Folding Bikes - the folding bike business - data and research sought

In the real world gringo_gus is a Prof. at a Business School. This isn't the kind of research I normally do, but I am intrigued by the nature of the folding bike market and business. For instance, I might hypothesize that there is something to the product per se that for their manufacturers make this more than just a business; and/or it will be interesting to see if the relatively small makers - brompton, strida, DT- are able to maintain their independence. Why, for example don't Dahon buy Brompton ? Might they ? How do their business models work ? Etc.

So, for my own interest I am going to embark on a bit of background research, but if anyone has any bits or pieces of relevant information they want to share do post them here or PM me.

cheers

Prof g_g

Why would Dahon buy Brompton? They have overlapping products.

I guess they could, but I wonder why they don't. Is market share an advantage in this case? Do the brands share common suppliers where a larger buyer might have advantages in seeking lower supplier pricing? The Brompton has mainly a UK market and with much smaller markets in Asia an North America. Dealers are probably carrying the brand for its uniqueness. Costs-wise, the bikes are expensive, from mildly to very, depending on equipment. Would an Asian owner leave the company as is (privately held right now, I believe) or seek to move production to lower costs areas. Would that affect the perception of the product from the current customer base (I suspect so)? Would the lower costs attract newer customers? (I think so too, but at the expense of Dahon.)

It seems that Dahon is building their own version of a Brompton, so why purchase them?

It seems that Dahon is building their own version of a Brompton, so why purchase them?

Not to mention the Huge cultural incompatibility...

Why, for example don't Dahon buy Brompton ? Might they ?

Er, perhaps because it's not for sale ?

Brompton is a private company, it's history shows that if anything, it is a labour of love, with seemingly the same business strategy as the Morgan Motor Company - a company whose downfall has been predicted by the business world for decades !! Why on earth would Brompton sell out, especially to something they may well view as being akin to the evil empire ?

OK, well let me say first of all, it wasn't my intention to cause offence to anyone, bromptonites owners of the bike or people involved with the business, and if I have I apologize. My question was hypothetical.

I do find the answers thus far interesting, and they in themselves do say something about how various folders are percieved. So, to explain my question, why might hypothetically anyone want to buy the business that is brompton - for example me if I won the lottery - its because they have, from a compactness pov the best fold; and, certainly in the UK, a very strong brand, and a lot of loyalty to them. Now, I recognize that this is a long way from saying they are the best folding bike.

Why would, hypothethically, Dahon want to buy them, notwithstanding that they may have a quasi brompton on the way ? Well, I guess for that market share, the brand and so on, just like cadbury's bought green and blacks. Why would brompton sell - well maybe they wouldn't ala Morgan, but maybe they might be tempted by a huge pile of money. Maybe for them it could be winning the lottery. Now I appreciate we might be playing fast and loose with people's livelihoods here, and their businesses. But on the other hand, we are consumers, committed consumers too, and these are the lkind of commentaries that go on on financial pages all the time. To repeat my first point, I get a sense that there is a commitment to this game which is beyond business for a lot of the manufacturers.

And, I would add for me Dahon are not the evil empire, and their range is really great, their pricing and distribution opens the world of folding to a lot of us who otherwise wouldn't be able to enter it, what with limited DT availability in the UK (but yay velochocolate) and they deserve credit for being really imaginative. The customer service from their UK distributor has been second to none, too, imho...

It seems that Andrew Ritchie still has control of the Brompton Company but what happens when he's gone. Unless, like Willy Wonka, he can find someone to continue the business following his ideals then it may well be sold off.

Actually Umpa Lumpas do work at the Brompton factory, that's why the bike is so small.

OK, well let me say first of all, it wasn't my intention to cause offence to anyone, bromptonites owners of the bike or people involved with the business, and if I have I apologize. My question was hypothetical.

I do find the answers thus far interesting, and they in themselves do say something about how various folders are percieved. So, to explain my question, why might hypothetically anyone want to buy the business that is brompton - for example me if I won the lottery - its because they have, from a compactness pov the best fold; and, certainly in the UK, a very strong brand, and a lot of loyalty to them. Now, I recognize that this is a long way from saying they are the best folding bike.

