- ASX-listed Bike Exchange (BEX) has noticed the incredible value of the biking sector and built a pureplay global cycling hub for buying and selling bicycles
- The company services the $86.5 billion market by offering over 900,000 products from 1750 retailers through its online retail platform
- Bike Exchange has bolstered its service offering in North America through the recent purchase of cycling logistics and delivery specialist Kitzuma
- Looking ahead, Bike Exchange plans to leverage the scalable and proven Kitzuma model to complement its eCommerce arm with efficient bike delivery around the world
- Bike Exchange is on track to become a frontrunner in the global cycling and bike delivery market, and the company is the only listed business operating in this lucrative market
Sometimes, it pays to try to break into a saturated market with a new product, strategy, or delivery method. Often, it pays much more to find a niche and fill the gap.
ASX-listed Bike Exchange (BEX) has done the latter: while the bike retailing and delivery market may not be the first industry to pop into one’s mind when thinking about growth opportunities, Bike Exchange saw the incredible value of the sector and built a pureplay global cycling hub.
The company offers over 900,000 products from 1750 retailers and 1500 brands to service the US$59.3 billion (A$86.5 billion) biking market — a market set to experience compound annual growth of 8.2 per cent through to 2030, according to market researcher Grand View.
North America is a major contributor to the value of this market, and Bike Exchange has bolstered its services across the continent with its recent acquisition of cycling logistics service Kitzuma.
A bespoke platform and unique service
First and foremost, Bike Exchange’s business revolves around simplifying the process of buying and selling bikes and biking equipment around the globe.
Through its technology suite and online platform, the company helps cycling retailers and brands market their products through eCommerce channels to complement their brick-and-mortar operations.
Bike Exchange’s purchase of bike logistics specialist Kitzuma in late 2021, however, adds another crucial vertical to BEX’s operations: efficient white-glove bike delivery.
A major hassle for customers purchasing bikes online is that the bikes often arrive in boxes and cyclists have to unpack and assemble the product themselves. The time it takes to do this and the risk of incorrect assembly can often outweigh the convenience of an online order.
Kitzuma solves this issue by delivering bikes fully assembled and box-free. Moreover, Kitzuma delivers bikes and only bikes — meaning deliveries arrive in record time.
International potential
Kitzuma has an established business model and already makes over 9000 yearly deliveries off a base of over 40 active accounts.
While the company is currently purely operating in the North American market, part of Bike Exchange’s plan for its new subsidiary is to expand the bike delivery service into other parts of the world where cycling is a valuable market, including Europe and Australia.
The Kitzuma model is scalable, and Bike Exchange has already proven its ability to serve international markets through its online retail platform.
No need to reinvent the wheel
Across the eCommerce space, several businesses have established themselves as global market leaders by perfecting their niche.
eBay became a household name by building a dedicated platform for everyday users to sell and ship their personal goods.
Amazon did the same thing but partnered with businesses and manufacturers, instead. Amazon then changed the game completely by offering a bespoke express delivery service in return for a small membership fee.
Carsales.com established itself as a dedicated online used car service and now has a $6.4 billion market cap on the ASX.
Baby Bunting and Beacon Lighting have market caps upwards of half a billion dollars.
The lesson seems to be this: finding a unique retail market and building up a user-friendly, efficient and accessible sales channel for product distribution sets up a solid platform for major growth. Integrating delivery into this service adds another layer of potential.
Bike Exchange has managed to do just this with both its online bicycle buying and selling platform and its acquisition of Kitzuma for fast and effective bike delivery.
For investors, BEX is the only ASX-listed business specifically servicing the massive global biking industry.