What a nice weekend we had in the northeast, perfect for getting a bit of rock practice in on the mountain bike and then playing the role of floor mop in Sunday's cx race, despite riding in all respects at a level that made me quite happy - but for the front of the race sneaking inexorably away.
So, with all of the obstacles I've identified working against Dengfu, why do I think they'll become a brand on the world stage?
Asset 1: Confirmation Bias - You might be surprised to know that the above picture (removed) was posted by a guy who's happy with his purchase. He's using them with disc brakes, so this particular thing isn't a direct immediate problem for him. The point of this is that people will accept a lot to justify that they made the right purchase, once the purchase is made. This is a well-proven psychological concept. So, whether the preponderance of opinion is pro or con, some amount of the pro is going to be in support of product that looks like this. "They've given me no problems..." In order for us to sell product, we feel like it has to be perfect. If they can sell product like this and satisfy customers, wow.
Asset 2: Sell It Like It's Hot - As mentioned before, Mike and I get a lot of emails from Chinese vendors, and, let me tell you, if coffee is for closers, these guys are as well caffeinated as you could imagine. "You buy now" is the last sentiment of every one of these things. You read it the FAQs on their sites and in the forums as well - we've got whatever you want, you buy now. They close.
Asset 3: Internal Market - The most embarrassingly bad book I've ever read is "The End of Cheap China" by Shaun Rein, but he makes one point worth considering: in any category, if a Chinese supplier manages to become the big supplier to the domestic market (not a layup - the history thus far has been that you start buying foreign alternatives the second you can afford to), they are de facto a player in global volume. If recreational cycling takes off in China, any brand supplying that market in a meaningful way becomes huge.
Asset 4: Major Threat - This supply channel is potentially too big for anyone to ignore. I've seen a bunch of instances where shops will build wheels on Chinese rims - this is actually kind of a big thing in cross with tubulars. So, call cross tubulars a trojan horse for the whole thing; with cross tubulars, people figure they're sort of disposable, so you might as well buy the cheapest thing that might possibly work. Shops start working with them in that venue, then if those don't just plain suck people have developed a taste for buying stuff from their shops at new price points. And the shops have to win back the people who've said screw it the shops are too expensive/don't stock enough/don't know as much about this stuff as I do. The interesting thing will be how the big three and the secondary and tertiary brands deal with this as well. But no brand can afford to totally ignore this supply channel.
Asset 5: Audience - Previously I said these trading companies are anonymous and confusable and interchangeable, but that winds up being an asset, too - collectively, China Carbon, Inc makes a story that's far bigger than any individual component of it.
Asset 6: Bombast - A huge part of what Mike and I are doing with all of the testing that we do is to find out what's actually a "sellable benefit." By that I mean that we're informed and discreet about the claims we make, we don't make claims that we can't support. In our minds, this puts us at odds with a lot of the industry, but we're prepared for a whole new level of bombastic claims coming out of this supply channel. That "beefy frame" pictured in the last episode proves they know about hitting the hot button lingo. If they get a bit more elegant about it, look out. My unfortunate belief on this is that you gain more in bombast than you lose - more people sort of believe it and respond to it positively than are turned off by it. A lot depends on the credibility of the claimant, of course, but I think that BIG claims generally work. November is structured to pursue meaningful relationships with the people who are turned off by empty claims, which is precisely what we want to do, but I take it for granted that this ultimately limits our growth. That limit, fortunately, is well beyond the level at which November is a good business.
Asset 7: War of Attrition - I speculate that these guys are set up to wind a war of attrition. That is to say that they can afford to price at unsustainably low prices for an indefinite period of time, starve out a bunch of companies who can't compete on that footing, and create a bunch of room for themselves in the marketplace.
Asset 8: Promotion Works - It's only a matter of time before a major pro team is sponsored by one of these guys. Major pro team sponsorship sells product. Minor pro team sponsorship doesn't sell product. Sponsoring a WorldTour (is that what we call it now?) team is an instant path to legitimacy (whether deserved or not) and audience.
I'll have a few cleanup things to follow, but that's the substance of my thoughts.