Course project entrepreneurship and innovation topic electric assistance bicycles with integrated safety features

VIET NAM – KOREA UNIVERSITY OF INFORMATIONTECHNOLOGY & COMMUNICATION FACULTY OF DIGITAL ECONOMY AND E – COMMERCE --- --- COURSE PROJECT ENTREPRENEURSHIP AND INNOVATION TOPIC: ELECTRIC A

VIET NAM – KOREA UNIVERSITY OF INFORMATION

TECHNOLOGY & COMMUNICATION

FACULTY OF DIGITAL ECONOMY AND E – COMMERCE

- -

COURSE PROJECT ENTREPRENEURSHIP AND INNOVATION

TOPIC:

ELECTRIC ASSISTANCE BICYCLES WITH INTEGRATED

SAFETY FEATURES

Class : 23GIT Instructor: Prof Bùi Trần Huân Members : NGUYỄN TUẤN LỰC

PHAN MINH VŨ

DƯ THỊ NHƯ YẾN NGUYỄN THỊ ÁNH VY

Da Nang, June 21 2024st

VIET NAM – KOREA UNIVERSITY OF INFORMATION

TECHNOLOGY & COMMUNICATION

FACULTY OF DIGITAL ECONOMY AND E – COMMERCE

- -

COURSE PROJECT ENTREPRENEURSHIP AND INNOVATION

TOPIC:

ELECTRIC ASSISTANCE BICYCLES WITH INTEGRATED

SAFETY FEATURES

Class : 23GIT Instructor: Prof Bùi Trần Huân Members : NGUYỄN TUẤN LỰC

PHAN MINH VŨ

DƯ THỊ NHƯ YẾN NGUYỄN THỊ ÁNH VY

Da Nang, June 21 2024st

TABLE OF CONTENTS

1.Market Research and Idea Generation

1.1 Market Analysis

The global electric bike market size was valued at USD 34.98 billion in 2024 and

is projected to reach USD 51.78 billion by 2029, growing at a CAGR of 8.16% during the forecast period (2024-2029)

The global electric bike market was valued at USD 14,404.8 million in 2022 It is expected to reach USD 25,956.0 million by 2029 The market is projected to exhibit a CAGR of 10.3% during the forecast period

This growth is primarily driven by the increasing adoption of electric bikes as a daily commuting mode worldwide

The market is witnessing a surge in sales of electric bikes attributed to consumer-friendly features such as health benefits, cost-effective mobility options, and convenience

of riding

The Asia Pacific electric bike or e-bike market is estimated to have witnessed sales

of around 16.2 million units in 2022 China, Japan, and Indonesia are anticipated to account for a significant portion of the overall sales throughout the historical period China held over 90% of the global electric bike market share in 2022 However, the country has witnessed stagnant growth in recent years and the market is nearly saturated

In Europe, electric bike sales have surged in recent years with countries like Germany, Belgium, and the Netherlands witnessing high sales of electric bikes

This trend is attributed to the rising demand for electric bikes for commuting, sports, and leisure activities

Subsidy programs and tax incentives for electric bikes in Sweden, Belgium, and France are likely to support significant growth in the European electric bike market during the forecast period

The North American electric bike market is growing due to the increasing demand for low-speed two-wheelers in recent years

Various electric bike sharing service operators are introducing electric bikes into their fleets, which is expected to support the growth of sales of these bikes in the near future

Electric bicycles have long been a relatively familiar product for Vietnamese consumers With two-wheeled vehicles being the primary mode of transportation in Vietnam, it seems to be a lucrative market for distributors of electric-assist bicycles According to a report by Statista the overall bicycle business revenue in Vietnam,

is expected to reach $298.5 million in 2023 The projected compound annual growth rate (CAGR) for the period 2023–2027 is 5.88%, leading to an estimated total bicycle market revenue of $371.8 million by 2027

In terms of sales, Statista predicts that the number of bicycles sold in Vietnam will reach 2.49 million units by 2027 It’s evident that the potential of the bicycle market in Vietnam remains substantial As electric bikes gain acceptance and popularity among consumers, there are numerous opportunities for the electric bicycle business to further develop alongside the overall growth trend in the bicycle market

Beyond consumers’ increasingly positive perception of electric bikes, their application in areas such as after-sales services and electric bike rentals is expected to drive the market during the period from 2020 to 2027 Additionally, factors like convenience and operating costs contribute to the growth of the electric bicycle market One of the reasons behind the improved purchasing power for electric bikes is the emergence of several prominent brands that are attractively designed and cater to the younger generation These brands offer a diverse range of prices suitable for consumers’ budgets

