NIU stays one of many main electrical scooter firms on the planet, each in gross sales in addition to know-how. The corporate’s inventory, traded on the NASDAQ, is up 91% year-to-date and 267% from its low in the course of the pandemic.
NIU’s CEO Yan Li discusses the keys to NIU’s current success in addition to how the US commerce conflict has NIU investigating manufacturing in Southeast Asia and North America.
We lately lined NIU’s Q1 2020 financial report, displaying harm from the COVID-19 pandemic however a surprisingly fast path to restoration.
The corporate had offered over 1 million electrical scooters by the tip of 2019, placing it in a powerful place pre-pandemic.
As Yan defined:
As we’re in a mobility business, the COVID19 concern has after all impacted our operations in Q1. However we really maintained actually wholesome margins in Q1 with a 23% progress margin. We really anticipate to start out recovering in Q2 with our income anticipated to develop by double digits yr over yr as reported.
A significant component in that fast restoration has been China’s turnaround following the COVID-19 pandemic.
That has enabled a powerful return to gross sales in NIU’s largest market.
As Yan continued:
We really seeing a really robust demand rebound in China in Q2. In China we now have about 1,000 shops with all of them are open for enterprise from April and they’re observing a powerful monitor in gross sales demand.
On prime of that our gross sales in China have additionally skilled the current phenomenon of the live-streaming gross sales platform in China. We launched two new merchandise by way of live-streaming in Could and June that attracted greater than 7 Million views and greater than 50,000 pre-sales of scooters, equipment and companies.
However China isn’t solely accountable for NIU’s turnaround.
Yan additionally credit the worldwide marketplace for NIU’s current success.
NIU operates in 42 international locations around the globe and is rapidly including extra.
Our worldwide gross sales signify round 15% of our complete income in 2019. The worldwide markets are recovering slower than China as our gross sales community in most worldwide markets solely resumed gross sales in Could. However we’re very excited to see this acceleration of transition from public transportation to particular person mobility throughout the cities within the US and Europe.
We’re repeatedly dedicated within the international market. Even in the course of the pandemic we opened flagship shops in Rome, Lisbon and Antwerp, and we now have extra flagship shops opening throughout Europe within the subsequent few weeks.
Yan additionally attributes a portion of NIU’s success to its partnership with scooter-sharing operations.
These operators keep massive fleets of electrical scooters which commuters can lease by the minute as a substitute of investing in possession of an electrical scooter.
Yan defined the significance of these ridesharing operators in NIU’s success, and the way the COVID-19 pandemic has affected their very own operations and demand:
And lastly we additionally assist 19 sharing operators throughout 14 international locations. In current weeks as cities have opened up, all of our ridesharing operators are seeing robust progress in ridership. For instance, our sharing companion Revel within the US has seen an enormous surge of demand in New York Metropolis. I’ve associates in New York Metropolis who’re utilizing Revel each day now.
NIU was already experiencing massive progress earlier than the pandemic hit, however COVID-19 has additional impacted the corporate’s trajectory.
Yan defined how these results are being felt at NIU and within the bigger mobility business:
Initially, the city mobility market is all the time a necessity. Folks all the time must go to work, to commute, to go grocery buying, and the business outlook has already been very brilliant.
We’re at present seeing three traits on this business. The primary is a shift from vehicles or public transportation to particular person commuting units like our electrical scooter and moped automobiles or our electrical bicycles, by both an possession mannequin or a sharing mannequin, primarily as a result of these units are each more room environment friendly and extra time environment friendly. And this shift was already taking place earlier than the pandemic, nevertheless it has accelerated due to the COVID19 well being issues as properly.
Secondly, we’re seeing a shift on this business when it comes to vitality know-how from petrol gas to electrical automobiles. And in China we’re seeing a shift in electrical automobiles from lead acid battery know-how to lithium-ion battery know-how.
And this development really allows the third development, which is a shift from ‘dumb’, unconnected units to sensible, linked options. So for instance, our scooter isn’t only a scooter, it’s a scooter with a mind, a scooter that networks with a cloud of scooters to assemble extra information that permits higher product improvement and higher consumer expertise.
Lastly, Yan spoke about NIU’s progress within the US in the course of the commerce conflict between the US and China, and the way it might result in new manufacturing places for NIU:
The tariffs within the US have created some influence for us. Final yr, our gross sales within the US market had been pretty small in comparison with the worldwide market. However we do have excessive expectations for the US market. We’re seeing an enormous demand from the sharing mannequin and we’re additionally seeing an enormous demand from the person possession mannequin.
So at this level we’re really exploring choices for international manufacturing to allow us to enter the US with lowered tariff. We’re places in Southeast Asia in addition to places in Mexico and doubtlessly within the US as properly.
May a Chinese language electrical scooter firm assist create US manufacturing jobs?
It’s most likely a bit too quickly to take a position, however with over 1 million NIU electrical scooters offered and demand rising within the US, it may be extra reasonable than you suppose.
by way of: Bloomberg
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