Market development
and DTC brands
Kolofix has been closely monitoring the development of the cycling market since its founding in 2018. If a few years ago the number of bicycle manufacturers and brands with a direct-to-consumer (DTC) model was globally in the low tens, today we are witnessing a shift where a large portion of brands have moved to a direct sales model to the customer or to a so-called hybrid model where traditional sales model is complemented by direct sales. The number of these brands now clearly approaches two hundred, including the largest global brands.
The advantage of the DTC business model for bicycle manufacturers and cycle brands is the simplification and cost reduction of the distribution model. Typically, the manufacturer sells bicycles on its website or through other online sales channels, with the purchased bicycle being sent in a box to the customer's address.
However, this business model also has its challenges. It is up to the customer to unpack the bicycle from the box, assemble it, adjust it, and set it up so that it is fully rideable. In the event of a warranty being claimed, the customer is asked by the manufacturer to put the bicycle back in the box and send it to the manufacturer's address. In case of need for non-warranty service, it is up to the customer to find a suitable bicycle service in their area. All of these can be significant complications or obstacles that deter many potential customers from purchasing over the internet. The good news is that Kolofix offers solutions to all these challenges and complications.