The current electric bicycle market also includes electric-assist bicycles, which are bicycles equipped with motor kits to assist acceleration during movement This feature allows users to control the bicycle without excessive fatigue It addresses some of the challenges associated with traditional bicycles, thereby enhancing demand for electric bikes

Moreover, another issue related to the Vietnamese electric bike market has been resolved recently: supply availability Distributors and retailers have increased their imports of new electric bicycle products due to the rising demand for electric bikes in recent times

According to a survey commissioned by the United Nations Development Programme (UNDP) and conducted by the High-Quality Vietnamese Goods Business Association (HVNCLC), electric bicycles are the second most used electric vehicles in Vietnam, accounting for 27%.Previously, the electric bicycle market was dominated by major players such as Asama, Hitasa, Sufat, etc., whose bikes were a common sight on the roads or in the parking lots of high schools However, today this market is not only reserved for these well-established giants but also welcomes new brands like DKBike, HKBike, and Vietnamese brands like Vinfast with their electric bicycle models such as EVO and KLARA

Electrically assisted bicycles are electric bikes designed to look identical to conventional bicycles but with an additional electric motor to aid pedaling or even allow for autonomous operation Outwardly, electrically assisted bicycles do not differ from regular bicycles and come in various designs for users to choose from

The market for electrically assisted bicycles in Vietnam still has significant growth potential The presence of major brands such as Giant, Xiaomi, Homesheel, and notable Vietnamese brands like ADO and WIBIKE indicates a promising future for this segment

1.2 Proposed business idea

Electrically assisted bicycles are a part of advancements in bicycle technology, offering a combination of human power and technology to create a more efficient and convenient means of transportation for users

3 Electrically assisted bicycles are designed with a vision and service to cater to many consumers, in contrast to traditional bicycles that can only be operated by pedaling Equipped with an electric or mechanical assistance system, these bicycles help riders operate the bike more easily

This system includes a battery or sensors and an electric motor, usually integrated into the front or rear wheel of the bicycle When the rider pedals, the electric system activates and propels the bike forward more effortlessly, helping to save energy and making the bike easier to control

Electrically assisted bicycles are also very useful when traveling through flat areas

or slight inclines, where traditional biking might be challenging With advanced technologies such as intelligent assistance systems, lithium-ion batteries, remote controls, and other features, electrically assisted bicycles are becoming a popular technology product among many Vietnamese customers and are increasingly widespread

Originating from the need to use bicycles as a means for sports, transportation, or recreation, traditional bicycles have certain drawbacks such as requiring continuous pedaling to move forward and lacking technological features like GPS and mapping Electrically assisted bicycles or electric mountain bikes were developed to overcome these limitations

The primary customers for electric mountain bikes with smart features are young people aged 18-25 These individuals are adventurous and quick to adopt new technologies

Cycling is inherently an egalitarian sport with no gender discrimination or "sports just for men" stigma

In the 18-25 age group, most customers are either students or recent graduates, making the price of the product a crucial factor in their purchasing decision

Nowadays, many young people enjoy traveling and exercising, making electric mountain bikes a suitable choice for them

Starting from the issues customers face, we have developed a product: an electric mountain bike Unlike conventional electric mountain bikes, our product features several standout attributes It can charge while in motion, utilizes carbon fiber to minimize weight, includes LED lights for night illumination, incorporates a 7-inch display for showing maps, GPS, and route information usable offline, and boasts an essential feature for cyclists: an SOS signal capability to alert the nearest rescue center

The principle behind this feature involves each bike having a virtual assistant If the assistant detects the bike has been stationary for an extended period, it will inquire whether the owner is resting or facing a genuine issue If there's no response within 10 minutes, the bike's system will automatically send out an SOS signal for assistance Competitor Analysis:

Manufacture

Giant  Sturdy

frame

 Large

capacity

battery

 Hill-hold

feature

 Anti-slip

pedals

 No capability to charge while moving

 Heavy weight

of the bike

 Lack of GPS positioning feature

ADO 

Cable-controlled

suspension

 Aluminum

alloy frame

 Large

capacity

battery

 Safety brake

system

 High cost

 No capability to charge while moving

 Lack of GPS positioning feature

ENGWE  Powerful

motor

 Large

battery

capacity

 Large LCD

screen

 Foldable

capability

 High cost

 Bulky appearance resulting in limited mobility

5 Our product

 Electric assistance

 Battery – Powered Boost

 LCD screen, GPS, SOS

 Hight cost

 Heavy weight

of the bike

2 Lean Startup approach

2.1 Business Model Canvas (BMC)

MAIN

PARTNER MAIN ACTIVITY

PROPOSED VALUE

CUSTOMER RELATIONSHI P

CUSTOMER SEGMENT

Collaborate

and associate

with Vietnam

companies:

