many years to get to perhaps number three, still well behind Trek and Specialized. Why have the two countries been so different?
TL: First of all, we haven’t quickly become number one in Australia. We’ve spent 25 years working on that. I’m very proud of Graeme West and now Darren Rutherford and all of the people. We had to choose our retailers very carefully and earn their trust. I think that we have done a good job.
I think Australia has shown what is the power of the Giant brand and Giant products, because in Australia you also have all the other brands, the same competition as around the world.
Right now we’re number one in Taiwan and China, but of course, these are our home markets where we put more resources. I think of Australia like my home market.
I think an advantage we had was that in the past, Giant really cultivated Australia, when other companies didn’t really make the same investment because they thought it was a small market, which is true.
In the first years we were only selling 25,000 bicycles per year in Australia, where in the USA, a single big dealer might sell 20,000. So why care?
So the other brands had agents, thinking Australia was not important.
BT: Because of our small population, we’re only about 4% of your global turnover, but yourself, King Liu and your Vice President John Koo recently travelled to Australia together for about three days. It seems like a lot of effort for three days. Why did you come?
TL: I’ve been there many times, but for King it was the first time.
Taiwan showcases what we want to do in the Asian market. He already knows that well.
But for the Western market, Australia is my model. It has taken me 25 years to develop this model. Only now do I have a model that’s clear enough to show King.
I think from the overall operation wise; branding, positioning, management, retailing partners, Giant Australia would be a very good model for the West.
We are very proud of our retail partners. They trust us so much they don’t just say, ‘Grant’s Shop’, for example but, ‘Giant Sydney’. That’s a big commitment to us. We appreciate that. For us it’s a long term sustainable business.
BT: You seem to be expanding your Giant branded P&A range. Do you anticipate going to the same depth as Specialized and Trek have with P&A?
TL: Yes and no. First of all, I want to simplify. Maybe Specialized has 200 tyres for instance. Maybe we’ll have 25. We’ll make the choices more simple.
BT: Do you agree that emphasising model years leads to a lot of dated stock and discounting at the end of the model year?
TL: I think model years are necessary, especially for brand new products. You need the marketing and model years become important, also when Shimano comes out with something new. Then you have annual dealer conventions, trade shows, so it has become a way of business.
But I think the industry has overdone it. Everything has to be model year dated and after that it becomes obsolete. Everything comes out earlier, so that you’re changing perfectly good product mid season, when it has only had a change of colour. I think that is ridiculous.
For Giant we believe that for some special models we should run model years, but for the rest, if we can continue (the same product without a model year change), we’ll continue.
In Taiwan and China we don’t have this model year problem because for example in Taiwan we sell into our 345 stores that are already all selling Giant. I don’t need to ‘sell’ to the dealers, ‘This is my 2014 program. Buy this and not the other brand.’
We have no catalogue in Taiwan because we don’t need one. People come into the store and are shown all the different options and buy what’s there. It’s like a restaurant.
Because we have this experience in Taiwan and China, we know this can work. But in a lot of other markets, dealers still expect new model years, and everybody is dumping the old stock.
But step by step, because we’re the manufacturer, we can control inventory. We don’t want our dealers to buy excess inventory.
We say, ‘Don’t worry. Just buy enough, exactly what you need. We are reliable. Don’t buy too much and then wonder how to sell it.’
In the past dealers would say, ‘What is your next special?’ because we might have excess inventory, but now we have very little. That’s good because everything’s at the regular price.
I think this will take time, five to 10 years, for model years to become less important. But if Giant is successful, it will happen faster.
Transforming a Nation’s Cycling Culture
BT: Can you explain to Australian readers in particular, the public profile that King Liu has in Taiwan and the influence he’s had in transforming the bike culture of Taiwan?
TL: Twenty years ago we started our Giant Cycling Foundation. Through this we wanted to promote cycling sports, but also do advocacy and convince the Government to build up cycling in Taiwan.
I think our key involvement really started in 2007 when King decided to ride around Taiwan before he retired. At that time his health was not that good and he was already 73 years old.
It turned out to become big news. People were thinking that riding a bicycle around Taiwan was crazy! But they saw that a 73 year old could do it. They saw that he really enjoyed it and was feeling young and revived again.
So it became a fad. Now our travel agency handles 300 groups per year. This was the beginning of the sports cycling boom in Taiwan.
King continued to use his influence, along with our cycling Associations and the government has been very supportive.
Seven years ago there were less than 100 kilometres of cycling paths in Taiwan. Right now it’s more than 2,000 kilometres and continuing to grow.
Our goal is to make Taiwan a ‘cycling island’.
The most difficult part is how to make our cities cycling friendly. Again King took this challenge upon himself and today you see the ‘YouBike’ (bike share bikes) in Taipei.
It’s very, very popular and all done by Giant, the total system. We’ve set up a company to run it. Right now we have about 130 stations with 5,000 bicycles. Last Saturday alone we had 60,000 people use YouBike. For the year it’s 12 million people. It’s already become part of daily life for Taipei people.
Three years ago, people said you couldn’t ride a bicycle in Taipei, ‘Dangerous, hot, raining!’ It’s changing. We’re not making money from it. Our purpose is to make a cycling friendly city.
Now people say, ‘If everybody can ride a YouBike so inexpensively, nobody will buy a bicycle!’ but I don’t believe this is so. After people ride a YouBike, now they discover the fun of riding bicycles and want their own bicycle. That’s what’s happening.
Because Taipei has been so successful, all the other major cities want to follow suit, so they’re coming to Giant, asking for YouBike. Within another five years, all the major cities in Taiwan will have it.
Even today, foreign countries are already asking us for our system, but first we need more experience, then we would need local partners to operate the system, working with the local government to come out with the right plan.
It’s helping the traffic. People are happy and becoming more healthy. It’s a big thing.
Now we want to use ‘Taiwan Cycling Island’ as an example for promoting riding. I cannot see any other place where it cannot happen: Australia, Singapore, Malaysia and of course China.
After his Taiwan ride, King Liu rode from Beijing to Shanghai, 1,688 kilometres. It was big news in China.
This year he’s 80 years old. In May he is going to do the Tour of Taiwan again, but plans to improve. The first time, he took 15 days, this time, 12 days. He’s stronger, and faster. You wouldn’t believe it.
If you ask me, ‘Is there anything you regret?’ I would say there’s only one thing: that we didn’t start cycling much earlier as our lifestyle hobby.
Of course, we test rode bikes, but only for business. In the past, even me, I believed that Taiwan was not suitable for riding bicycles. How wrong! Now I’ve already ridden around Taiwan five times. This year I’ll be riding around Taiwan with King in May and again in November.