As he walks along the bicycle-filled plateaus, Olaf Heller, co-owner of bicycle store chain Mantel, sums up the wide range in one go. “Here it says Trek, that’s American. Batavus is from Accell, which is Dutch. Sparta: also Accell, just like Koga. Gazelle is from Pon, also Dutch.”
Heller stops at a row of electric bicycles. “Cannondale, American, but since this week also Dutch.”
Most customers who walk through the shop of bicycle giant Mantel in Arnhem South will probably mainly see the wide choice of brands, colors and models. But if you look beyond all those logos, many of the bicycles in the building can quickly be traced back to a handful of companies, located in an even smaller number of countries. Because there are hardly any really large companies in the bicycle sector, says Heller. With the exception of a few giants, the industry is quite “fragmented”.
The United States houses a number of large suppliers, such as Trek and the slightly smaller Specialized, which Mantel does not currently sell. Japan is also a major player, but mainly as a supplier of parts. The Osaka-based Shimano is the worldwide market leader in, among other things, shifting systems and brakes. Furthermore, Germany has many large suppliers, such as Cube and purchasing organization ZEG (including Pegasus, Bulls).
And then there’s Taiwan, which has long been regarded as probably the largest block in the bicycle market. The island in the South China Sea is home to globally sold brands such as Giant and Merida, who produce many for other companies in addition to their own bicycles in their factories. Together they account for a turnover of around 3 billion euros, according to the latest available figures.
Read more about the shortages in the sector: Need a new bicycle chain? Just wait 55 weeks
Heller looks around his shop. “Normally we also sell Giant, but now there is nothing here.” Like many other sellers, Mantel also suffers from the major delivery problems in the bicycle sector. Of the three floors in Arnhem, one is completely empty.
Alternative to car
As of this week, however, there is another country that seriously qualifies for the title of largest bicycle dealer: the Netherlands. Besides a whole series of smaller bicycle brands, it is also home to bicycle giants Accell Group and Pon. Until recently, both groups together already accounted for about 2.8 billion euros in turnover, and the acquisition of the American Dorel Sports announced on Monday will give Pon roughly a billion euros in turnover. In its own words, the Almere-based company, which paid more than 700 million euros for the purchase, will become the world’s largest bicycle seller.
Pon built this empire in just ten years. The company was previously mainly known as an importer of the car brands under the Volkswagen group, but no longer wanted to be dependent on cars alone. Therefore, it decided to expand to other modes of transport. In the eyes of Pon, the bicycle offered an ideal growth market, because according to the company – especially in cities – it can become a formidable competitor for the car.
Other car dealers are now following this example: Louwman (importer of Toyota and Mazda) recently bought in, for example, from Fietsvoordeelshop, car dealer chain Van Mossel entered into a partnership with e-bike seller Stella two years ago. “But Pon saw this first,” said Heller.
The electric bicycle plays a prominent role in their vision of the future, according to analyst Karel Zoete of Kepler Cheuvreux. The Netherlands is a forerunner in this. It discovered the motor-assisted bicycle relatively early and quickly; other countries are now following in rapid succession.
Maarten Den Drijver, analyst at ABN Amro-ODDO BHV: “The Benelux, the United Kingdom, Austria, Germany, Denmark – these are the important sales markets. These are countries in which consumers increasingly opt to take a bicycle for relatively short journeys, of three to twenty kilometers.”
According to Zoete, the corona pandemic has only accelerated this development. “Whoever lived in Paris went to work by metro. That was of course not possible during the pandemic, so you saw more and more people opting for the bicycle.”
Pon on takeover path
Pons advance in the sector started in 2011 with the acquisition of the factory in Dieren in Gelderland from the then financially shaky Gazelle. Then, in 2013, Derby Cycles was purchased, manufacturer of, among others, the German brands Focus and Kalkhoff. Acquisitions followed of the American mountain bike maker Santa Cruz, and of the Dutch Urban Arrow, specialized in electric cargo bikes. Growth through acquisitions – with this strategy, the listed Heerenveen-based Accell also grew into one of the largest bicycle dealers in the world.
