Giant No Longer a Value Brand? A Tale of Two Similar E-bikes, Two Years & $900 apart

[SFHills]

Giant's initial reputation as a "value" brand among the big boys was due (in my eyes) from their introduction of the TCR/OCR lines in the late 90s. Since these road bikes only came in 3-4 sizes because of the sloping top tubes at the time, Giant was more efficient in production. Even then, they did get flak from certain people due to their sizing gaps.

I don't think ebikes allows them to find much room to play in the value space. There's too much competition on the lower end with start-ups and generics so you might as well try to see how your distribution network and quality comes into play. In fact, I think Giant's problem is the opposite of their initial value proposition of a smaller set of models to produce, in the ebike space they have too many models and too many variants for the various markets compared to Specialized and perhaps Trek. Think about the Giant explore, there are 2 base models in the US (the +2) and then the comparative Liv Amiti model but there seems to be at least 2 more Liv variants in Canada and Australia and who knows how many other Explores. In addition, I don't think their pricey ebikes are marketed domestically, just the Momentums (but I may be wrong there).

 

[FlatSix911]

Heh heh, 'Value engineering'.
We started using this cover phrase in the construction industry with clients when what we really meant was 'cutting corners'. We learned it from engineers. I think they learned if from the bean counters.

One of my favorite business euphemisms for cost-cutting.

 

[PedalUma]

It is very difficult to sell crappy stuff that is cheep when you as a salesperson know better. Big box stores have some bikes with waxy formaldehyde smelly tires you can slice with your thumb nail. So many people go for the low initial cost not thinking about overall value. What if value engineering looked at long-term value?

 

[Asher]

Giant's initial reputation as a "value" brand among the big boys was due (in my eyes) from their introduction of the TCR/OCR lines in the late 90s. Since these road bikes only came in 3-4 sizes because of the sloping top tubes at the time, Giant was more efficient in production. Even then, they did get flak from certain people due to their sizing gaps.

I don't think ebikes allows them to find much room to play in the value space. There's too much competition on the lower end with start-ups and generics so you might as well try to see how your distribution network and quality comes into play. In fact, I think Giant's problem is the opposite of their initial value proposition of a smaller set of models to produce, in the ebike space they have too many models and too many variants for the various markets compared to Specialized and perhaps Trek. Think about the Giant explore, there are 2 base models in the US (the +2) and then the comparative Liv Amiti model but there seems to be at least 2 more Liv variants in Canada and Australia and who knows how many other Explores. In addition, I don't think their pricey ebikes are marketed domestically, just the Momentums (but I may be wrong there).

That's a good point about having too many models, it's like Samsung circa 2015. I see their value coming from them being the frame/assembly OEM. Selling direct to consumers gives them more market leverage and autonomy because they're no longer entirely reliant on their partner brands, and they might have been willing to take a lower profit margin on retail. But their economies of scale are probably non existent to negative on the retail distribution side of things vs big brand rivals.

Re marketing, there has been zero coverage of their rigid fork commuter flagship, and they are sparsely distributed in store, though probably available on request.

 

[kmccune]

thanks! I hear the 'value engineering' phrase in the building products industry all the time. Usually, it's from sales and marketing staff. We (chemists) keeps telling them that 'value engineering' is a synonym for 'failure in the field' and 'lawsuit.' This is all interesting when thinking in terms of the bike industry.

Case in point OSB ,Advantech is what OSB should be and the price should be the same as OSB, building products have skyrocketed in the past year or so- a $9 sheet of OSB is now over $25, with framing going through the roof as well, even the bagasse board( black board-actually a waste product) has jumped in price, the product is very cheap and low quality, I do not think you can get even get the grade that actually had a structural quality of sorts anymore.
As with bicycles, the BB bikes fly out the door quickly now with the "stimulus " money burning a hole in peoples pockets while EBikes are virtually unknown in these parts and you can bet a lot of those cheap bicycles will gather dust in a garage or sit by the curb in a few years, the companies will charge what the market will bear.

 

[Alvin1957]

Case in point OSB ,Advantech is what OSB should be and the price should be the same as OSB, building products have skyrocketed in the past year or so- a $9 sheet of OSB is now over $25, with framing going through the roof as well, even the bagasse board( black board-actually a waste product) has jumped in price, the product is very cheap and low quality, I do not think you can get even get the grade that actually had a structural quality of sorts anymore.
As with bicycles, the BB bikes fly out the door quickly now with the "stimulus " money burning a hole in peoples pockets while EBikes are virtually unknown in these parts and you can bet a lot of those cheap bicycles will gather dust in a garage or sit by the curb in a few years, the companies will charge what the market will bear.

