The value proposition is intimately related to the positioning strategy. The marketing strategy is built on segmentation, targeting, and positioning. A company segments the market into groups with different needs, targets one or more of those groups that it can satisfy in a superior way, and positions its offering so that the target market recognizes the company's distinctive offering and image.

A customer-focused value proposition is the end result of successful positioning. It expresses a cogent reason why the target market should buy the product.

This definition is inspired from the excellent book "Marketing Management", by P. Kotler and P. Cunningham.

What would be the value proposition for e-bikes? I think it would be something along the line "an efficient, healthy, and clean commuting vehicle". I still have to put some thought into it...

It seems that e-bikes are on the rise in Europe as well. More surprisingly, Europe has several manufacturers of high quality e-bikes. The European brands are of notoriously higher quality than Chinese ones. Of course, there might be exceptions.

Provelo has a good summary page (in French) about e-bikes in Belgium and Europe in general. The page mentions several links to European e-bikes sellers and manufacturers.

The Ion Style, a high-end e-bike from Dutch manufacturer Sparta

In North America, European brands enjoy a good reputation, and this is particularly true for vehicles (cars, bicycles, ...). On the contrary, Chinese products suffer from bad reputation (this is one of the reasons local sellers buy Chinese components and rebrand the products as "Canadian").

Selling European brands of e-bikes in China might not be realistic given the higher price and price sensitivity of Chinese buyers. However they might have a good future in North American markets. Conversely, it is very difficult for Chinese e-bike sellers to penetrate the European market, because their low price alone is not a sufficient differentiation factor to capture a large share in a market where consumers are not very price sensitive and clearly favor local brands.

When we think about evaluating an opportunity, we tend to think first about doing online research and writing a business plan. However the comfort of researching from home and the huge amount of data available on Internet can be misleading. In particular, it can lead us to underestimate the importance of primary data - e.g. data collected first-hand from the persons themselves (customers, suppliers, etc.).

Tired of spending hours at a time in front of my computer, I decided on impulse to visit a few e-bike shops in Vancouver. It proved quite interesting, because I was able to collect data that are usually not readily available online. I spent half an hour writing down general questions that I would like to ask to the shop owners. The questions allowed me to understand their positioning and their position in the supply chain.

Whereas the components of positioning are quite visible (price, store location, products and services, marketing, etc.), the supply side of the business is much more obscure. I am mainly interested in knowing where the retailer buys from, if he customizes the e-bikes locally before selling them (or even manufactures some parts), if he has some exclusivity deals, and more importantly whether he uses the OEM brand or his private brand.

E-Cycle store in Vancouver

Actually, I unexpectedly gathered other interesting insight from shop owners, such as how they select their suppliers in China and how to navigate Canadian bicycle/motorbike regulations. I believe that I would never have found this information on Internet, so this 2-hour city trip proved indeed very useful.

Additionally, meeting with e-bike entrepreneurs in person and touching (and driving!) the products boosted my motivation. Internet is great, but it cannot replace real-life contact.

What does an electric bike look like? Nothing better than a couple of images and videos to make this great innovation more tangible.
Jonathan Weinert is incredibly knowledgeable about e-bikes in China. He even shot a few videos: life and e-bike research thoughout East Asia, and electric bikes in China.

And here are a few pictures of typical e-bikes.

By Lightfoot Cycles

By Synergy

Ok, the title of this post might be a bit too bold. But the essence is true. I just returned from a two-week stay in Shanghai to settle down in Vancouver, and I am thinking about what I have seen in Shanghai.

First, note that I did not go to Shanghai for business purpose. Of course I couldn't help thinking about LEVs and examine the market from a simple visitor's perspective, i.e. wandering around in the city and imagining how LEVs (light electric vehicles) can be used and sold profitably in a fast-developing city like Shanghai.

In theory, and according to the paper I wrote a few months ago, Shanghai is a perfect market: a fast-growing, polluted, traffic-jammed, overpopulated Chinese city with a growing middle-class, and located close to potential manufacturing facilities.

Unfortunately, I have to be honest and admit that what I saw in the city does not bode well for the LEV venture. The vast majority of people still uses low-end rusty bicycles. They rely intensively on their bicycles and use them in every possible situation, including to pull carts, to carry people and all sorts of stuff you cannot even imagine, all that in frantic traffic. In other words, they are very innovative for using their bicycles as multi-purpose transportation tools.

I cannot imagine the technical specifications of a LEV that could be used safely in all these ways, and there is absolutely no way it could be produced profitably given the ridiculous amount of money they are able/willing to spend on it (it's not even worth doing any financial analysis). To conclude, we can forget about selling LEVs as mainstream vehicles in Chinese cities.

Of course, it doesn't mean that the venture has to be abandoned here. First, we can examine how to produce the LEVs in China and market them in North-America and Europe. Second, we can consider targeting niche markets in China, such as golf court vehicles (golf is expanding fast in China) or recreational vehicles.