Incidentally, it would have been close if Pon had become the market leader much earlier. In 2017 it made a serious attempt to acquire that other Dutch giant: Accell, known for brands such as Batavus, Koga and Haibike.
“At that time, Accell did not perform very well and the price lagged somewhat,” says analyst Martijn den Drijver. “At Pon they will have thought: we can do that better.” In the end, the takeover did not materialize: after months of negotiations, Accell broke off the talks because it thought Pon’s offer, 845 million euros, was too low.
With Dorel, family business Pon is now expanding into markets where it was not yet strongly represented. The trading house (turnover: 7.3 billion euros) already had some racing and mountain bikes in its range, but the emphasis was on bicycles for daily use, especially electric ones. With Cannondale, it becomes the owner of a renowned manufacturer of sports bikes sold all over the world. Schwinn, Mongoose and GT also make Pon stronger in the US.
Sports bikes are the same all over the world, but that is less the case with the city bike or the transport bike
The fact that Pon will soon be the largest in the world in bicycles does not mean that its bicycles will be for sale all over the world. It is important to distinguish between sports bikes and the models for everyday use, explains Olaf Heller of bicycle shop Mantel. Sports bikes are the same everywhere in the world, but with the city or transport bike it is much less. “There you have really different products per country, with different parts.” The granny bike, for example, is a typical Dutch phenomenon.
Heller puts two city bikes side by side: a Dutch Gazelle and a German Pegasus. The Dutch bike is perfectly finished, he explains. “Many parts are specially made, it really is a total package. German consumers are actually more interested in specifications.” In other words: the best parts, even if they do not immediately match each other in terms of appearance.” Because the differences between countries are sometimes large, it is much more difficult in this segment to dominate worldwide with only a few brands, according to the Mantel Director.
Pon’s range of city or transport bicycles is mainly aimed at the Western European consumer, and with the takeover now also more at the American consumer. But Heller has no doubts that new acquisitions will follow to serve consumers outside of these regions. Because the market is still so fragmented, he believes there is plenty of room for this. In many markets you are already the largest supplier with a share of a handful of percentages.
Yet he doesn’t see Pon just starting everywhere. China, for example, is a separate market, says Heller. “Most bicycles you see riding there cost 180 dollars, at most 200. These kinds of brands are much higher quality, they have no business there. They would rather choose the United States, or perhaps Latin America.”
Power possible danger
Isn’t such an increasingly powerful player like Pon also a danger? That risk is lurking, says analyst Den Drijver. For smaller manufacturers, for example. As an illustration, Den Drijver mentions Germany, where there are dozens of smaller manufacturers in addition to a few larger brands. “I think it will be more difficult for them. In the future, it will be hard for them to continue to bear the costs of research and product development, especially as the e-bike becomes more and more advanced.”
These concerns also exist among retailers. At 12GO Biking, just like Mantel one of the largest bicycle sellers in the country, they are slowly starting to notice the growing influence of Pon, says co-owner Pieter van den Berg. “In practice, however, we do business with the brands, not with Pon Holding directly. You do notice that they have become more professional – more extensive terms and conditions and contracts. As a result, more and more is being framed, but it also means that we know better where we stand. Our cooperation is good. Of course the question remains: is it good that one party is so large? The future will show that. Pon is not so dominant that you can’t get around them.”
That’s what Olaf Heller says too. He does not see it happening so soon that Pon will soon use his influence in negotiations, for example to force stores to purchase other brands of the group. So far, Pon’s brands have been operating as independent companies. And from what the Mantel Director has heard from the group so far, Pon also believes it is important that these companies continue to chart their own course.
Moreover, a good relationship with the dealers is also in Pon’s interest, says Heller. As a bicycle manufacturer, you desperately need those shops. “A bicycle is not a device that you order online and send as soon as it is broken. For maintenance or repair, the customer wants to be able to go somewhere to be helped, preferably the same day. The stores’ greatest strength lies in that service.”