Hello, I must show my ignorance or poor memory. Could you please explain BB bikes? Sorry to hear that EBikes are a rarity there. We're just south of Dallas and they are not common here either. We see one every hundred riders or so. The local shop guys tell me they are selling as fast as they can get them in. I just wonder where they're hiding. Just sold my Giant Revolt. I had to accept that it was, as you said, gathering dust in the garage.

 

[kmccune]

Hello, I must show my ignorance or poor memory. Could you please explain BB bikes? Sorry to hear that EBikes are a rarity there. We're just south of Dallas and they are not common here either. We see one every hundred riders or so. The local shop guys tell me they are selling as fast as they can get them in. I just wonder where they're hiding. Just sold my Giant Revolt. I had to accept that it was, as you said, gathering dust in the garage.

" Sorry about the acronyms=BB="Big Box" I actually gave away one build and sold another, EBike seems to be an elusive concept in these parts. The sad part in all this is"adfligere contribules", so to speak, our local Convenience store owner, will jack up the price of the gasoline in the storage tanks to help pay for the next load,I really do not understand this about fuel as the stuff in the tanks was already paid for( guess the concept of a "loss leader" sort of eludes Her) anyway you can be sure this stuff will go up in price as long as people buy it, with no increase in quality.
My tastes change and now if I was in the right location I would build a"Meridan" or similar trike with a 36 volt motor( thats right 36 volt- it automatically regulates the top speed at least on a hub motor{ trikes do not need to be real fast for safety reasons}
As "Harlan Ellison" said" again dangerous visions- a dual battery( saddle mount in basket, a TDZ middrive with an "I Mortor" front hub for redundancy and high climbing" wouldn't cost a fortune and would have plenty of reliability and utility.
Whats killing me right now is the cost of a "carbon drive system", why not a standard "Gates notched v belt? If I was young I would get the parts and make one, everybody has to make a profit, however, do not recover the developement costs on the first few units, sheesh! Thanks for the reply.

 

[cbcler]

" Sorry about the acronyms=BB="Big Box" I actually gave away one build and sold another, EBike seems to be an elusive concept in these parts. The sad part in all this is"adfligere contribules", so to speak, our local Convenience store owner, will jack up the price of the gasoline in the storage tanks to help pay for the next load,I really do not understand this about fuel as the stuff in the tanks was already paid for( guess the concept of a "loss leader" sort of eludes Her) anyway you can be sure this stuff will go up in price as long as people buy it, with no increase in quality.
My tastes change and now if I was in the right location I would build a"Meridan" or similar trike with a 36 volt motor( thats right 36 volt- it automatically regulates the top speed at least on a hub motor{ trikes do not need to be real fast for safety reasons}
As "Harlan Ellison" said" again dangerous visions- a dual battery( saddle mount in basket, a TDZ middrive with an "I Mortor" front hub for redundancy and high climbing" wouldn't cost a fortune and would have plenty of reliability and utility.
Whats killing me right now is the cost of a "carbon drive system", why not a standard "Gates notched v belt? If I was young I would get the parts and make one, everybody has to make a profit, however, do not recover the developement costs on the first few units, sheesh! Thanks for the reply.

i didn’t read through all the replies, but if nobody mentioned it, bicycle import tariffs recently increased and this is likely the issue.

 

[Asher]

i didn’t read through all the replies, but if nobody mentioned it, bicycle import tariffs recently increased and this is likely the issue.

the price increases are effectively 2 years older than the tariff hikes.

 

[RandallS]

This is really Capitalism 101, subsection Supply & Demand... whatever the market will bear.

 

[Asher]

This is really Capitalism 101, subsection Supply & Demand... whatever the market will bear.

I wonder why there's such thing as business news when it's all just capitalism redux always. When you see someone reading the Wall Street Journal, do you tell them "hey that's just econ 101, no need to read it?"

 

[StevenC56]

Isn't the tariff only on bikes that are manufactured in China?

 

[RandallS]

I wonder why there's such thing as business news when it's all just capitalism redux always. When you see someone reading the Wall Street Journal, do you tell them "hey that's just econ 101, no need to read it?"

Not always - and of course you understand that or you likely wouldn't be on a forum about ebikes (not the cheapest device in the world).
I'm sure you may have noticed that there's been some extra wacky things going on lately - like Gamespot share value for instance, but in my non-professional view, the bike industry pricing situation can in fact be summarized "in general" by that simple concept.

Topping up...it's called an opinion, from an outsider.
I'll certainly defer to anyone's (including yours) better explanation should they share it.

But I don't really care why - and 6 months in, on my new'ish bike, I personally don't care about the increased pricing, at least for now anyways.
That is of course, until N+1 kicks in...

My normal signature on posts like the above has a bit of a financial tone as well:
My $0.02 and I reserve the right to be wrong...

It's nice outside - time to go for a ride.

