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after several twists and turns, giant finally acquired stages cycling. on september 24, a beijing business daily reporter learned that giant acquired the assets of the american fitness bike brand stages cycling through bankruptcy procedures, and the transaction has now been completed. giant has always intended to acquire stages cycling to enrich its business lines and create a comprehensive cycling ecosystem. but before that, giant still has many problems to solve.

targeting the global fitness market

on september 24, a beijing business daily reporter learned that giant group, the parent company of giant, announced that it had acquired the assets of american fitness bike brand stages cycling through its u.s. subsidiary spia cycling inc. through bankruptcy procedures. the winning bid was us$20.1 million and the transaction has been completed.

giant has been interested in acquiring stages cycling. in january 2023, giant planned to invest $20 million in stages cycling to acquire more than 30% of its brand ownership, but as the acquisition plan progressed, the two parties were unable to reach a consensus on the terms and conditions of the final agreement, and the negotiations ended in failure.

a blessing in disguise. at that time, giant probably didn't expect that stages cycling would go bankrupt a year later. in april 2024, due to falling demand, cash flow and supply chain problems, stages cycling announced that it would stop operating and lay off all employees, and was forced to go bankrupt. subsequently, giant stepped in and obtained approval from the court responsible for the bankruptcy procedure for $20.1 million, and finally took stages cycling into its pocket.

stages cycling, which giant has set its sights on, is a well-known fitness cycling brand in the united states. founded in 2009, the brand is a disruptive brand that promotes the popularization of power meters. it was the first to produce affordable power meter models. its main products are indoor bicycles, power meters, and bicycle computers, which are aimed at experienced cycling enthusiasts and professional riders. at its peak, it was very popular on amazon.

ma gang, an independent retail commentator, said that from the perspective of layout, giant's acquisitions are a supplement and enrichment of its product line. by acquiring the stages cycling brand, giant further enriched its product matrix for cycling sports.

regarding this acquisition, paddy murray, vice president of global sales and marketing of giant, said that this acquisition aims to create a comprehensive cycling ecosystem, including indoor and outdoor, and enter the global fitness market. stages has an important market share in the fitness field, especially in spinning and indoor cycling.

according to guo bin, deputy secretary-general of the national sports industry research base of peking university, bicycles have evolved from their original attributes as a means of transportation to now also include attributes such as fashion, social interaction, and fitness. under the influence of this expansion, it has become an important trend for manufacturers to start the service-oriented process. as a long-established bicycle manufacturer, giant is also promoting the upgrade of functions and application scenarios. this acquisition can be regarded as a move by giant to expand its product chain and promote the process of product service, which will help the company's layout of future fitness and leisure products.

becoming a large and comprehensive global bicycle brand has always been giant's goal. giant is a brand of taiwan giant machinery industry co., ltd. the company was founded in 1972 and established its own brand giant in 1981. in 1992, it entered the chinese mainland market and established giant (china) co., ltd., starting a layout and development that lasted for more than 30 years. it can be said that giant is a bicycle brand that grew up with domestic bicycle brands such as phoenix and forever. currently, giant has more than 700 stores in the chinese mainland market.

regarding acquisition and development related matters, a beijing business daily reporter called giant for an interview, but no response was received as of press time.

franchisees do not make money

to create a comprehensive cycling ecosystem, giant needs to solve more than just performance issues. judging from the development of the chinese cycling market, cycling has been highly sought after in recent years, and the cycling market has continued to expand. according to the "2022-2023 global and china bicycle industry operation monitoring and consumer demand survey research report", the scale of china's bicycle market in 2021 was 194.07 billion yuan, and it is expected to reach 265.77 billion yuan in 2027.

although cycling is hot, giant is not making money. according to financial report data, giant's parent company giant group's comprehensive revenue in the first half of 2024 was nt$37.23 billion, a decrease of 12.6% from the same period last year, with a gross profit margin of 21.3% and a net profit after tax of nt$1.67 billion, a decrease of 17.1% from the same period last year. in 2023, giant group's revenue decreased from nt$92.04 billion (equivalent to eur 2.7 billion) in the previous year to nt$76.95 billion (equivalent to eur 2.27 billion), a decrease of 16.4%. revenue in the first half of fiscal year 2023 was nt$42.6 billion (usd 1.34 billion), a decrease of 5.4% from the same period last year.

giant mentioned in its financial report that the decline in performance was mainly due to weak sales in the low-end and mid-end markets in europe and the united states. in the first half of 2023, giant's sales in europe fell by 12% and in the united states by 44%.

compared with the weak european and american markets, the chinese mainland market has shown rapid growth. in the first half of 2023, sales in the chinese mainland market increased by 70%. but even so, the hot cycling market in the chinese mainland still failed to save giant's performance.

according to the person in charge of giant franchise in east beijing, although cycling seems to be hot, the benefits of giant are not very good. "we are not considering opening new franchise stores this year, as the benefits are not good. it is not certain whether there will be vacancies next year. now we are considering direct sales, as the benefits of franchise stores are not good." said the person in charge.

in ma gang's opinion, the giant brand is experiencing a certain degree of brand aging. compared with today's specialized, trek and other brands, giant's recognition among young groups is not high, and the giant brand as a whole lacks vitality.

putting aside the poor benefits mentioned by the franchisee manager, giant also has a certain shortage of supply in terms of production capacity supply. beijing business daily reporters visited several giant stores in beijing and learned that many bicycles in the store are out of stock and need to wait for about a week. in online channels, many giant road bikes are out of stock. as for when the goods will be available, the customer service staff of the giant flagship store said they could not be sure.

pan jun, a visiting professor at donghua university, expressed a view that the strong demand in the cycling market further highlights the insufficient production capacity on the corporate side, which puts higher demands on the production efficiency of brands.

as for the inability to keep up with production capacity, this is an industry problem. earlier, beijing business daily reported that due to the bottleneck of transmission technology, the production capacity of many brands of mid-to-high-end bicycles cannot keep up, but how to break the deadlock is a problem that cycling brands including giant need to consider.

beijing business daily reporter zhang junhua