As he walks along the bicycle-filled plateaus, Olaf Heller, co-owner of bicycle store chain Mantel, sums up the wide range in one go. “Here it says Trek, that’s American. Batavus is from Accell, which is Dutch. Sparta: also Accell, just like Koga. Gazelle is from Pon, also Dutch.”
Heller stops at a row of electric bicycles. “Cannondale, American, but since this week also Dutch.”
Most customers who walk through the shop of bicycle giant Mantel in Arnhem South will probably mainly see the wide choice of brands, colors and models. But if you look beyond all those logos, many of the bicycles in the building can quickly be traced back to a handful of companies, located in an even smaller number of countries. Because there are hardly any really large companies in the bicycle sector, says Heller. With the exception of a few giants, the industry is quite “fragmented”.
The United States houses a number of large suppliers, such as Trek and the slightly smaller Specialized, which Mantel does not currently sell. Japan is also a major player, but mainly as a supplier of parts. The Osaka-based Shimano is the worldwide market leader in, among other things, shifting systems and brakes. Furthermore, Germany has many large suppliers, such as Cube and purchasing organization ZEG (including Pegasus, Bulls).
And then there’s Taiwan, which has long been regarded as probably the largest block in the bicycle market. The island in the South China Sea is home to globally sold brands such as Giant and Merida, who produce many for other companies in addition to their own bicycles in their factories. Together they account for a turnover of around 3 billion euros, according to the latest available figures.
Read more about the shortages in the sector: Need a new bicycle chain? Just wait 55 weeks
Heller looks around his shop. “Normally we also sell Giant, but now there is nothing here.” Like many other sellers, Mantel also suffers from the major delivery problems in the bicycle sector. Of the three floors in Arnhem, one is completely empty.
Alternative to car
As of this week, however, there is another country that seriously qualifies for the title of largest bicycle dealer: the Netherlands. Besides a whole series of smaller bicycle brands, it is also home to bicycle giants Accell Group and Pon. Until recently, both groups together already accounted for about 2.8 billion euros in turnover, and the acquisition of the American Dorel Sports announced on Monday will give Pon roughly a billion euros in turnover. In its own words, the Almere-based company, which paid more than 700 million euros for the purchase, will become the world’s largest bicycle seller.
Pon built this empire in just ten years. The company was previously mainly known as an importer of the car brands under the Volkswagen group, but no longer wanted to be dependent on cars alone. Therefore, it decided to expand to other modes of transport. In the eyes of Pon, the bicycle offered an ideal growth market, because according to the company – especially in cities – it can become a formidable competitor for the car.
Other car dealers are now following this example: Louwman (importer of Toyota and Mazda) recently bought in, for example, from Fietsvoordeelshop, car dealer chain Van Mossel entered into a partnership with e-bike seller Stella two years ago. “But Pon saw this first,” said Heller.
The electric bicycle plays a prominent role in their vision of the future, according to analyst Karel Zoete of Kepler Cheuvreux. The Netherlands is a forerunner in this. It discovered the motor-assisted bicycle relatively early and quickly; other countries are now following in rapid succession.
Maarten Den Drijver, analyst at ABN Amro-ODDO BHV: “The Benelux, the United Kingdom, Austria, Germany, Denmark – these are the important sales markets. These are countries in which consumers increasingly opt to take a bicycle for relatively short journeys, of three to twenty kilometers.”
According to Zoete, the corona pandemic has only accelerated this development. “Whoever lived in Paris went to work by metro. That was of course not possible during the pandemic, so you saw more and more people opting for the bicycle.”
Pon on takeover path
Pons advance in the sector started in 2011 with the acquisition of the factory in Dieren in Gelderland from the then financially shaky Gazelle. Then, in 2013, Derby Cycles was purchased, manufacturer of, among others, the German brands Focus and Kalkhoff. Acquisitions followed of the American mountain bike maker Santa Cruz, and of the Dutch Urban Arrow, specialized in electric cargo bikes. Growth through acquisitions – with this strategy, the listed Heerenveen-based Accell also grew into one of the largest bicycle dealers in the world.
