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So, no firms are insolvent at this point of time. That's good news.

The different regions (China, India, and Brazil) are certainly following three different paths. Let's look at Brazil as there has been a lot of shopping activity. To recap, going into the last rollover, Wicked Wheelz had been bought by Spoketacular Ind. One has to assume that Spoketacular is happy with its purchase as they've continued to hold Wicked Wheelz. The precedent set Spoketacular has been followed by Wheelie Good Bikes, who have bought High Gear. But in a surprise move, the Racing Bike Company has bought Spoketacular Ind, creating a mega-firm comprising the Racing Bike Company, Spoketacular Ind, and Wicked Wheelz. That must have been expensive. The question now is, will the Racing Bike Company be able to realise enough of a gain from their subsidiaries to cover the premium they paid to acquire Spoketacular?

All the firms that have undertaken purchases, have taken a hit to their SHV. But, it will be interesting to see by how much they bounce back.

It's interesting to look at the revenue in Brazil. Majestick's revenues topped-out in 2017, and have fallen back in both of the previous two years. Likewise, the Racing Bike Company has also experienced a slide in its revenue. Mind you, the revenue of the RBC is effectively the sum of what they are doing, plus that of Spoketacular and Wicked Wheelz. Can they capitalize on that in the time they have left?

High Gear's revenues continue to slump. Hopefully their new owners can turn that around.

Over in China, the largest firm (Shanghicycles) is also experiencing a slump in revenue. In contrast, Galaxy Cycles and Cruise Cycles continue their long slow decline, with Cruise Cycles now selling less than when the management team took over the firm.

What can get them out of that funk?


Turning to India, it feels like a very different picture. Most firms remain on a steady climb upwards. Having said that Saikles INC seem to be pushing hard and are climbing steeply.

Overall, it feels as if total market growth has slowed. How will firms cope with a less munificent environment?

The individual results for revenue, show the detail of what's going on. All the Indian firms are comfortably in the middle of the pack, and I'd expect that they would be trying hard to keep things steady and stable.

BrazilMajestick Bike$89,345,040105,470
ChinaApollo Industries$68,663,84052,147
BrazilRacing Bike Company$67,722,14561,419
BrazilSpoketacular Ind$61,183,39959,025
ChinaBobs Bikes$60,433,05943,326
IndiaSaikels INC$58,291,53752,178
IndiaNeighbourhood Bikes$51,780,95038,822
BrazilWheelie Good Bikes$49,936,98043,317
IndiaDoggiez Inc$49,763,86249,260
IndiaLife Cycle$48,309,23243,497
BrazilWicked Wheelz$37,022,76753,571
IndiaVicious Cycles$28,800,10138,104
ChinaGalaxy Bicycles$17,615,67840,808
ChinaCruise Cycles$8,552,62829,478
BrazilHigh Gear$3,409,78914,433

The profit picture tells quite a different story; although India—as a whole—does seem to be quite comfortably placed. Rarely have I seen a region so consistent and stable.

ChinaApollo Industries$6,743,167$68,663,840$16,251,68810%
ChinaBobs Bikes$6,728,689$60,433,059$22,733,91011%
IndiaDoggiez Inc$6,082,080$49,763,862$13,246,21012%
IndiaSaikels INC$5,627,511$58,291,537$16,311,17710%
BrazilWheelie Good Bikes$4,689,880$49,936,980$18,088,0549%
BrazilWicked Wheelz$3,418,097$37,022,767$9,692,0159%
IndiaLife Cycle$2,657,098$48,309,232$3,382,1256%
IndiaNeighbourhood Bikes$94,819$51,780,950$5,036,9600%
IndiaVicious Cycles-$900,648$28,800,101$11,538,320-3%
ChinaGalaxy Bicycles-$1,004,158$17,615,678$18,055,777-6%
BrazilHigh Gear-$2,790,198$3,409,789$7,180,950-82%
BrazilMajestick Bike-$3,857,737$89,345,040-$4,616,331-4%
ChinaCruise Cycles-$5,160,624$8,552,628$718,746-60%
BrazilRacing Bike Company-$7,903,879$67,722,145$3,154,280-12%
BrazilSpoketacular Ind-$8,270,347$61,183,399$3,132,705-14%

The recent shopping binge in Brazil has made a big dent if those firms' profits, but they could/should bounce back after this year. However, the result is that China is currently dominating in terms of profit.

Going back to Brazil, the profit picture is quite exciting, and not necessarily in a good way. The causes of Majestick's decline must be a source of some speculation. 

China too seems pretty messy, with some big declines in profit (and a few firms really turning things around).

India has had a mixed profit history. But with the exception (perhaps) of Vicious Cycles, they seem to be heading in the right direction. Doggiez Inc has done a very nice turnaround. It makes one think that last year was just a bump in the road for them, rather than a loss of direction.

