A French entrepreneur has turned his passion for endurance cycling into a promising business based in Hong Kong.
Every morning, Pierre-Arnaud Le Magnan takes his mountain bike for a ride around the rugged hills near his home on Hong Kong’s Lantau Island. More than pleasure, the daily ritual helps the veteran mountain biker expand his business. The founder of high-end mountain bike brand Chiru, Mr Le Magnan cycles to test his products first-hand for quality control. The area’s challenging bike trails may make the most experienced bikers break out into a cold sweat, but they are a blessing for Mr Le Magnan.
“A bike that performs well on these trails can perform well anywhere,” he said. “Hong Kong has some of the most challenging terrain you can find in the world. It is extremely difficult to ride on these trails. If you have a bike of very good quality, these trails can easily show it, whereas on an easy trail, with no technical challenge, it’s more difficult to tell. So Hong Kong is great for my business,” Mr Le Magnan said.
Named after a Tibetan antelope, Chiru started off as “a story of passion” for Mr Le Magnan. He grew up in northeast France and came to Hong Kong in 1995 to work for a French manufacturing company before setting up an industrial trading company in 1999. A former engineering designer, Mr Le Magnan regularly takes part in international racing events. To optimise his performance, he has long applied his technical know-how to design mountain bikes that suit his specific needs.
Four years ago, he took his hobby and skills to a new level by launching Chiru in Hong Kong. The brand specialises in high-end bikes made from carbon fibre, with a specific focus on endurance riding. Prices range from about US$2,500 to US$7,700 per bike. Since its inception, Chiru has developed an elite clientele mainly in the West, including a French-Swedish champion team from the Adventure Racing World Series, and several top teams from the United Kingdom, France, Sweden and New Zealand.
Mr Le Magnan taps his biking world network to promote his products. “I find my clients mostly through word-of-mouth. Mountain biking is a small world where everybody knows each other. I go up to them at races or during practice and go: ‘Hey guys, we’ve talked about this bike before; do you want to test it?’ The best thing is to ride with them and exchange ideas with them on a trial-and-error basis. Then we try to improve our bikes to make them more comfortable, which would make bikers perform better on the road,” he said.
Chiru sources carbon fibre from Japan. Its components are manufactured mainly in Taiwan and Guangdong before being shipped to Hong Kong, where they are assembled by Mr Le Magnan and a colleague. Apart from its hilly terrain, Hong Kong offers many advantages, according to Mr Le Magnan.
“Hong Kong is the perfect place for me. Being a free port, it imposes no tax on the components we import and there’s no paper work, unlike China and Taiwan. It is close to our factories in the mainland and Taiwan,” he says. “I can also easily access the biking trails around Hong Kong and ride five times a week. I can ride and test a bike in the morning. Then I go to work to make some modification to the bike. The next day I would be in a factory. There are very few places in the world where you can do all that.”
Chiru has focused on the international market in its first years, but Mr Le Magnan said he’s now ready to diversify into the Asian market, particularly the Chinese mainland. Last October, he took Chiru to Nanjing’s Asia Bike Trade Show, and this year he’ll promote the brand in the China Cycle Show in Shanghai.
“My strategy is a top-down one. Chiru has been established on a high-end level. Now we are going to adopt a volume-oriented strategy, whereby we will produce a larger number of bikes at a third of the value of the current models,” he says.
Racing to China
“With that, we will tap bigger markets, especially China. The leisure and sport market in China is still not that big, but over the last three years we see a trend developing. As the middle class continues to grow, more people are getting interested in mountain biking. I believe there is strong growth potential in the coming decade in the China market and also Southeast Asia. Chiru will target them, but Hong Kong will remain the base of the business.”
Published on Trader’s Choice of the Trade Development Council on 8 January 2014