Incidentally, it would have been close if Pon had become the market leader much earlier. In 2017 it made a serious attempt to acquire that other Dutch giant: Accell, known for brands such as Batavus, Koga and Haibike.
“At that time, Accell did not perform very well and the price lagged somewhat,” says analyst Martijn den Drijver. “At Pon they will have thought: we can do that better.” In the end, the takeover did not materialize: after months of negotiations, Accell broke off the talks because it thought Pon’s offer, 845 million euros, was too low.
With Dorel, family business Pon is now expanding into markets where it was not yet strongly represented. The trading house (turnover: 7.3 billion euros) already had some racing and mountain bikes in its range, but the emphasis was on bicycles for daily use, especially electric ones. With Cannondale, it becomes the owner of a renowned manufacturer of sports bikes sold all over the world. Schwinn, Mongoose and GT also make Pon stronger in the US.
Sports bikes are the same all over the world, but that is less the case with the city bike or the transport bike
The fact that Pon will soon be the largest in the world in bicycles does not mean that its bicycles will be for sale all over the world. It is important to distinguish between sports bikes and the models for everyday use, explains Olaf Heller of bicycle shop Mantel. Sports bikes are the same everywhere in the world, but with the city or transport bike it is much less. “There you have really different products per country, with different parts.” The granny bike, for example, is a typical Dutch phenomenon.
Heller puts two city bikes side by side: a Dutch Gazelle and a German Pegasus. The Dutch bike is perfectly finished, he explains. “Many parts are specially made, it really is a total package. German consumers are actually more interested in specifications.” In other words: the best parts, even if they do not immediately match each other in terms of appearance.” Because the differences between countries are sometimes large, it is much more difficult in this segment to dominate worldwide with only a few brands, according to the Mantel Director.
Pon’s range of city or transport bicycles is mainly aimed at the Western European consumer, and with the takeover now also more at the American consumer. But Heller has no doubts that new acquisitions will follow to serve consumers outside of these regions. Because the market is still so fragmented, he believes there is plenty of room for this. In many markets you are already the largest supplier with a share of a handful of percentages.
Yet he doesn’t see Pon just starting everywhere. China, for example, is a separate market, says Heller. “Most bicycles you see riding there cost 180 dollars, at most 200. These kinds of brands are much higher quality, they have no business there. They would rather choose the United States, or perhaps Latin America.”
Power possible danger
Isn’t such an increasingly powerful player like Pon also a danger? That risk is lurking, says analyst Den Drijver. For smaller manufacturers, for example. As an illustration, Den Drijver mentions Germany, where there are dozens of smaller manufacturers in addition to a few larger brands. “I think it will be more difficult for them. In the future, it will be hard for them to continue to bear the costs of research and product development, especially as the e-bike becomes more and more advanced.”
These concerns also exist among retailers. At 12GO Biking, just like Mantel one of the largest bicycle sellers in the country, they are slowly starting to notice the growing influence of Pon, says co-owner Pieter van den Berg. “In practice, however, we do business with the brands, not with Pon Holding directly. You do notice that they have become more professional – more extensive terms and conditions and contracts. As a result, more and more is being framed, but it also means that we know better where we stand. Our cooperation is good. Of course the question remains: is it good that one party is so large? The future will show that. Pon is not so dominant that you can’t get around them.”
That’s what Olaf Heller says too. He does not see it happening so soon that Pon will soon use his influence in negotiations, for example to force stores to purchase other brands of the group. So far, Pon’s brands have been operating as independent companies. And from what the Mantel Director has heard from the group so far, Pon also believes it is important that these companies continue to chart their own course.
Moreover, a good relationship with the dealers is also in Pon’s interest, says Heller. As a bicycle manufacturer, you desperately need those shops. “A bicycle is not a device that you order online and send as soon as it is broken. For maintenance or repair, the customer wants to be able to go somewhere to be helped, preferably the same day. The stores’ greatest strength lies in that service.”
