Melbourne-based company BikeExchange has revealed plans to expand its operations in Latin America, outlining the strategy while unveiling a quarterly business update that shows healthy growth for the company in general.
During an online presentation for investors and media late last month, BikeExchange Global CEO Mark Watkin said the company would acquire the remaining 50% of BikeExchange Colombia SAS (BECOL), with the $1.2 million transaction expected to be completed this month.
He said full ownership of the entity, which had operated as a joint venture for the past four years, sets the foundation for a strategic partnership with Auteco, the leading distributor of bikes and electric vehicles in Colombia. That partnership would provide leverage for greater activity in the Colombian market and expansion into other Latin American countries.
“It really cements that fourth region for us, LatAm, particularly Mexico and Chile as our next regions,” he added.
The BECOL purchase includes the acquisition of four retail stores in Colombia, which Mark says are: “important touchpoints for the brand, industry relationships and the customer experience.
“They are very much experiential and will be interesting destinations; test and learn aspects for the whole customer journey as we progress.”
BikeExchange’s status as the world’s largest network of cycling-focused marketplaces was strengthened by figures disclosed during last month’s presentation.
The business update showed the number of sellers trading through BikeExchange increased by 20% during the first half of 2021-22 (to 1,734) compared to the corresponding period in the 2020-21 financial year.
That contributed to a similar rise in the number of sales transactions on the BikeExchange online platform, an increase of 18% to 18,412 during the six-month period.
Mark said that was a half-year record in the company’s 13-year history.
At the same time, the average value of orders was $645, 32% higher than the matching six months in 2020-21.
They combined for a 46% increase in total transactional value, climbing to $13.8 million.
“Website traffic remained strong, with an annualised 21 million sessions for the half, as we focused on converting visitors to transactions,” he explained.
“The business is seeing more normalised levels of overall website traffic, after the high peaks experienced in the initial COVID lockdown periods of 2021, with traffic above the comparable period for the first half of 2020-21.”
In a further effort to improve the company’s transaction strike rate (its conversion rate of visits to sales was 0.24% for the quarter), BikeExchange purchased US-based ready-to-ride bike delivery company Kitzuma.
Mark said Kitzuma’s integration to the company would be valuable in BikeExchange’s focus on growth in the US market, by removing a key obstacle to online bike sales. Kitzuma’s proprietary logistics systems – including bike racks in its vans that eliminate the need to pack bikes in boxes and reassemble them upon delivery – greatly improved the shipping and logistics component that could create “friction” in online sales.
“Kitzuma is globally scalable and can be replicated in other markets, and we are excited about the growth potential for the business,” he said.
BikeExchange reported “solid results” in all four of its geographic hubs, including a 60% increase in total transactional value (TTV) in Europe – to $4.1 million.
That compared to a 22% TTV rise in Australia and New Zealand, accompanied by a 21% boost in revenue.
In North America, it recorded a 9% increase in TTV and a 37% decline in quarterly revenue compared to the previous corresponding period – a result it attributed to inventory challenges, retailer-supported promotional activities and a change in the mix of retailer commissions.
Similarly, BikeExchange’s TTV in Columbia dropped by 16% for the second quarter of 2021-22 because of payment technology issues, which were addressed by the end of that quarter.
Mark touched on a number of adjustments to the company’s online platforms, including scoping a significant update to the BikeExchange website’s front end and platform to “strengthen the online customer journey, increase transaction conversion and allow more flexibility with integration with relevant third parties”.
BikeExchange has also implemented the Hubspot B2B platform across its four global regions and is rolling out the Klaviyo marketing automation platform after its successful introduction in Australia and New Zealand.
He said BikeExchange was well-positioned for its next stage of growth, bolstered by three key appointments to its executive team: new Chief Customer Officer Rebecca Boxall, Global Head of Seller Success Joe McArdle and its new Regional and Sales Lead for Europe, Andreas Liertz.
“We have highly experienced executives with clear mandates to increase customer conversion and transaction value in Australia, North America, Europe and Colombia, guided by our e-Commerce first strategy,” he explained.