New | Chinese bicycle maker looks abroad for survival as sharing apps crimp sales at home
A proliferation of bike-sharing services -- more than 40 have sprouted in China since December 2016 -- have dented sales for manufacturers, forcing them to look overseas for survival.
Dongguan Tailing Electric Vehicle Co., China’s third-largest maker of electric bicycles, said it’ll be joining competitors in raising funds through an initial public offering (IPO) to finance its overseas expansion and create a time-sharing model, as a proliferation of bike-sharing services crimped sales at home.
“We will gauge demand in markets abroad, and invest to localise production there,” said Sun Muchu, vice president and a co-founder of the Shenzhen company, also known as TAILG, without providing a time or the size of the fund-raising. “We have seen exports increase at a rapid pace in the past few years, with the volume doubling year on year.”
Two weeks ago, TAILG’s competitor Jiangsu Xinri E-Vehicle raised 310 million yuan (US$45 million) through an IPO on the Shanghai Stock Exchange. Xinri said it would use its IPO proceeds to strengthen research and development capabilities to churn out high-priced e-vehicles, despite the cutthroat market.
TAILG shipped more than 20,000 battery-powered bicycles abroad last year, raking in sales of US$50 million.
Its main targets were the US, Europe and Southeast Asia, where the company saw demand for high-end electric-powered bikes increase sharply.