In a piece entitled ‘Taiwanese Bicycle Maker Grows by Peddling Its Own Brand’, Wall Street Journal journalist Jason Dean profiled the rise and rise of Giant, and the leadership skills of Giant president Tony Lo.
Here are some edited extracts from the article, and for an interview with Lo conducted by BikeBiz.co.uk last year as well as the Forbes Magazine view of Giant a ‘company to watch’ click on the links at the base:
"About a decade ago, Antony Lo and his colleagues at Giant Manufacturing Co got some ugly news: Schwinn, the US bicycle company that was Giant’s biggest customer, was switching suppliers.
"Schwinn was buying about 80% of the bikes sold under its brand name from Giant, and Giant was devoting about 80% of its production to Schwinn. In one stroke, Giant, then strictly a contract manufacturer, was nearly run off the road.
"Instead, the change sparked the birth of a new brand that has grown into one of the top names in global cycling. Giant is now the biggest bike producer in the world, with more than 10,000 Giant shops spread throughout some 50 countries. About 70% of the roughly five million bikes it produced in 2002 were sold under its own name, which is the biggest brand in Taiwan and China, the second-biggest brand of high-end bicycles in the US, and third biggest in Europe’s high-end market.
"What Giant has accomplished in the past decade, says analysts, holds a lesson for other companies in Taiwan and Asia. Taiwan is home to countless little-known firms that have achieved success by making products for big brand-name companies. But the country has two global brand names of its own: Giant and computer-maker Acer Inc. The rest, meanwhile, are facing a squeeze as rising labour and other costs make Taiwan a more expensive place to manufacture – especially compared to China. As a result, there is an increasing need to find other ways to add value, such as building more brands of its own.
““The ultimate weapon you can use to differentiate yourself is the brand…if we don’t have our own brand, then we cannot control our own destiny,” said Lo.
"But moving from contract manufacturer to brand-name company can have its pitfalls, especially when a supplier finds itself suddenly competing with its clients. Giant, for example, still manufactures bikes for other brands including Trek.
““At first they were very concerned. But the final conclusion was that the market was big enough and there was enough room for us to grow and for them to grow,” Lo told the Wall Street Journal.
"Another lesson Giant learned very early on was the value of sponsoring competitive teams in its industry. It now appropriates 5% of its annual revenue, which totaled more than NT$15 billion (€413.2 million) in 2002, to promoting its brand, largely by sponsoring racing teams around the world. It sponsored its first Tour de France team in 2002, and plans to sponsor the China National Youth Team in the 2008 Olympics in Beijing."