Vier Cycle,

Sunwell,

Vietnam,

Vietnam Fast

Image

promotion

partners: Kcc's

such as Phuc

Thanh, Nhu

Le, Em Iy

Distribution

partners:

bicycle stores

nationwide

and at

exclusive

stores in Da

ang, Ho Chi

Minh City,

Hanoi

 Monitor and manage

(quantity, price) the

supply of materials

to ensure stability

 Manufacture

electric-assisted bicycles

 Combine online and

direct advertising

campaigns,

collaborate with

major distributors to

expand presence

 Build quality that carries the brand's reputation

 Optimize benefits for users

 Provide a means of transportation that helps protect the environment while still supporting the driver

 Distribute products in many price segments while trying to maintain quality

 Accumulate points for each customer transaction

 Enthusiastic, friendly consultants support customers

 Hotline and website to support answering customer inquiries

 Customers who are passionate about cycling

 Targeting a young and wealthy customer group

 Targeting customers who see electric-assisted bicycles as a means of transportation within a short range that helps protect the environment and require minimum effort to operate

KEY RESOURCE DISTRIBUTION

CHANNEL

 Sales team,

production team,

market research

team

 Communication and

advertising team

 Investors

 Manufacturer

 The system of stores

 E-commerce platforms such

as Shopee, Tiktok shop

Customer Survey Questionnaire:

Picture 1: Customer’s sex

Picture 2: Customer’s age

Picture 3: Customer’s work

Picture 4: Customer’s habit

Picture 5: Customer’s favorite sport

Picture 6: Customer’s ride bike habbit

Picture 7: Customer’s difficulty

Picture 8: Where customer’s ride bike

Picture 9: Customer’s issues

Picture 10: Customer’s wanted on a bicycle

Picture 11: Reasons why customer choose bicycle as their main vehicle

2.2 Marketing mix plan 4Ps (Customer acquisition process)

 Product:

Design & Color: The bicycle features a modern mountain design with a blue color scheme, accented by orange and white details

Frame: It has a lightweight yet sturdy frame, suitable for off-road cycling Suspension: Equipped with front suspension forks, it offers shock absorption on uneven terrain

12 Tires: Large treaded tires provide substantial grip on rough surfaces Electric Assist: An electric motor housed centrally in the frame aids pedaling, with a battery pack mounted above the pedal area

Brakes: The bicycle is fitted with disc brakes on both wheels for efficient stopping power

Saddle: A comfortable saddle is positioned atop an adjustable seat post to accommodate different rider heights

Usage: This e-bike is designed for mountain biking enthusiasts who seek assistance during their rides without compromising the off-road experience Material: aluminum, steel, carbon fiber,

Weight: 7.7 kg - 15.6 kg

 Price: Competitive pricing strategy

Cost-Based: Determine cost of production and set a price that ensures a profit margin

Value-Based: Price the bike based on the perceived value to the customer, considering the advanced features and technology

 Place: Multi-channel distribution

Online: Sell through an e-commerce platform with direct-to-customer shipping

Retail: Partner with bicycle shops and sporting goods stores for in-person sales

 Promotion: Integrated marketing communications

Advertising: Use online and print media to reach target audiences Social Media: Engage with potential customers on platforms like Instagram and Facebook

Events: Sponsor local and regional mountain biking events to increase brand visibility

3 Financal Plan

 Owner’s capital: 40.000.000.000 VNĐ

 Investor’s capital: 30.000.000.000 VNĐ

 Way to mobilize capital: use one’s own available capital, call for investment from friends and family, bank loan, call for investors,

 Expected revenue: 400.000.000 VNĐ/month about 5.000.000.000 VNĐ/year

 Product cost: 24.000.000 VNĐ/product

 Estimate Cost : predict about 800.000.000 VNĐ/month

 Fixed Cost:

13 Machine Cost: predict about 4.000.000.000 VNĐ

Business Premises: predict about 1.000.000.000 VNĐ

Paying Staf: predict about 600.000.000 VNĐ

 Variable Cost:

Direct Materials Cost: 4.000.000.000 VNĐ/year

Advertising and Marketing Cost: 700.000.000 VNĐ/year

Transport and Distribution Cost: 500.000.000 VNĐ/year

Discount Program Cost: 1.200.000.000 VNĐ/year

 Profit :

Profit = revenue - total costs

To recover the initial capital and first year’s profit, production must continue: + The revenue in the 2nd year will be: 4.000.000.000 VNĐ 40.000.000 x 100000

+ The revenue in the 2nd year will be: 10.000.000.000 VNĐ 40.000.000 x 250000

+ The revenue in the 2nd year will be: 20.000.000.000 VNĐ 40.000.000 x 500000