Counterpoint: Is Dengfu the next big bike brand?

Uncategorized

A week ago when Dave leaked his intention to write a blog series on why he thinks Dengfu could be the next bike bike brand I told him it would have to be an exceptionally cogent argument, because I just don't see it happening. And not only for the reasons Dave points out here and then some more here, nor for any reasons having to do with product quality that were inaccurately ascribed to us here. My argument for why Dengfu et al will remain marginal players has more to do with brand and business strategy. Here's why.

1. Dengfu fails as a brand. Brands exist to do one thing for consumers - relieve them of the burden of decision-making. It's why Specialized and Trek and Cannondale sponsor pro teams and buy extensive ad campaigns - so you evaluate their products outside of purely logical and practical analyses of price, weight, stiffness and other measurable and comparable metrics, and instead fall in love with the idea of owning them. Look at the practice in another industry. If you had to read the ingredients of every bottle of shampoo before buying to make sure you were getting something you could trust would meet your expectations, you'd be paralyzed. In the bike business, where purchases are more considered, analysis paralysis is very real. The perceived fear of failure of buying a bike that won't make you more enviable or wheels that won't make you 4 seconds faster in a 40K TT is a powerful force. Go online to any forum site and you'll see this in action: "Vittoria Open Pave 24mm vs Conti 4000s 25mm" (4272 views on Weight Weenies), "Power meter brand reliability" (3391 views), "Help me pick a new bike? Dogma F8?" (2274 views). Want evidence that the Chinese options are contributing to analysis paralysis instead of alleviating it? "Open mold wide profile carbon wheels" thread - 125,293 views. Any company whose products promote such compulsive should-I-or-shouldn't-I is failing as a brand. For our part, we're happy to show up in the forums under these circumstances ("November Rail 52 vs Zipp 404 FC?" - 1198 views) because it means our brand is being exposed to new users. But I know also that every time someone asks if we're a good choice is an instance of the brand not doing its job. 

2. A willful resistance to differentiate. When we launched, our point of differentiation had nothing to do with product (which was open mold and under-adorned graphically) and everything to do with distribution (selling direct) and operations (organized around reducing internal expenses and therefore customer costs). That works great with customers who place price before product, and who do not value product differentiation. We had a realization at some point though that the only thing worse than winning the race to the bottom is coming in second. Now Dengfu is economically better equipped than we are to win a race to the bottom and still survive. Doing so however may grow revenue but does not create brand value. That's not to say that all strong brands are for premium products. Many value-based brands command raving fan followings - Trader Joe's, Southwest Airlines, Pabst Blue Ribbon. But it's not solely because they're less expensive - they're less expensive AND provide a differentiated product and/or industry leading experience. So far, the product strategy of Dengfu et al is to wilfully avoid differentiating and instead to try to resemble recognizable products. Part of the reason is that by all informed accounts, Dengfu et al are not manufacturers at all, but trading companies that simply distribute the products provided by other even lesser known companies. It's impossible to have a consistent product strategy or philosophy built on products other companies give you to sell, so the only product strategy left to them is to suggest that whatever you're getting is just about as good as what you might get from a brand you've heard of.

3. They are not the ones to break through the distribution morass. Currently in the bike industry, a greater percentage of your purchase price goes towards distribution channel expense than product expense. The rise of direct-to-consumer sales (through companies like ours, Williams, Canyon and, yes, Dengfu) is starting to shift that, but only by fractions of a percent. You could argue that the strongest brands are in the best bike shops, but I'd posit also that brands rely largely on the shops as a tacit endorsement of the quality and trustworthiness of the brands. It's not just some company you found online, but one with the infrastructure and scale (perceived at least) to be anointed with shelf space at the shop closest to your home. For Dengfu to become a truly significant brand, it has to give consumers reasons to trust it over the endorsement of their local shop. Trustworthiness is not high on their list of brand attributes, not because of any lack in integrity but because of a lack of transparency. Customers just don't know who they are, who their people are, what they actually do, what their company values are, or why - besides low price - they should consider products. Believe me, it's not an easy thing to compete with products available at shops. You'd think selling for less is an asset, but when it comes down to trust and perceived quality, selling for less is actually a liability. Zipps cost $3K and Novembers are $1.5K? I guess Zipps are twice as good. So they must be 4x as good as Dengfus. If Dengfu does break through it would theoretically pay huge dividends for the brand, but the brand is a pre-requisite to actually turn the tide. 