Why would, hypothethically, Dahon want to buy them, notwithstanding that they may have a quasi brompton on the way ? Well, I guess for that market share, the brand and so on, just like cadbury's bought green and blacks. Why would brompton sell - well maybe they wouldn't ala Morgan, but maybe they might be tempted by a huge pile of money. Maybe for them it could be winning the lottery. Now I appreciate we might be playing fast and loose with people's livelihoods here, and their businesses. But on the other hand, we are consumers, committed consumers too, and these are the lkind of commentaries that go on on financial pages all the time. To repeat my first point, I get a sense that there is a commitment to this game which is beyond business for a lot of the manufacturers.

And, I would add for me Dahon are not the evil empire, and their range is really great, their pricing and distribution opens the world of folding to a lot of us who otherwise wouldn't be able to enter it, what with limited DT availability in the UK (but yay velochocolate) and they deserve credit for being really imaginative. The customer service from their UK distributor has been second to none, too, imho...

Apples and Oranges here, Prof. The two companies might make folding bikes, but they are intended for different markets. Dahon is a huge mass produced firm where volume rules all. While they have a sharp and strict quality control, the main purpose is quantity above all. That is in itself not a bad thing since this a for profit organization. Brompton is also a for profit firm, but their volume is far smaller. They are more of a craftsman orientated firm where the number of bikes produced is carefully regulated from a more hand crafted approuch. And quality control is more intergrated in the manufacturing process. There seems to be a bigger waiting list for Bromptons than for Dahons over all. The prices for both bikes are reflected in the availability or amount of bikes for sale at any given time.

Does it appear that I am fence straddling here? I can safely comment from both sides since I do own both brands!

This was posted several years ago regarding Dahon, Brompton & NeoBike:


Neobike manufactures the L-3 Brompton in Taiwan. The retail price is $250. If you're in Taiwan contact them to purchase one--they will refer you to a shop or sell you one direct. See my other web site, Buying a Brompton in Taiwan, for details. The licensed model is not sold in the U.S. (or Europe to my knowledge), and probably won't ever be. They also have a very wide variety of their own designs, none especially great, and none available in the U.S. due to legal issues with DaHon.

Neobike versus Dahon
Like most folding bicycle manufacturers, Neobike violates some DaHon patents (in particular, the fold down steering tube, used by on many folding bicycles, including Bromptons). I was talking to Joshua Hon (son of the founder of DaHon) about seven years ago, and learned the story. Neobike was started by individuals who were employed by DaHon, and who were sent to the U.K. to negotiate a licensing deal with Brompton. DaHon was going to manufacture the Brompton under license. Instead, these employees negotiated a licensing deal for themselves with Brompton, and started Neobike. DaHon sued Neobike. Even though this case started more than TEN YEARS AGO, it just came to conclusion in April 2002. Five Neobike employees were sentenced to five months in jail and DaHon can now move to recover monetary damages.


Likely a little sour taste in Dahon's mouth on this subject.

if anyone has any bits or pieces of relevant information they want to share do post them here or PM me.

I've heard from both Taiwanese friends and the internet that Strida is actually one of the best selling folding bikes in the world (although obviously not in the West).


Why would Dahon buy Brompton? They have overlapping products.

Not in my opinion. There are no Dahon bikes which prioritize compactness at a given wheel size over all else. All of Dahon's designs give a higher priority to either ride quality/performance or low cost (and they have even stated this priority explicitly).

Perhaps we like to think of it as a folding bike movement, rather than an industry, at the moment there is still the cottage industry feel to it, with people (customers) able to enjoy personal contact with a nimber of the companies involved. This can lure you into the impression that the god mammon isn't lurking down the corridor. There are a number of manufacturers making niche products (Brompton, Swift, Strida, Mobyke, etc), and people perhaps buy into the ethos as well as the product. I'm sure Dahon could cover all of these niches, if they so chose, but would people still be so keen to buy them ? I'm interested in why the Merc has not been more successful in the UK, if you can buy one for 280 pounds cash, you can spend another 50 on tuning etc., and still undercut the Brompton price by 250 pounds. So why aren't people snapping them up, instead of getting on a waiting list for Brentford's finest ? Is it ignorance, or image ?

Diode100 ditz: " instead of getting on a waiting list for Brentford's finest ? Is it ignorance, or image ?"

Probably both. Cycling down to a Thames Valley (read Silicon Valley) pub the other evening there were a 'yuppie' couple there, with obviously new folded up BRomptons by their chairs. My 'old' Matrix got a sneery look of contempt, because I wasn't a member of their club.

