Cycliq agreement with Cycling Express to boost sales
Published on: | by Trevor Hoey
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”.