So those are my high-level thoughts on the topic - basically that Dengfu can't be the next big bike brand until it first starts acting like a brand. And I don't see that happening in the forseeable future.


Older Post Newer Post


  • Hans on

    Yeah, I tend go agree with this perspective; Dengfu just doesn't act like a brand. Perhaps Farsports or Yoeleo would be better targets since their focus is more on wheels; however, the same basic arguments probably apply there too.Having owned a couple of Chinese carbon wheelsets, I will say that: 1) there is a relationship between value and cost (saying "you get what you pay for" would be overstating it, but when you pay 25% the cost of a name-brand wheel you don't get the same finish or build quality. 2) Disc brakes are going to have impact here; the failures you read about in with these rims are delamimation of the clinchers; when I am no longer worried about that, I will be far less reluctant to buy a cheaper rim. (Indeed, my carbon wheels now are disc-brake wheels; they perform flawlessly and the pair of rims cost a mere $400 after shipping and fees. Almost into alloy rim territory.)There is a lot of herdthink going on in the Chinese carbon fan-club forums, but at the end of the day for most consumers there is a high probability that they will be just as happy with those Dengfu rims as some Zipp 404s. And when you can get something that is effectively "as good" for a fraction of the price, it is hard to ignore that force. I think the biggest challenge is lack of information right now — and lack of transparency about who the factories are (i think i read somewhers that is Flybike for Dengfu, Hongfu). It will be interesting to see whether some of these Chinese companies can develop a stronger brand. Maybe an indicator will be when you can actually buy the frames/wheels/etc. with the company name on them — and not have to pay extra (effectively making that a custom paint job).

  • Dave on

    Hi Frankie -Thanks for the comment. I think what you and a few others have missed here is that this series of posts has nothing to do with comparisons between wheels. Discussion of product is at best incidental to the whole discussion. The question we're exploring is simply will Dengfu or a similar company become a major brand. That's all. Dave

  • Frankie - B on

    After reading your blog posts about Deng Fu, I really felt I needed to put one of your pieces of evidence into perspective:The funny thing is that you use this piece as a main piece of evidence that the Chinese wheels are the next big thing.Lets face it everyone who buys these wheels or is thinking about buying them, will feel a bit funny about it first. Will I receive my wheels? will they be straight right out of the box? will the brake track be as i hope it is, is the spoke tension even? are they going to hold up?then, after opening the box, 95% or, lets keep it low 90% of the buyers are going to be happy with what they did receive. Why? because they paid less then FFWD, ZIPP, Corima, Lightweight, November etc are asking for their wheels. the price difference often hovers around $1000,- That is is $1000,- that you don't have to explain to the significant other. Or, you can buy a myriad of other things from it, Hack, those $1000 roughly translates to €800,- that would put me on Mallorca for a week and a half.Now, please allow me to try to explain why your page view equation is not that right. Not all page views are created equal, you see?Vitt pave vs Conti 25mm or powermeter bla bla, or do i really need to buy this dogma f8 to look better then my friends all cover one topic. The Vittoria pave is put up against the cycling equivalent of a garden hose. etc. The Open mould wheel topic consist of a lot of topics and chit chat about all types of wheels and experiences with those wheels. you are comparing apples to oranges right now. Another thing that I personally think is making you look weak is that you are openly comparing your wheels to a chinese competitor. For all we know you are buying your rims from that region as well. (if you are smart you buy from Gigantex as i really trust Steve) This really sounds like a butcher who is testing the meat he is selling. If your brand is strong enough, you don't need to stand on the shoulders of somebody else to look taller. FFWD Wheels is very local to me and i have never heard of them doing something like this.

  • Dave K on

    Thank you, Frankie. We appreciate the input.

  • Frankie - B on

    Hi Dave,i think I got that point. Though while reading through the whole blog post series I couldn't shake the thought that a series of blog posts on here about the inferiority/ failiure of the Chines brands is an attempt in making November wheels look better. The question you used to write these posts about is an easy one to answer as most of the Chinese wheels sellers are actually resellers who are looking to make a quick buck. November on the other hand need to be consistent and need to give customer service as well. As you, probably, strive to be around for more then a couple of years.



Leave a comment

Please note, comments must be approved before they are published