Latest / The Pivot Podcast with Fexingo: How Businesses Change Direction and Survive Disruption / How a 50-Year-Old Bicycle Company Pivoted to Electric Mobility
Transcript
- Lucas: Luna, when was the last time you saw a kid learn to ride a bike without training wheels? Luna: Probably a few years ago. My neighbor's son — he was maybe five. Why, what's your point? Lucas: Because today, that kid might not need training wheels at all. He might start on an e-bike. And the company that's quietly riding that wave isn't a flashy startup — it's a fifty-year-old bicycle manufacturer from Taiwan called Giant. Luna: Giant as in the world's largest bicycle maker by revenue, right? Lucas: Exactly. They produced about 6.6 million bikes in 2024. Founded in 1972 as an OEM for Schwinn, then pivoted to its own brand in the 1980s. But the pivot we're talking about today is their shift to electric mobility, starting around 2015. Luna: So they went from making Schwinn's bikes under contract to — what, now e-bikes are a third of their revenue? Lucas: By 2025, e-bikes were 35% of Giant's total revenue. That's roughly 1.2 billion dollars out of a total of about 3.4 billion. And the interesting part isn't just the number — it's how they did it without destroying their core business. Luna: Right, because that's the classic tension in a pivot. If you go all-in on electric, you risk cannibalizing your traditional bike sales. But if you go half-heartedly, you get crushed by the startups. Lucas: Giant avoided that by making three specific strategic bets. First, they built a dedicated e-bike R&D center in the Netherlands in 2016. Not in Taiwan, not in China — the Netherlands, which is the most e bike dense country in the world. Almost one in three bike trips there is on an e-bike. Luna: So they planted their flag in the hardest market first. If you can win in the Netherlands, you can win anywhere. Lucas: Second bet: they partnered with Panasonic for battery technology. That might sound obvious now, but in 2015, most e-bike brands were using generic Chinese cells. Giant locked in a supply agreement with Panasonic's lithium-ion battery division, which gave them a reliability edge just as e-bike battery fires started making headlines. Luna: Panasonic was already making batteries for Tesla at that point. So Giant basically piggybacked on automotive-grade quality for a fraction of the cost. Lucas: Third bet: they retooled their factories in Taiwan and China to produce electric drivetrains in-house, rather than outsourcing to a supplier like Bosch or Shimano. That's a huge capital commitment. Most bike companies buy the motor and battery from a third party and just assemble the frame. Giant decided to engineer and build the whole system themselves. Luna: That's vertically integrated. But it's also a bet that could backfire if the technology shifts. What if solid-state batteries make current motors obsolete? Lucas: That's the risk. But Giant's logic was that owning the drivetrain lets them optimize the bike as a system. Their 'SyncDrive' motor, for example, is tuned specifically for each frame geometry. They claim it delivers power more smoothly than a generic motor bolted onto any frame. Luna: I can see the marketing appeal. But did it actually work? I mean, did consumers notice? Lucas: The market data says yes. Their e-bike revenue grew at a compound annual growth rate of 28% from 2017 to 2024. And their gross margins on e-bikes are about 4 to 5 percentage points higher than on traditional bikes, because they capture more of the value chain. Luna: So the pivot wasn't just a survival move — it was a profitability play. But I want to push back on something. Isn't an e-bike just a bike with a motor? How is that a real pivot? It feels more like a line extension. Lucas: I think that's a fair question, and the answer is: it depends on how you define a pivot. If a pivot means changing your fundamental business model — like Netflix going from DVDs to streaming — then Giant's case is softer. But if a pivot means transforming your core product and the supply chain that supports it, then this qualifies. Luna: Because they didn't just add a motor. They rebuilt their factories, created new R&D centers, and shifted their supplier relationships. That's not trivial. Lucas: Exactly. And there's another layer. Giant also pivoted its brand positioning. Traditional Giant bikes were known for being affordable and reliable — the Toyota Camry of bicycles. Their e-bikes are premium. The top-end model, the Explore E+, sells for around four thousand dollars. That's a completely different customer. Luna: So they moved upmarket. That's risky because you can alienate your core base. Did