Fujitec vs. Giant: Tianjin “dialogue” Between Cross-strait Bicycle OEM Giants

OEM giants from both sides of the Taiwan Strait gathered in "Tinmen". The former, driven by economies of scale and production costs, has created the world's most powerful bicycle manufacturing capabilities; the latter has shifted its turnover from global OEM to its own brand more than 30 years ago. Achieved the first place in the world.
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Fujita has a long road ahead

If people don’t have some understanding of the bicycle industry, it would be difficult for people to associate the hybrid style brand “Bond Fujita” with the world’s largest bicycle manufacturer. It is even more unbelievable that at the peak of production, one out of every five bicycles in the world was produced by this private enterprise that mainly produces OEMs.

“Bond Fujita” – a European and American name and a Japanese-style surname, actually fits the flow direction of the global bicycle industry: from Europe and the United States to Japan, from Japan to China’s Taiwan, from China’s Taiwan to the mainland… Tianjin Fujita Bicycle Co., Ltd. has become a new highland for global industrial transfer.

From the OEM model to the brand route, it is not a multiple-choice question between two development paths, but a knockout competition of transformation and upgrading, which will promote the reshuffling of the global bicycle industry. The inter-temporal “dialogue” between Fujitec and Giant provides a unique frame of reference for profoundly interpreting economic globalization and promoting high-quality development.

Fujitec vs. Giant 1

“Big Mac” also has anxiety

Tianjin is China’s bicycle manufacturing center. The massive orders for shared bicycles first landed here. Public information shows that after the bicycle-sharing “storm”, the final payment owed to Fujitec by Xiaohuang Bicycle was about 300 million yuan.

Relying on its strong manufacturing capabilities and the industrial chain integration capabilities formed by years of contract manufacturing, Fujitec just “flips” and still has the opportunity to learn lessons.

In Jinghai District, known as the “Capital of Bicycles and Electric Bicycles in China,” Fujitec invested 1.5 billion yuan to build a new factory with an area close to 100 standard football fields and 26 production workshops neatly arranged.

Fujitec also relied on diversified operations to hedge against the impact of declining orders. The aluminum profile project in the Jinghai factory achieved break-even within five months of being put into operation, and will reach a processing capacity of 30,000 tons in 2020; the carbon fiber frame project is currently suffering a slight loss, but the trend is improving…

The anxiety of the giant Fujita is exactly the anxiety of Giant more than 30 years ago.

In the 1970s, the global oil crisis gave rise to a cycling craze. At that time, many European and American countries imported bicycles from Japan. As demand surged, orders gradually flowed to Taiwan. Suddenly, a large number of bicycle manufacturing companies emerged in Taiwan.

In 1972, Taiwanese Liu Jinbiao founded Huge Machinery Company. By the time it established its own brand, Giant, in 1981, Giant Machinery was already the largest bicycle OEM company in Taiwan and the second largest in Asia.

If you continue to choose OEM, it means that you need to constantly grab orders. You must first “eat well” and “sleep soundly”. Enterprises also need to grow like people.

Fujitec vs. Giant 2

OEM is also a learning channel

The difference between Giant and Fujitec and other foundry companies – Giant focuses on what users need, rather than focusing on what its peers are doing.

Giant’s Tianjin factory and Fujitec’s Jinghai factory are 10 minutes’ drive away from each other.

Sorting out the development history of these neighbors, 1992 is an important time node, destined to be written into the history of China’s bicycle industry.

This year, Xin Jiansheng began to recruit troops and transformed from selling Chinese Amini bicycles to establish Fujitec; this year, Giant from Taiwan made final preparations to enter the mainland market; this year, Deng Xiaoping’s southern tour set off a new era The wave of reform and opening up…

Along their respective paths, Fujitec’s production capacity figures continue to soar – 600,000, 1.2 million, 5 million, 10 million, and 20 million.

In 1993, Giant set up a factory in Kunshan to deeply explore the mainland market and gradually appreciate the beautiful scenery of market opening. As of now, 5 of Giant’s 8 factories are located in mainland China, contributing half of its turnover.

Compared with Fujitec’s high OEM rate of 90%, Giant’s OEM turnover only accounts for 30%.

From OEM to ODM to OBM, Giant was “forced” to come out. Standing at the top of the brand and looking back at the OEM journey, Giant people finally realized that this was an important learning channel.

After years of development, Fujitec has focused on the “BATTLE” brand for domestic sales, with sales of millions of vehicles per year at its peak. Despite this, many consumers still don’t know the relationship between “BATTLE” and Fujitec.

The “Fujitec” hat has been worn by many products. In addition to pointing to Fujitec, which produces bicycles, it also refers to the brand of a money counting machine, the brand of an elevator, and the name of a commercial complex in Yiwu, Zhejiang.

There is no specific path to focus on OEM or branding. The market is changing all the time. Giant, which was in short supply in previous years, unexpectedly experienced a decline in performance starting in 2015. Currently, 2 of the 5 production lines at Giant’s Tianjin factory have been stopped.

Fujitec vs. Giant 3

Fujitec’s Problem with Industrial Transfer

Shimano is to bicycles what Intel is to computers and Qualcomm is to mobile phones… Japanese parts company Shimano is leading the development direction of the world’s bicycles through small transmissions. It has been imitated and never surpassed.

The component with the highest added value of a bicycle is precisely the transmission.

The China Bicycle Museum, located in Xingtai City, Hebei Province, collects bicycles from different periods around the world. Hamburg, Fengtou, Golden Hand… strange-looking bicycle brands carry hundreds of years of bicycle industry history in Western developed countries. ​

Industry insiders pointed out that the focus of the bicycle industry has shifted from Europe and the United States to Japan, which has precipitated bicycle culture. Moving from Japan to Taiwan has strengthened Shimano. Moved from Taiwan to mainland China, Giant was cultivated. Nowadays, faced with rising costs, many bicycle companies have moved to inland China and Southeast Asia.

At the Fujitec Toray factory, electric mopeds produced for European customers are growing at a rate of 20% every year despite retail prices reaching thousands of euros.

This kind of electric moped, which is popular in Europe, is still difficult for domestic consumers to accept. The biggest obstacle is the price. It is difficult to accept if it exceeds 3,000 yuan in China.

It will take time to cultivate the high-end product market, and the manufacturing capabilities that we are proud of have begun to transfer.

If we take a longer view, Giant began to transition from a manufacturing culture to a cycling culture a few years ago. Over the past decade, the cycling company has continued to define its product through frequent sponsorships of events.

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