The Brompton has been iconised as a British groundbreaking product, it works well because of the neat fold and it has that 'expensive is better cachet'. But there are better designs around for less money. I hope that Brompton prosper, and they have weathered some storms, but Brit companies tend to suffer badly from cash-flow, lack of investment and far-sighted management and thus are sometimes unable to meet or profit from demand in boom times.

There is a turn-around for cycling in the UK at the moment, fuelled by high gas prices, and LBS's are telling me of busy times for servicing, sales and repairs. I'm not sure I'd want to buy Brompton as a going concern though, there are better investment and technology opportunities in Asia for instance, plus a larger market - where Downtube source their bikes.

I really like the idea of folding bikists as a social movement, and the analysis of mamon as the mammoth in the room, diode100. And coincidentally, I am one of those merc owners. I have to say, I am probably at or above the £50 spend on it, and it still needs to be "finished". I have been looking at how much second hand bromptons are going on ebay for comparison. This is an ongoing project, I am planning to post a comparison at the end, taking into account all the extra bits on the merc (that are worth having) etc etc.

More generally, thanks everyone, it is a very interesting project for me, I am going to find a way of following it up.

Snafu21, I agree. One of the reasons I couldn't bear to buy a brompton is that there is imho in the UK a "brompton type" with which I don't want to be associated... but, you know, that fold is hard to beat....

Ah, but on the othetr hand there is a long history of ''infidels'' buying up British Icons and turning them into highly desirable and profitable products & companies. Have you seen what has happened to Belstaff in recent years ? what used to be a smelly, dirty, black jacket you wore to ride your Velocette LE noddy bike, is now a cutting edge fashion item with show rooms in the best quarters of the smartest cities ?

But back to folding bikes, If downtube dont intend to import any more bikes to the UK until the present stock has been sold, I'm musing as to why they dont just flog all current UK held stock to one of the high street chains, Cyclerama or what ever, badged as something catchy, and start importing their full current, highly desirable, range, in particular the hub geared bikes ? Is it just anti-dumping regulations that is the problem ?

One thing I find fascinating about the folding bike world and in particular the business is the amount of passion (above profits etc.) that individuals bring - a sort of 'want to make the world better' zeal. I cant think of any who went into the business as a pure 'business' excercise, they all came from other backgrounds. Even Dahon is based on an individuals drive eg from Dr. Hon, Brompton - Andrew Ritchie, plus all the other movers ... Dr. Yan, George Lin, Alex Moulton, Mark Sanders, Peter Reich, Clive Sinclair ..... none of who appear to be typical 'tycoons' making mega profits like dragons off 'dragons den'.

'yuppie' couple with obviously new folded up BRomptons by their chairs. My 'old' Matrix got a sneery look of contempt, because I wasn't a member of their club.

The Brompton has been iconised as a British groundbreaking product, it works well because of the neat fold and it has that 'expensive is better cachet'. But there are better designs around for less money. I hope that Brompton prosper, and they have weathered some storms, but Brit companies tend to suffer badly from cash-flow, lack of investment and far-sighted management and thus are sometimes unable to meet or profit from demand in boom times.

The notion that there is a 'Brompton owner' type is highly specious. Although it is still mostly purchased by commuters there are those who buy it as a fashion accessory . There was a pristine pink one on e-bay a while back that the owner had kept just hanging on their wall, as 'design art'.
I have a Brompton, mostly for it's superior fold but I also love the look; I also have a Moulton, a Downtube and a Dahon; what type am I? ( rhetorical question )

Simple Simon suggests that pioneers of the folding-bike industry aren't just in it for the money and this seems to ring true. I'm not particularly up on the machinations of the Bicycle industry but I am involved in the Brewing Industry ( not just as a consumer I haishen to add ) and it's reached a stage where a few Companies own most breweries ( Inbev, Anheuser-Busch, Coors, Scottish-Newcastle ); they buy up smaller companies to control production and retail. They maintain the names but change the production quality, many consumers will still buy the name (brand loyalty or limited choice) even though it is essentially a different product. Another consequence of this is the illusion of choice, 8 of 10 pints bought in England are made by 4 Companies but there are hundreds of independent craft breweries eeking out a survival. This could easily apply to bicycles and is a reason why a huge concern like Dahon would want to buy out Brompton, if they could, in order to eliminate the competition.
If there is no ethical consideration in a business it is merely a money making machine; for instance, why produce folding bicycles if making guns could yield a higher return?

Was there a point in amongst all that?