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You may not yet be aware of the Leon Cycle company name, but there’s a good chance that you’ve seen their first bike brand, NCM. The brand name is derived from ‘Nickel Cobalt Magnesium’, the make-up of the battery.
It’s only their ‘first’ brand because this year they’ll be launching two new brands. NCM will launch a new range of city bikes C5/C7 and a new brand ET.Cycle will cover fat series ebikes F720/F1000.
Leon Cycle was set up originally in Hanover, Germany in 2014, just to supply ebikes to that market. It became very popular and the company has been rapidly expanding ever since.
Leon Cycle now have manufacturing facilities in France, Romania, Germany, China, Vietnam and South Korea. They’ve expanded their distribution network throughout Europe and the UK, Canada and the USA.
Leon’s parent company is the Leisger Group of companies, based in China. The CEO and owner of the business was educated in Germany and lived there for years, so that’s where the somewhat German sounding company name originates.
In 2018 Leon Cycle hired Philip Rigoli to establish their Australian and New Zealand operations which started in late 2018 and 2020 respectively. We recently caught up with Philip to find out more about Leon Cycle’s rapid rise in Australia and started by asking about his personal experience.
“I have a particular interest in start-up companies. Especially building teams and building networks and systems to get things running,” Philip explained.
“My background is logistics, e-commerce, import/export and supply chain for various different companies. I come from chemical manufacturing background plus warehouse and distribution in consumer goods including e-commerce.
“Ebikes are a growing market. I see growing potential in the future, so it’s a great industry to be in.”
Clearly Philip was well qualified for the role, but he’s quick to attribute success here due to head office support from China.
“We’ve had a very good start in Australia because we have the capital backing,” he stated. “Supply of stock, straight from the factory, hasn’t been a problem.
“I started developing the market in Australia from scratch. I started selling online, then building our dealer network. Our value proposition is mid-range price, great value for money.”
Despite the Australian ebike market appearing to be both crowded and competitive, Leon Cycle has seen tremendous growth since they started.
“We’ve expanded our model range and our dealer network throughout Australia,” said Philip.
“We have extensive customer service and support, plus spare parts stored here in Australia, so we’re able to provide our dealers that extra support they need.
“At one stage last year during the covid crisis we ran out of stock because everything had sold out. So since then, we’ve developed new approaches to our supply chain and significantly increased our production capacity to ensure that we have all of our models in stock, in Australia right now.
“We now have enough stock in Australia to supply all of our dealers on a continuous basis. It’s not a problem. We set our dealers up, on an online ordering system on our website. They just log in, they can see our stock levels and go ahead and place the order.”
For such a new company here, Leon Cycle is already a substantially sized operation, as Philip detailed.
“We have customer service roles, area managers in different states who visit the dealers, a finance team, a warehouse operations team and we also have support from our head office who give support on factory production schedules, global marketing and branding, coordination of our social media and so on.
“In Australia we have about eight or nine people at the moment but because we’re in a rapid growth phase, we’re looking to hire another three or four people at least.”
In-House Product Development and Manufacture
According to Philip, keys to their success have been included doing product research and development in house, then manufacturing, distributing and retailing, so that they’re both vertically integrated and less reliant upon third parties.
“We’ve developed our own Das-Kit motor and display and controller systems,” he revealed. “We also have our own Dehawk battery system.
“They’re designed to work with our bikes in the most efficient way. We have our own research and development team in our head office. We’re constantly looking at improving all our components to achieve better quality and performance.
“We’ve increased our torque output, especially for the Australian and European markets which are limited to 250 watts. Our bikes comply with the European standard.”
NCM’s best-selling category is e-mountain bikes, followed by trekking bikes and folding bikes. Across their ranges they have two levels, the standard model and a ‘Plus’ version. The plus version generally has upgraded brakes, from mechanical to hydraulic, a larger battery capacity, upgraded display with more information and settings and more gears.
If you look at the Leon Cycle website you’ll see that their prices, even for the plus models, are extremely affordable. Most of their standard range bikes are just below $2,000 and their plus models not far above $2,000.
Philip credits being able to offer these extremely affordable prices to using the most streamlined and latest processes and technology so that all operations are as efficient as possible.
“Our total operating costs as a percentage of our gross sales are pretty low,” he reported. “We have the volume to get those unit costs lower.”
“We get a lot of support from our overseas office so that we don’t need to have a lot of labour costs in Australia.
“We’re vertically integrated. We do everything from manufacturing right through to retailing, so we’re able to get those costs down.”
New Opportunities for Australian Dealers
Leon Cycle is looking to expand rapidly over the next year, both through their established NCM brand and the new ET.Cycle brands and model ranges.
Philip sees carefully growing his Australian and New Zealand dealer bases as a key strategy towards achieving their growth targets and is looking for dealers who are ready to grow with them.
“We try to make the process for our dealers as easy as possible,” Philip explained.
“We provide their own login to our website, where they can see their own prices. Their order process is simple. Dealers can store their credit card details on the site so that their staff can also order bikes.
“Our shipping costs are pretty low. Around the $50-$60 mark depending upon the destination, with $40 for Melbourne.
“We’re restructuring our logistics, with a Sydney warehouse coming on board where we’ll hold a substantial amount of stock. This will further shorten the delivery times to the dealers.
“If we receive orders early, we can dispatch the same day for next day delivery.
“We offer promotions to new dealers where we promote their store through social media. We also control territories. We keep enough market share for each dealer.
“We provide warranty support through our website and we’re expanding our warranty support areas. Currently they’re all done in Melbourne but we’re also setting up in Sydney.
“We’ve had dealers start with us who have been very small bike shops and they’ve grown to be quite large operations and expanding into other shops in other areas.”
Like many importers and wholesalers in today’s business landscape, Leon Cycle will continue to sell online to consumers, but makes sure that its online pricing stays firm so that they’re not competing with their dealers.
“We have plans in the future to better integrate the dealers with online customer orders so that we can provide the dealer leads and direct the customer to their store to pick up locally,” Philip said.
In addition to the new ET.Cycle brand, NCM has new models coming in the next couple of months. These will feature torque sensors on their bottom brackets so that the motor will provide a finely tuned power output, depending upon pedal strength.
The Future Looks Bright
Philip is bullish about the future, not just for Leon Cycle and their dealers but for the ebike sector in general.
“We see the market as definitely growing for the next five years at least,” he predicted. “The technology is getting better… battery density is getting better.
“Covid has caused a shift in the industry. I think a lot of people have been exposed to ebikes for the first time, that may have not in the past.
There are now a lot more people aware of ebikes across all sorts of demographics.”
For more information about Leon Cycle visit www.leoncycle.com.au or call (03) 9069 5443.