What is the driving force behind China's Q3 bike exports touching 25-year high?

(Photo/Xinhua)

China's bike exports hit 1.1 billion U.S. dollars during the third quarter, the highest quarterly tally in 25 years. What is the driving force behind such strong growth?

From January to September, China's output of bicycles and electric bikes both posted double-digit growth, data from the General Administration of Customs showed.

The factory of Phoenix Bicycle, located in Danyang, east China's Jiangsu province, mainly produces bicycles and electric bikes for export. Due to the outbreak of the epidemic, it was difficult for the factory to recruit workers during the first quarter of this year. Coupled with the lack of supply of upstream parts and weak downstream demand, the factory's output was less than half of its capacity.

However, since June, the entire industry has been on a roller coaster.

"Thanks to the strong demand in overseas markets, our order volume has increased rapidly. During the June-October period, our sales surged 50 percent year-on-year compared with the same period last year," said Yu Yuefeng, general manager of Shanghai Phoenix Import & Export Co., Ltd.

A staff member revealed that at present, the company has operated at full capacity, and the bikes produced will only be stored in the warehouse for a few days for turnover.

The biggest challenge nowadays is that as the order volume is too large, the company has failed to fill the orders; the current orders have been scheduled for the second quarter of next year.

The bicycle industry has seen a continuous growth of more than 100 percent in gross merchandise volume (GMV) during the past six months, especially during the September Purchasing Festival, where the annual growth rate of order volume in the industry has reached 220 percent, according to Han Jiao, operations manager of bicycle industry at Alibaba International Station.

In addition to the short supply of exports, the domestic bicycle market is also booming, with orders far exceeding production capacity. This has also led to a very tight supply chain for bicycles, a shortage of spare parts and a longer supply cycle.

"As of October this year, the company's total bike sales have been close to 4 million, with a sales increase of 70 percent and a profit increase of about 70 percent, of which the growth of strollers has reached 100 percent, " revealed Zhang Yanhe, deputy general manager of Shanghai Forever Bicycle Co., Ltd.

Zhang added that the orders the company placed with the factory in September this year can only be scheduled for delivery by the end of the year by the assembly line.

Industry insiders analyzed that an important reason why the bike industry has witnessed such a strong growth is that people looked for an alternative to crowded buses and subways amid the epidemic. In addition, residents unable to go to their gyms tried to find another way to exercise, further promoting the growth of bicycle sales.