Cycliq agreement with Cycling Express to boost sales
Developer and distributor of high-definition camera and lighting combinations for bicycles, Cycliq Group (ASX: CYQ) announced on Thursday that it had secured an agreement with online bike supplier, Cycling Express which will expand the availability of its products across the Asia-Pacific region.
This agreement comes only two days after the company launched its cycling accessory products on Amazon Japan, one of the fastest-growing e-commerce sites in Asia with revenue increasing by 31% to US$10.8 billion in 2016.
CYQ is leading supplier of high-tech bike safety and action camera accessories, including the Fly6 rear facing all in one safety light and high definition camera.
Not only did the Amazon Japan agreement provide CYQ with access to Japanese consumers, but as a conduit to consumers throughout other Asian regions such as mainland China, Macau, Hong Kong, Taiwan and South Korea, it has substantially boosted the company’s addressable market.
Similarly, the Cycling Express agreement has a sales network that covers most of those regions, as well as Singapore, Malaysia and Australia.
Many of these countries have a high per capita usage/ownership of bicycles, a factor reflected in CYQ’s comments today regarding the company’s strategy to improve availability of products in high-volume regions.
The market traction CYQ could gain in these markets is yet to be determined, so investors should seek professional financial advice if considering this stock for their portfolio.
While boosting sales and growing the top line is important for CYQ, this deal is strategically significant in that it provides the company with the ability to deal directly with retailers, effectively increasing margins for both CYQ and the retailer.
On this note, CYQ’s chairman, Chris Singleton said, “The direct sales account with Cycling Express streamlines the process of getting our products to the end customer, and we will see an immediate lift in our margins, as well as a predicted increase in sales”.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of Longhou Capital Markets Pty Ltd (AFSL No. 292464). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.