As he walks along the bicycle-filled plateaus, Olaf Heller, co-owner of bicycle store chain Mantel, sums up the wide range in one go. “Here it says Trek, that’s American. Batavus is from Accell, which is Dutch. Sparta: also Accell, just like Koga. Gazelle is from Pon, also Dutch.”
Heller stops at a row of electric bicycles. “Cannondale, American, but since this week also Dutch.”
Most customers who walk through the shop of bicycle giant Mantel in Arnhem South will probably mainly see the wide choice of brands, colors and models. But if you look beyond all those logos, many of the bicycles in the building can quickly be traced back to a handful of companies, located in an even smaller number of countries. Because there are hardly any really large companies in the bicycle sector, says Heller. With the exception of a few giants, the industry is quite “fragmented”.
The United States houses a number of large suppliers, such as Trek and the slightly smaller Specialized, which Mantel does not currently sell. Japan is also a major player, but mainly as a supplier of parts. The Osaka-based Shimano is the worldwide market leader in, among other things, shifting systems and brakes. Furthermore, Germany has many large suppliers, such as Cube and purchasing organization ZEG (including Pegasus, Bulls).
And then there’s Taiwan, which has long been regarded as probably the largest block in the bicycle market. The island in the South China Sea is home to globally sold brands such as Giant and Merida, who produce many for other companies in addition to their own bicycles in their factories. Together they account for a turnover of around 3 billion euros, according to the latest available figures.
Read more about the shortages in the sector: Need a new bicycle chain? Just wait 55 weeks
Heller looks around his shop. “Normally we also sell Giant, but now there is nothing here.” Like many other sellers, Mantel also suffers from the major delivery problems in the bicycle sector. Of the three floors in Arnhem, one is completely empty.
Alternative to car
As of this week, however, there is another country that seriously qualifies for the title of largest bicycle dealer: the Netherlands. Besides a whole series of smaller bicycle brands, it is also home to bicycle giants Accell Group and Pon. Until recently, both groups together already accounted for about 2.8 billion euros in turnover, and the acquisition of the American Dorel Sports announced on Monday will give Pon roughly a billion euros in turnover. In its own words, the Almere-based company, which paid more than 700 million euros for the purchase, will become the world’s largest bicycle seller.
Pon built this empire in just ten years. The company was previously mainly known as an importer of the car brands under the Volkswagen group, but no longer wanted to be dependent on cars alone. Therefore, it decided to expand to other modes of transport. In the eyes of Pon, the bicycle offered an ideal growth market, because according to the company – especially in cities – it can become a formidable competitor for the car.
Other car dealers are now following this example: Louwman (importer of Toyota and Mazda) recently bought in, for example, from Fietsvoordeelshop, car dealer chain Van Mossel entered into a partnership with e-bike seller Stella two years ago. “But Pon saw this first,” said Heller.
The electric bicycle plays a prominent role in their vision of the future, according to analyst Karel Zoete of Kepler Cheuvreux. The Netherlands is a forerunner in this. It discovered the motor-assisted bicycle relatively early and quickly; other countries are now following in rapid succession.
Maarten Den Drijver, analyst at ABN Amro-ODDO BHV: “The Benelux, the United Kingdom, Austria, Germany, Denmark – these are the important sales markets. These are countries in which consumers increasingly opt to take a bicycle for relatively short journeys, of three to twenty kilometers.”
According to Zoete, the corona pandemic has only accelerated this development. “Whoever lived in Paris went to work by metro. That was of course not possible during the pandemic, so you saw more and more people opting for the bicycle.”
Pon on takeover path
Pons advance in the sector started in 2011 with the acquisition of the factory in Dieren in Gelderland from the then financially shaky Gazelle. Then, in 2013, Derby Cycles was purchased, manufacturer of, among others, the German brands Focus and Kalkhoff. Acquisitions followed of the American mountain bike maker Santa Cruz, and of the Dutch Urban Arrow, specialized in electric cargo bikes. Growth through acquisitions – with this strategy, the listed Heerenveen-based Accell also grew into one of the largest bicycle dealers in the world.
