Scalpers make a killing as new safety law leaves China’s 300 million e-scooter riders 200 million helmets short
- The country is facing a shortfall of 200 million cheap helmets as a new law requires e-scooter riders to don protective headgear
- Most companies making low-priced helmets have a daily capacity of under 2,000 units, and it will be some time before they can meet the nationwide surge in demand
Wang Zhenxiang, a grocery owner in Shanghai, recently rushed out and bought several hundred safety helmets for 30 yuan each (US$4.20). The 35-year-old is now making a killing, selling the helmets for 85 yuan each.
He is one of many scalpers enjoying a windfall, thanks to a new law requiring China’s 300 million e-scooter riders to wear protective headgear from the beginning of June.
The get-rich-quick opportunity stems from the fact there are nowhere near enough of the cheap helmets to go around. In fact, there is only enough for one in three drivers of the electric scooters, often referred to as mopeds in the West.
“I could trade them at a huge premium now with the helmets becoming an item highly sought after by local shoppers,” said Wang. “The price is set to rise further because I see more people coming to buy them.”
The Ministry of Public Security made the announcement in mid-April that all drivers of the scooters, also known as electric bicycles in China, would be legally obliged to wear helmets.
The country is facing a shortfall of 200 million cheap helmets, according to a research report by Sinolink Securities.
“The new policy is creating a new business for some people to get rich overnight,” said Yin Ran, a Shanghai-based angel investor. “We have seen some scalpers rush to stock up on helmets as they look to take advantage of an expected price surge to make a killing.”
Wang may be one of the more generous scalpers – a term for someone who stockpiles high-demand items and resells them at hugely inflated prices. An average helmet which recently would have cost about 30 yuan can now sport a price tag of more than 100 yuan. The price is steadily rising as the countdown to the new law continues.
China is home to 300 million e-scooters, which can cruise along at up to 25 kilometre per hour.
Until now, riders of the electric two-wheelers have not been required to protect their heads, and most have chosen not to.
Once the world’s “bicycle kingdom” as the vast majority of the population used bicycles as their main mode of transport, China is now the world’s largest market for e-scooters, accounting for 60 per cent of the global total.
The ‘bicycle kingdom’ goes electric, and Chinese-bike maker Yadea is ready
Existing manufacturing capacity safety gear is evidently inadequate.
Most companies making the low-priced helmets have a daily capacity of under 2,000 units, Sinolink said. It will be some time before the manufacturers can meet the nationwide surge in demand.
On the Chinese domestic stock market, not a single publicly traded firm lists helmet making as its core business.
The helmet is the second item of protective gear to trigger binge-buying in mainland China this year.
Face masks saw prices jump more than tenfold in late January as the deadly coronavirus spread across the mainland.
