East Asia Luxury Cycling Boom; Can you help me make sense of it?

Questions about bike hire abroad and everything light bike related. No off-topic chat please

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853guy
Posts: 106
Joined: Sat Dec 30, 2017 8:48 pm

by 853guy

If we take China specifically, it’s socio-culturally motivated. It’s important to remember that China underwent a massive economic reform under Deng Xiaoping beginning in 1978, with GDP growth estimated at between 9.5% to 11.5% annually up until 2013. Prior to that, China’s economic growth had been in decline under Maoist policies, with a decline of 13.2% between 1957 and 1978.

With reforms in privatisation, price flexibility, private business ownership, the reopening of the Shanghai stock exchange, foreign investment, and the reduction of tariffs, trade barriers and regulations, China suddenly had access not only to self-created wealth, but Western brands long considered taboo.

In a 2010 study carried out by McKinsey & Co, they found 45% of Chinese consumers equated higher price with better quality, largely because pricing was flatlined during the Maoist era and product development and choice was limited to state-owned production. With access to a market in which price varied enormously, and Western brands looking to capitalize on a growing and hugely populated economy, suddenly Chinese consumers could not only trade up, but for many trade up in ways previously unthinkable under Maoist rule, going from mass-market brands to "premium" ones. This has been boosted by consumers who have grown up during and after the cultural revolution, in which spending habits have changed enormously, with the burgeoning upper-middle class driving consumption and well as being more willing to allot a greater portion of their (increasing) income to discretionary purchases, becoming more sophisticated in their choices, and freedom of travel to and from Western countries. (1) (2) (3) (4)

Best,

853guy


(1) http://www.mckinsey.com/business-fun...atic-consumers

(2) http://www.mckinsey.com/industries/r...inese-consumer

(3) https://www.weforum.org/agenda/2016/...nsumer-market/

(4) Income in China has been increasing at an annual rate of 11% since 2010.

sawyer
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Joined: Fri Dec 15, 2006 7:45 pm
Location: Natovi Landing

by sawyer

Sky must be loving the growing army of Asians in their kit - the long-term strategy to diversify from football is slowly working
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Stiff, Light, Aero - Pick Three!! :thumbup:

by Weenie


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themidge
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Location: Auld Reekie

by themidge

TonyM wrote:
Tue Jan 23, 2018 2:43 am
Originally the "core" countries are France, Belgium, Holland, Italy and Spain. Look at the Tour de France (France), Giro d'Italia (Italy), Vuelta a Espana (Spain) and the classics in France, Belgium and Holland. Look at all these words like "peloton", "echelon", "directeur sportif", "gruppetto", etc...
Point of mildly interesting information for you all:
If you include Luxembourg as a 'core' cycling country (which i'd say it is) then the first winner not from any of those countries is the Swiss Ferdi Kubler in 1950, as well as those nations (not incl. Holland) being the first five in the 'most won by country' table too.
:hello:
Cannondale Supersix 2008 (weight: 7.3kg)
B'twin Triban 540 (in bits)
Vitus "Benotto" 979 (weight: :? )

jfranci3
Posts: 234
Joined: Tue Jul 26, 2016 5:21 pm

by jfranci3

The golf industry went through a similar boom. I recall sitting in on a product meeting where they were talking about how they could make non-PGA compliant golf clubs more high end for the Asian market. It was interesting - most of the talk was around more interesting finishes, more non-compliant heads, and the sound. The concern was making a club that looked more high tech rather than performance.

AJS914
Posts: 1949
Joined: Tue Jan 28, 2014 6:52 pm

by AJS914

For some reason cycling now appeals to the middle age guys with money. A certain type of guy likes to geek out on all the details and wants the best of the best. Cycling really strokes that - the best frame, group, wheels, more wheels, etc. and then it's all new again next year. They get a minor rush when their friends on the club ride ooo and aaahh over the latest and greatest. It's like getting the new iPhone every year and getting likes on Facebook.

The club I used to ride with when I was poor and 25 years old had a bunch of these guys. They'd go to Italy for great multi-day supported rides and come home with the latest Colnago as a souvenir. One year they were all riding the bi-titan dual downtube Colnagos. They all cracked within a couple of years.

I don't begrudge anyone who has a $5-10K/year budget for cycling. As along as they enjoy it, it's all good. I hope I have that kind of cycling budget some day. I probably spend $1K/year on cycling and to the guy that spends $200/year I probably look just like the guy that spends $5K/year. It's all relative.
Last edited by AJS914 on Thu Jan 25, 2018 5:29 am, edited 1 time in total.