Incidentally, it would have been close if Pon had become the market leader much earlier. In 2017 it made a serious attempt to acquire that other Dutch giant: Accell, known for brands such as Batavus, Koga and Haibike.
“At that time, Accell did not perform very well and the price lagged somewhat,” says analyst Martijn den Drijver. “At Pon they will have thought: we can do that better.” In the end, the takeover did not materialize: after months of negotiations, Accell broke off the talks because it thought Pon’s offer, 845 million euros, was too low.
With Dorel, family business Pon is now expanding into markets where it was not yet strongly represented. The trading house (turnover: 7.3 billion euros) already had some racing and mountain bikes in its range, but the emphasis was on bicycles for daily use, especially electric ones. With Cannondale, it becomes the owner of a renowned manufacturer of sports bikes sold all over the world. Schwinn, Mongoose and GT also make Pon stronger in the US.
Sports bikes are the same all over the world, but that is less the case with the city bike or the transport bike
The fact that Pon will soon be the largest in the world in bicycles does not mean that its bicycles will be for sale all over the world. It is important to distinguish between sports bikes and the models for everyday use, explains Olaf Heller of bicycle shop Mantel. Sports bikes are the same everywhere in the world, but with the city or transport bike it is much less. “There you have really different products per country, with different parts.” The granny bike, for example, is a typical Dutch phenomenon.
Heller puts two city bikes side by side: a Dutch Gazelle and a German Pegasus. The Dutch bike is perfectly finished, he explains. “Many parts are specially made, it really is a total package. German consumers are actually more interested in specifications.” In other words: the best parts, even if they do not immediately match each other in terms of appearance.” Because the differences between countries are sometimes large, it is much more difficult in this segment to dominate worldwide with only a few brands, according to the Mantel Director.
Pon’s range of city or transport bicycles is mainly aimed at the Western European consumer, and with the takeover now also more at the American consumer. But Heller has no doubts that new acquisitions will follow to serve consumers outside of these regions. Because the market is still so fragmented, he believes there is plenty of room for this. In many markets you are already the largest supplier with a share of a handful of percentages.
Yet he doesn’t see Pon just starting everywhere. China, for example, is a separate market, says Heller. “Most bicycles you see riding there cost 180 dollars, at most 200. These kinds of brands are much higher quality, they have no business there. They would rather choose the United States, or perhaps Latin America.”
Power possible danger
Isn’t such an increasingly powerful player like Pon also a danger? That risk is lurking, says analyst Den Drijver. For smaller manufacturers, for example. As an illustration, Den Drijver mentions Germany, where there are dozens of smaller manufacturers in addition to a few larger brands. “I think it will be more difficult for them. In the future, it will be hard for them to continue to bear the costs of research and product development, especially as the e-bike becomes more and more advanced.”
These concerns also exist among retailers. At 12GO Biking, just like Mantel one of the largest bicycle sellers in the country, they are slowly starting to notice the growing influence of Pon, says co-owner Pieter van den Berg. “In practice, however, we do business with the brands, not with Pon Holding directly. You do notice that they have become more professional – more extensive terms and conditions and contracts. As a result, more and more is being framed, but it also means that we know better where we stand. Our cooperation is good. Of course the question remains: is it good that one party is so large? The future will show that. Pon is not so dominant that you can’t get around them.”
That’s what Olaf Heller says too. He does not see it happening so soon that Pon will soon use his influence in negotiations, for example to force stores to purchase other brands of the group. So far, Pon’s brands have been operating as independent companies. And from what the Mantel Director has heard from the group so far, Pon also believes it is important that these companies continue to chart their own course.
Moreover, a good relationship with the dealers is also in Pon’s interest, says Heller. As a bicycle manufacturer, you desperately need those shops. “A bicycle is not a device that you order online and send as soon as it is broken. For maintenance or repair, the customer wants to be able to go somewhere to be helped, preferably the same day. The stores’ greatest strength lies in that service.”