Turning to the Advertising to Sales ratio, High Gear, coming of a very low base are advertising hard; but that is probably a function of their drop in sales, rather than a deliberate initiative. Overall, in Brazil, the Advertising to Sales ratio is about 17%

It it wasn't for Cycleangelo pulling back there advertising (from a spectacular high), then the average Advertising to Sales ratio in China would have been about 23%. It's interesting how different regions coalesce at different points. I wonder how much firms copy what other firms in their region are doing?

India, on the other hand, are more conservative than the other two regions in their advertising.


Looking at the data in this finer grained way gives a different picture (and different insights) compared to the more aggregated (region based data), that you've seen in the past.

ChinaBobs Bikes$46.24$43.29$6,728,689$60,433,05943,3262,000,000$3.36$86,579,114$92,476,515$4,695,068$22,733,910
ChinaApollo Industries$37.92$35.33$6,743,167$68,663,84052,1472,000,000$3.37$70,668,144$75,836,143$5,447,648$16,251,688
BrazilWheelie Good Bikes$32.38$29.72$4,689,880$49,936,98043,3172,000,000$2.34$59,446,818$64,752,319$486,429$18,088,054
BrazilMajestick Bike$29.28$27.40-$3,857,737$89,345,040105,4702,000,000-$1.93$54,807,614$58,558,614-$6,291,311-$4,616,331
BrazilRacing Bike Company$22.36$19.89-$7,903,879$67,722,14561,4192,000,000-$3.95$39,774,588$44,728,570-$19,961,474$3,154,280
IndiaSaikels INC$22.33$16.47$5,627,511$58,291,53752,1782,000,000$2.81$32,942,618$44,664,139$4,391,027$16,311,177
IndiaDoggiez Inc$17.05$16.75$6,082,080$49,763,86249,2602,000,000$3.04$33,494,984$34,090,084$5,039,042$13,246,210
IndiaLife Cycle$8.81$7.41$2,657,098$48,309,23243,4972,000,000$1.33$14,818,196$17,616,396$2,139,461$3,382,125
ChinaGalaxy Bicycles$7.72$6.37-$1,004,158$17,615,67840,8082,000,000-$0.50$12,746,916$15,430,079-$3,490,315$18,055,777
IndiaNeighbourhood Bikes$6.67$3.28$94,819$51,780,95038,8223,715,160$0.03$12,198,490$20,988,091-$1,680,230$5,036,960
BrazilSpoketacular Ind$6.62$5.93-$8,270,347$61,183,39959,0252,000,000-$4.14$11,858,720$13,241,720-$7,714,345$3,132,705
IndiaVicious Cycles$3.46$3.25-$900,648$28,800,10138,1042,113,421-$0.43$6,870,905$7,315,781-$2,161,668$11,538,320
BrazilWicked Wheelz$3.25$3.25$3,418,097$37,022,76753,5712,000,000$1.71$6,498,128$6,498,129$2,494,426$9,692,015
BrazilHigh Gear$1.79$1.79-$2,790,198$3,409,78914,4332,496,186-$1.12$4,474,695$4,474,697-$2,790,198$7,180,950
ChinaCruise Cycles$0.14$0.14-$5,160,624$8,552,62829,4782,000,000-$2.58$282,884$282,883-$7,121,776$718,746
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  1. Thank you Peter for the summary. It's really interesting to see the different worlds pan out especially in terms of profits. Being from India, it's funny to see most firms have a large dip in profits due to maybe high expectations on the returns from the market and maybe firms using that rollover to make moves without thinking about net income. The bikes are also not close to 1.00 in terms of specs and hovering around 0.75 for most categories, so maybe we are not making bikes that the market wants? Regardless, it's good to see the most of those blips have been just blips and now competition can maybe spark the market. 


    1. Peter Smith AUTHOR

      Let's look at those maps for a moment. Here is Brazil, then China, and finally India.

      With the exception of adventure bikes, the specs look pretty close in India. The more concentrated the bikes are, the more "head on" is the competition. Look at the two bikes in the Leisure segment in India. They are fighting for the same customers.  Yes, the density of customers is greatest at 1.00, but that doesn't represent what everyone potential customer wants. That's why placing a bike between, say, commuters and leisure segments can work well. There are customers there, just not in a great density (but great enough to be profitable).


      1. Peter Smith AUTHOR

        You know what, one of the reasons that the consumer surplus is so high, is because the bikes are so tightly clustered together.

        There are bits of the market that just don't find bikes in the 'centre' to be that attractive. Some folk what higher spec'd more stylish bikes. Some what more stylish bikes but don't want/need such high specs ...

  2. Peter Smith AUTHOR

    Efficiency matters .... so all this idle capacity must be a drag on the industries.

    So India must be pretty happy with its Profit per SCU (and Brazil must be worried).