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TonyM
Posts: 1989
Joined: Thu Jan 22, 2015 4:11 pm

by TonyM

AJS914 wrote:
Wed Jan 24, 2018 6:30 pm
(...)
The club I used to ride with when I was poor and 25 years old had a bunch of these guys. They'd go to Italy for great multi-day supported rides and come home with the latest Colnago as a souvenir. One year they were all riding the bi-titan dual downtube Colnagos. They all cracked withing a couple of years.
(...)
Did they buy them in Italy because it was cheaper or just as a souvenir or because of painting available in Italy ?

25 years ago European bikers wanted to travel to the USA in order to come back with some nice Cannondale, Scott etc.. bikes as they were much cheaper in the USA than in Europe (but they all struggled to get this back to Europe without paying the customer and taxes.....)

AJS914
Posts: 1949
Joined: Tue Jan 28, 2014 6:52 pm

by AJS914

Back then it was before the Euro so I bet they were somewhat cheaper. One of the guys in my club was Italian and he had connections to a bike shop in Italy so they probably got some additional discount by buying 3 or 4 frames at the same time.

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TonyM
Posts: 1989
Joined: Thu Jan 22, 2015 4:11 pm

by TonyM

AJS914 wrote:
Thu Jan 25, 2018 5:31 am
Back then it was before the Euro so I bet they were somewhat cheaper. One of the guys in my club was Italian and he had connections to a bike shop in Italy so they probably got some additional discount by buying 3 or 4 frames at the same time.
Yes Italian have always connections.... :mrgreen:

Did they buy only the frames in Italy or did they buy a full bike?

AJS914
Posts: 1949
Joined: Tue Jan 28, 2014 6:52 pm

by AJS914

I honestly don't remember.

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TonyM
Posts: 1989
Joined: Thu Jan 22, 2015 4:11 pm

by TonyM

To come back to the topic (sorry for the side discussion), I experienced the other way round as I move to Canada British Columbia 2 years ago...

I was amazed to see how many high end bikes and Rapha I could see over here compared to Europe (excluding the UK for Rapha)!
I really had the feeling that everybody meant they had to have a Dogma, XR4, etc...with SR or DA. Even if they started to bike 2-3 years ago, are 27 y.o and average road bikers. In Europe you buy these bikes when you are older usually and ride since you are 18 y.o. As a newcomer you go for Giant Trek etc... but not for a Dogma, XR4 etc...Also in terms of components I see that here in Canada BC and in the US Dura Ace or Super Record is largely used. Not in Europe. Ultegra and Record are good enough. DA and SR are seen as luxury.

But maybe it is a Millenial mentality over here in Canada/ USA where you can't wait to have everything.. :P ...I am old I suppose.... :mrgreen:

tmr5555
Posts: 289
Joined: Tue Jan 28, 2014 12:13 am

by tmr5555

TonyM wrote: But maybe it is a Millenial mentality over here in Canada/ USA where you can't wait to have everything..
I have always felt that the “buying with credit” concept is not as prevalent in Europe as it is in other places.
Excluding the UK, the UK has always been USjr in capitalistic ventures :)

Wookski
Posts: 556
Joined: Tue Feb 23, 2016 5:51 am

by Wookski

tmr5555 wrote:
Thu Jan 25, 2018 7:53 am
TonyM wrote: But maybe it is a Millenial mentality over here in Canada/ USA where you can't wait to have everything..
I have always felt that the “buying with credit” concept is not as prevalent in Europe as it is in other places.
Excluding the UK, the UK has always been USjr in capitalistic ventures :)
You may have “felt” this but the data shows that household debt to income ratios in the US are in fact lower than France, Belgium, Germany, Finland, Spain, Portugal, UK, Sweden, Ireland, Norway, Netherlands...

User avatar
wheelbuilder
Posts: 420
Joined: Wed Feb 08, 2017 2:10 am

by wheelbuilder

AJS914 wrote:
Wed Jan 24, 2018 6:30 pm
For some reason cycling now appeals to the middle age guys with money. A certain type of guy likes to geek out on all the details and wants the best of the best. Cycling really strokes that - the best frame, group, wheels, more wheels, etc. and then it's all new again next year. They get a minor rush when their friends on the club ride ooo and aaahh over the latest and greatest. It's like getting the new iPhone every year and getting likes on Facebook.

The club I used to ride with when I was poor and 25 years old had a bunch of these guys. They'd go to Italy for great multi-day supported rides and come home with the latest Colnago as a souvenir. One year they were all riding the bi-titan dual downtube Colnagos. They all cracked within a couple of years.

I don't begrudge anyone who has a $5-10K/year budget for cycling. As along as they enjoy it, it's all good. I hope I have that kind of cycling budget some day. I probably spend $1K/year on cycling and to the guy that spends $200/year I probably look just like the guy that spends $5K/year. It's all relative.
Great post. I concur, as this has been my experience as well.

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