As he walks along the bicycle-filled plateaus, Olaf Heller, co-owner of bicycle store chain Mantel, sums up the wide range in one go. “Here it says Trek, that’s American. Batavus is from Accell, which is Dutch. Sparta: also Accell, just like Koga. Gazelle is from Pon, also Dutch.”
Heller stops at a row of electric bicycles. “Cannondale, American, but since this week also Dutch.”
Most customers who walk through the shop of bicycle giant Mantel in Arnhem South will probably mainly see the wide choice of brands, colors and models. But if you look beyond all those logos, many of the bicycles in the building can quickly be traced back to a handful of companies, located in an even smaller number of countries. Because there are hardly any really large companies in the bicycle sector, says Heller. With the exception of a few giants, the industry is quite “fragmented”.
The United States houses a number of large suppliers, such as Trek and the slightly smaller Specialized, which Mantel does not currently sell. Japan is also a major player, but mainly as a supplier of parts. The Osaka-based Shimano is the worldwide market leader in, among other things, shifting systems and brakes. Furthermore, Germany has many large suppliers, such as Cube and purchasing organization ZEG (including Pegasus, Bulls).
And then there’s Taiwan, which has long been regarded as probably the largest block in the bicycle market. The island in the South China Sea is home to globally sold brands such as Giant and Merida, who produce many for other companies in addition to their own bicycles in their factories. Together they account for a turnover of around 3 billion euros, according to the latest available figures.
Read more about the shortages in the sector: Need a new bicycle chain? Just wait 55 weeks
Heller looks around his shop. “Normally we also sell Giant, but now there is nothing here.” Like many other sellers, Mantel also suffers from the major delivery problems in the bicycle sector. Of the three floors in Arnhem, one is completely empty.
Alternative to car
As of this week, however, there is another country that seriously qualifies for the title of largest bicycle dealer: the Netherlands. Besides a whole series of smaller bicycle brands, it is also home to bicycle giants Accell Group and Pon. Until recently, both groups together already accounted for about 2.8 billion euros in turnover, and the acquisition of the American Dorel Sports announced on Monday will give Pon roughly a billion euros in turnover. In its own words, the Almere-based company, which paid more than 700 million euros for the purchase, will become the world’s largest bicycle seller.
Pon built this empire in just ten years. The company was previously mainly known as an importer of the car brands under the Volkswagen group, but no longer wanted to be dependent on cars alone. Therefore, it decided to expand to other modes of transport. In the eyes of Pon, the bicycle offered an ideal growth market, because according to the company – especially in cities – it can become a formidable competitor for the car.
Other car dealers are now following this example: Louwman (importer of Toyota and Mazda) recently bought in, for example, from Fietsvoordeelshop, car dealer chain Van Mossel entered into a partnership with e-bike seller Stella two years ago. “But Pon saw this first,” said Heller.
The electric bicycle plays a prominent role in their vision of the future, according to analyst Karel Zoete of Kepler Cheuvreux. The Netherlands is a forerunner in this. It discovered the motor-assisted bicycle relatively early and quickly; other countries are now following in rapid succession.
Maarten Den Drijver, analyst at ABN Amro-ODDO BHV: “The Benelux, the United Kingdom, Austria, Germany, Denmark – these are the important sales markets. These are countries in which consumers increasingly opt to take a bicycle for relatively short journeys, of three to twenty kilometers.”
According to Zoete, the corona pandemic has only accelerated this development. “Whoever lived in Paris went to work by metro. That was of course not possible during the pandemic, so you saw more and more people opting for the bicycle.”
Pon on takeover path
Pons advance in the sector started in 2011 with the acquisition of the factory in Dieren in Gelderland from the then financially shaky Gazelle. Then, in 2013, Derby Cycles was purchased, manufacturer of, among others, the German brands Focus and Kalkhoff. Acquisitions followed of the American mountain bike maker Santa Cruz, and of the Dutch Urban Arrow, specialized in electric cargo bikes. Growth through acquisitions – with this strategy, the listed Heerenveen-based Accell also grew into one of the largest bicycle dealers in the world.