 

[Art Deco]

It is very difficult to sell crappy stuff that is cheep when you as a salesperson know better. Big box stores have some bikes with waxy formaldehyde smelly tires you can slice with your thumb nail. So many people go for the low initial cost not thinking about overall value. What if value engineering looked at long-term value?

Then it would be called Premium not Value .

 

[PedalUma]

Economics is a Social Science. People can get in trouble when they forget that. I tend to take Premium Value regular bikes and put 'starters' on them. It does get them started. The import duty on the motors 'starters' is $15.

 

[theemartymac]

This is really Capitalism 101, subsection Supply & Demand... whatever the market will bear.

I think most manufacturers know that short term gauging is a brand killer in the long run.

I would suggest it is more about the reduced manufacturing capacity that is causing companies to shift from volume profitability, to yield retention in order to meet their operating costs and revenue targets. Everyone is reporting supply delays and shortages, and we are seeing it in presale rates and local stock shortages. Combine that with all the additional costs to businesses, some tariff and tax implications, and suddenly it is very easy for a company to go from the black to the red. If you can't increase your supply, you must either increase your yield, or cut your costs. Cost cutting is always primarily jobs, and that's not only bad press and makes the company look like its struggling, but short sighted to let your staff drift away in a time of industry growth. You will pay much more to replace them in a year than you will spend to keep them now.

 

[Asher]

Not always - and of course you understand that or you likely wouldn't be on a forum about ebikes (not the cheapest device in the world).
I'm sure you may have noticed that there's been some extra wacky things going on lately - like Gamespot share value for instance, but in my non-professional view, the bike industry pricing situation can in fact be summarized "in general" by that simple concept.

Topping up...it's called an opinion, from an outsider.
I'll certainly defer to anyone's (including yours) better explanation should they share it.

But I don't really care why - and 6 months in, on my new'ish bike, I personally don't care about the increased pricing, at least for now anyways.
That is of course, until N+1 kicks in...

My normal signature on posts like the above has a bit of a financial tone as well:
My $0.02 and I reserve the right to be wrong...

It's nice outside - time to go for a ride.

Lol why enter a thread to say you don't care about the thread's subject?

 

[Catalyzt]

Economics is a Social Science. People can get in trouble when they forget that. I tend to take Premium Value regular bikes and put 'starters' on them. It does get them started. The import duty on the motors 'starters' is $15.

My own view is similar, only more extreme: Economics is a religion. Or, when I'm being slightly less obnoxious, I sometimes say that economics is like psychology in that both are a hybrid of science and humanity-- but psychology, at least, KNOWS it's part or mostly humanity, and economics thinks it's really a science.

<< I would suggest it is more about the reduced manufacturing capacity that is causing companies to shift from volume profitability, to yield retention in order to meet their operating costs and revenue targets. Everyone is reporting supply delays and shortages..."

Yes, Theemarty... I'm super new to all this, but I've priced and specced at least 50 bikes in the last month or so, and come across many posts from a few years ago, and the price-climbing seems to be happening across multiple brands. I wonder if this is a big part of the picture-- not specific to Giant, but something we're seeing almost everywhere. Reduced capacity, but also terrible shipping problems... people were hating on Nireeka for shipping issues last summer and this fall, and I'm sure they're more than a little disorganized, but here in L.A., we have container ships parked offshore for weeks that can't unload. That has to add cost somewhere, and that cost must get passed along.

And the shortages in parts are spreading through multiple industries. My buddies find that vintage AND new guitars-- and stomp-box effects-- are climbing in price, my clients are telling me they can't upgrade their gaming PCs because electronics are unavailable. The turtle tank filter died last night, looked online, saw a few options, then felt guilty and drove down to my local aquarium store, happy to pay more b/c he's saved me so much money by teaching me how to service the pumps myself. Same story: Manufacturing delays, product isn't available, I got the last Tetra Whisper 60 on the shelf.

Sorry... honestly, I tried to keep that vaguely on topic, but it kind of got away from me...

 

[kmccune]

Price increases are the fact for all major brands. Two examples from Specialized:

• U.S. 2020 Turbo Levo Comp: US$5975
• U.S. 2021 Turbo Levo Comp: US$7500

25.5% price increase.

• EU 2019 Turbo Como 5.0: EUR3550
• EU 2020 Turbo Como 5.0: EUR4400
• EU 2021 model: not announced

It is not an S-Pedelec. Price increase 23.9%.

Why only Giant? Should I look at Trek, too?

I thought the "Specialized" line cost enough to start with( The bike shops wouldn't budge on their stock)

 

[StevenC56]

I thought the "Specialized" line cost enough to start with( The bike shops wouldn't budge on their stock)

That's why I never considered a Specialized e-bike or acoustic bike for that matter. They are already priced quite high compared to equally equipped models from other brands , and the dealers seem to have a "that's the price, take it or leave it" attitude.