Chinese electric scooter maker Niu Technologies said it is on track to open 10,000 stores nationwide over the next five years, as replacement demand stays robust following the implementation of tougher national standards for two-wheelers.
Why it matters: Nasdaq-listed Niu aims to sell 6 million scooters worldwide in 2025, a tenfold increase from 2020, CEO Li Yan said during a press conference on Wednesday.
Details: The company sees lower-tier markets as key to its growth in China.
- Speaking to journalists on Wednesday, Li said the company expects to nearly double its annual production capacity to 2.1 million units during the second half of this year.
- The company aims to be in a position to accommodate high demand during peak season, which starts in July.
- “We are expanding our footprint in lower-tier cities and even rural areas with a growing sales team and a diversified product portfolio… The market is huge and what we’ve covered is only the tip of the iceberg,” said Li (our translation).
- The company also launched ten new scooter models on Wednesday.
Context: Niu reported sales of around 602,000 scooters last year, rising 43% year on year. In the same time period, its store count increased by over 50% to 1,616 shops in China, despite the Covid-19 pandemic. The new shops are mainly in first and second-tier cities.
- Analysts expect Niu’s sales to rise as new scooter standards force drivers to replace their vehicles.
- Most of its competitors use cheaper but heavier lead-acid batteries, making it hard to meet a 55 kg (121 pounds) limit and offer a comparable driving range. Niu’s lithium-ion batteries deliver better range at lower weights.
- China International Capital Corporation (CICC) forecast record sales of around 30 million lithium-ion battery scooters in 2021, more than double compared to last year, according to a report (in Chinese) published last month.