Incidentally, it would have been close if Pon had become the market leader much earlier. In 2017 it made a serious attempt to acquire that other Dutch giant: Accell, known for brands such as Batavus, Koga and Haibike.
“At that time, Accell did not perform very well and the price lagged somewhat,” says analyst Martijn den Drijver. “At Pon they will have thought: we can do that better.” In the end, the takeover did not materialize: after months of negotiations, Accell broke off the talks because it thought Pon’s offer, 845 million euros, was too low.
With Dorel, family business Pon is now expanding into markets where it was not yet strongly represented. The trading house (turnover: 7.3 billion euros) already had some racing and mountain bikes in its range, but the emphasis was on bicycles for daily use, especially electric ones. With Cannondale, it becomes the owner of a renowned manufacturer of sports bikes sold all over the world. Schwinn, Mongoose and GT also make Pon stronger in the US.
Sports bikes are the same all over the world, but that is less the case with the city bike or the transport bike
The fact that Pon will soon be the largest in the world in bicycles does not mean that its bicycles will be for sale all over the world. It is important to distinguish between sports bikes and the models for everyday use, explains Olaf Heller of bicycle shop Mantel. Sports bikes are the same everywhere in the world, but with the city or transport bike it is much less. “There you have really different products per country, with different parts.” The granny bike, for example, is a typical Dutch phenomenon.
Heller puts two city bikes side by side: a Dutch Gazelle and a German Pegasus. The Dutch bike is perfectly finished, he explains. “Many parts are specially made, it really is a total package. German consumers are actually more interested in specifications.” In other words: the best parts, even if they do not immediately match each other in terms of appearance.” Because the differences between countries are sometimes large, it is much more difficult in this segment to dominate worldwide with only a few brands, according to the Mantel Director.
Pon’s range of city or transport bicycles is mainly aimed at the Western European consumer, and with the takeover now also more at the American consumer. But Heller has no doubts that new acquisitions will follow to serve consumers outside of these regions. Because the market is still so fragmented, he believes there is plenty of room for this. In many markets you are already the largest supplier with a share of a handful of percentages.
Yet he doesn’t see Pon just starting everywhere. China, for example, is a separate market, says Heller. “Most bicycles you see riding there cost 180 dollars, at most 200. These kinds of brands are much higher quality, they have no business there. They would rather choose the United States, or perhaps Latin America.”
Power possible danger
Isn’t such an increasingly powerful player like Pon also a danger? That risk is lurking, says analyst Den Drijver. For smaller manufacturers, for example. As an illustration, Den Drijver mentions Germany, where there are dozens of smaller manufacturers in addition to a few larger brands. “I think it will be more difficult for them. In the future, it will be hard for them to continue to bear the costs of research and product development, especially as the e-bike becomes more and more advanced.”
These concerns also exist among retailers. At 12GO Biking, just like Mantel one of the largest bicycle sellers in the country, they are slowly starting to notice the growing influence of Pon, says co-owner Pieter van den Berg. “In practice, however, we do business with the brands, not with Pon Holding directly. You do notice that they have become more professional – more extensive terms and conditions and contracts. As a result, more and more is being framed, but it also means that we know better where we stand. Our cooperation is good. Of course the question remains: is it good that one party is so large? The future will show that. Pon is not so dominant that you can’t get around them.”
That’s what Olaf Heller says too. He does not see it happening so soon that Pon will soon use his influence in negotiations, for example to force stores to purchase other brands of the group. So far, Pon’s brands have been operating as independent companies. And from what the Mantel Director has heard from the group so far, Pon also believes it is important that these companies continue to chart their own course.
Moreover, a good relationship with the dealers is also in Pon’s interest, says Heller. As a bicycle manufacturer, you desperately need those shops. “A bicycle is not a device that you order online and send as soon as it is broken. For maintenance or repair, the customer wants to be able to go somewhere to be helped, preferably the same day. The stores’ greatest strength lies in that service.”