they lose any traditional bike market share as a result? Lucas: Their traditional bike revenue actually grew 2% in 2024, but that's mostly because the overall bike market grew. Their market share in traditional bikes slipped about half a point — from 8.2% to 7.7%. So a small loss, but not catastrophic. And the e-bike gains more than made up for it. Luna: So they managed the trade-off pretty well. What's the biggest lesson here for other legacy manufacturers? Lucas: I'd say it's about timing. Giant didn't jump into e-bikes in 2010 when the technology was clunky and the market was tiny. They waited until 2015, when battery costs had dropped enough and consumer adoption was accelerating. Then they moved fast and deep. Luna: But waiting too long is dangerous too. Remember what happened to Kodak? They invented the digital camera and then sat on it. Lucas: Right. Giant's timing was Goldilocks. They entered when the market was about 2 million units globally in 2015 — small but growing. By 2025, that number was over 45 million. They grew with the market rather than trying to create it. Luna: And they had the manufacturing muscle to scale quickly. A startup would have struggled to build 1.2 billion dollars in e-bike revenue in under a decade. Lucas: That's the hidden advantage of a legacy business. You have existing relationships, factories, distribution networks. Giant's 12,000 retail partners worldwide gave them instant shelf space. A startup would have to build that from scratch. Luna: I'm also curious about the role of government policy. Europe, especially the Netherlands and Germany, has subsidies for e-bike purchases. Did that help Giant? Lucas: Hugely. In Germany, the government offered a subsidy of up to 25% of the purchase price for e-bikes in 2020 and 2021. Giant's sales there doubled. But the subsidy program has since been scaled back, and Giant's sales growth in Germany slowed to 8% in 2024. So there's some dependency there. Luna: That's a risk. If subsidies disappear, does the pivot stall? Lucas: It could, but Giant is diversifying geographically. They're pushing into the US market, where e-bike adoption is lower but growing. And they're also targeting the cargo e-bike segment for last-mile delivery, which isn't subsidy-dependent. Luna: So they're not just relying on one region. That's smart. Let me ask you — what's the biggest mistake Giant made during this pivot? Lucas: I think it's their direct to consumer push. In 2022, Giant launched an online sales platform that bypassed some of their dealers. That created friction. Several large bike shops in the US dropped Giant bikes in protest. It took them about a year to walk back the policy and offer revenue sharing to dealers. Luna: Classic channel conflict. You can't pivot your product without also managing your distribution relationships. Lucas: Exactly. And that's a lesson for any manufacturer going through a transformation. Your dealers are your frontline. If you alienate them, the pivot loses momentum. Luna: So looking ahead, what's next for Giant? Will they pivot again? Lucas: They're already experimenting with connected bikes — GPS tracking, anti-theft systems, ride data synced to an app. And they've invested in a startup working on swappable battery stations, like a network of charging lockers. That could address 'range anxiety' for urban commuters. Luna: So the pivot becomes a platform. They're not just selling bikes anymore — they're selling a mobility system. Lucas: Right. And that's the final lesson. A good pivot isn't a one-time event. It's the first step in a process of continuous adaptation. Giant used the e-bike pivot to build capabilities — battery expertise, software integration, data analytics — that open up future moves. Luna: I like how you've framed that. It's not about a single dramatic turn — it's about building a culture that can keep turning. Lucas: Yeah. And speaking of keeping things going — if these conversations have helped you think differently about your own work or business, one small way to support the show is through buy me a coffee dot com slash fexingo. It keeps us ad-free and independent. Luna: No pressure at all. Just if you find value in what we do here. Lucas: Exactly. Anyway, back to Giant. The thing that strikes me most is how unglamorous this pivot is. No flashy CEO, no billion-dollar funding rounds. Just patient execution over a decade. Luna: And that's probably the most replicable lesson for most businesses. Not every pivot needs to be a Hollywood narrative. Lucas: Right. It's about knowing your assets, timing the market, and having the discipline to invest deeply when the moment is right. Giant did that, and they're still riding.