How did Yadea become Tesla in the electric bike market?

Key Points:

1. Yadea’s meteoric rise to becoming the world’s largest manufacturer of electric bikes and motorcycles, selling 10.8 million units in 2020, showcasing its dominance in the Chinese market.
2. The strategic pivot from traditional motorcycles to electric bikes, initiated by Yadea’s founder Dong Jinggui in response to changing market dynamics, particularly governmental policies banning motorcycles in urban areas.
3. Yadea’s successful differentiation through high-end product strategies, focusing on quality and innovation, enabling it to withstand market challenges such as price wars and competition from emerging brands.
4. Expanding beyond China, Yadea has aggressively entered global markets, leveraging partnerships with multinational companies, celebrity endorsements, and participation in international events like FIFA sponsorship.
5. Yadea’s commitment to innovation and quality, demonstrated through accolades like winning design awards and utilizing advanced technology such as Panasonic batteries, ensuring its continued growth and positive reputation in the industry.

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How did Yadea become the king of e-bikes?

There are two “kingdoms of bicycles” in the world, one is Holland and the other is China. People in both countries are very fond of using bicycles to travel, and the number of bicycles per capita is also very high.

But if you ask which country in the world is the kingdom of e-bikes, there is only one answer: China.

According to the data released by the China Cycling Association in 2020, the annual sales of electric bicycles in China exceed 30 million, and the stock of electric bicycles is about 300 million.

In the same year, Yadea sold 10.8 million electric two-wheelers (including electric bikes and motorcycles), about a third of all electric two-wheelers sold in China.

This Chinese brand, founded in 1997, has become the world’s largest manufacturer of electric bikes and motorcycles by shipments. How does it do this?

Yadea’s entrepreneurial story

Born in 1970 to a rural family in Jinzhai county, Anhui province, Dong was selected to join the army after graduating from high school. After leaving the army, he went to work as a salesman at a motorcycle factory in Wuxi, Jiangsu province, where he learned a lot about motorcycles.

After working for a few years, Dong got married and opened a small restaurant with his wife in the town of Qianqiao in Wuxi. Although the food is home-cooked, the material were fresh and delicious, and the service of Dong Jinggui and his wife was very good, so the business had been good.

In the process of running the restaurant, Dong Jinggui made many friends from different industries, including a group of motorcycle business people. As they talked, Dong realized that as motorcycles became more popular, there was more money to be made in this business than in restaurants. So he sold the restaurant and used the money to re-open a shop as a motorcycle parts dealer.

Soon, Dong found that selling motorcycle parts was not as profitable as selling motorcycles, so he sold the spare parts he had in stock to others and started a motorcycle sales business. However, after a while in the motorcycle wholesale business, the Dong couple found that the technical difficulties of assembling a complete vehicle were not so high. It was easy for Dong, who had worked in the army repairing cars and motorcycles.

So in 1997, Dong rented a factory and set up Wuxi Dong Automobile Co., Ltd. (Yadea’s predecessor) to produce motorcycles.

In 2001, Dong renamed the company Yadea Technology Group Co., Ltd. In the years since, many Chinese cities have enacted “no motorcycles” policies to reduce pollution and traffic congestion. This has allowed the electric bicycle market to gradually replace the motorcycle market. In 2004, seeing the opportunity for market change, Dong decided to fully enter the electric bicycle market, and Yadi phased out the production of traditional motorcycles in 2005.

The local policy of banning motorcycles helped Yadea in part because they were once popular as China’s urban population became more sophisticated. Overseas motorcycle brands, such as Yamaha, Honda, Suzuki and Kawasaki, have quickly taken over the Chinese market.

But when the motorcycle ban came in, these foreign brands gradually lost ground. At that time, these overseas brands barely made electric bikes and electric motorcycles.

This is where the Yardea legend begins.

Yadea’s secret to success

The earliest bicycle factory in China dates back to 1937, but the first electric bike made in China is much later.

In Shanghai in 1983, Forever Bike bicycle factory mass-produced China’s first electric bicycle, the DX-130. Between the start of production in 1983 and the end of production in 1991, 45,000 units of the electric bike were produced and 805 were sold overseas.

For a long time after that, e-bikes were seen as a transitional product between motorcycles and bicycles. It caters to consumers who can’t afford a motorcycle yet and are not satisfied with using a bicycle as a means of commuting.

China’s e-bike market exploded in 2004 as the motorcycle bans started appearing in major Chinese cities.

2014 is the year Yadea becomes the king of e-bikes. In this year, China’s electric bicycle market took place a serious price war. Many brands born in the same era as Yadea began to decline that year.

As many as 30 million electric bikes were produced in China in 2013, which is the same as the current annual sales in the Chinese market. This means that a large number of small brands and manufacturers entered the market at that point in time and sold poor quality e-bikes at very low prices.

To get out of this predicament, Yadea began to formulate high-end strategies in 2015, such as being the first to bring overseas

By the second half of 2015, Yadea’s middle and high-end models were up 80% year on year. In 2016, its high-end model sales were up 63% year on year.

But Yadea, on the other hand, has not given up on lower-tier cities. It is expanding its dealer network in China’s third-tier cities and rural areas at a rate of nearly 2,000 stores a year. By 2020, it should have more than 20,000 stores.

That sets Yadea apart from the other high-end e-bike brand that was born in 2015, Niu Technologies. The latter also adopts a “high-end” product strategy, but in the market strategy, it is far behind Yadea.

This is the aim of Yadea’s success in China.

Now, the company is trying to sell electric bikes and motorcycles overseas.

After becoming a public company in 2016, Yadea began to expand globally

As we all know, Europe and the United States are also trying to promote electric cars and phase the traditional cars out. This trend has given Yadea access to the European and American markets.

In 2018, Yadea became a sponsor of FIFA. In 2019, It signed American actor Vin Diesel to be the face of its brand. In 2019, Yadea sold about 6.09 million e-bikes in 77 countries outside China, accounting for 11.7 percent of global e-bike sales.

To meet demand from overseas consumers, Yadea has also moved part of its supply chain overseas. According to the official introduction, it currently has two production sites outside China. Beckers Group of Sweden, Bayer AG of Germany, LG of South Korea and other multinational industrial enterprises are its accessories suppliers.

A few years ago, in Milan, Yadea unveiled a luxury version of its lithium-ion smart electric motorcycle, the G5. The product was the first to use the same Panasonic 18650 battery as Tesla in the electric motorcycle field, and won IDSA’s International Design Excellence Awards in 2019. Its successor, the G6, won the German Red Dot Design Award in 2020.

In the end, I have to say that if you found this article because you were wondering whether to buy an electric bike or electric motorcycle from Yadea. Then my advice to you is this: you can have no doubt that Yadea is a Chinese brand that produces shoddy goods and will disappear at any time. An e-bike brand that has been in China for 24 years and listed on the Hong Kong stock exchange in 2016, the company’s performance and reputation are getting better and better.

So, if you have your eye on a Yadea electric bike, buy it.