SA-born Silverback strikes gold in global cycling markets
North America, Europe and China are the SA company’s main markets
As an importer and reseller of cycling products in the late 1980s and 1990s, Johannesburg entrepreneur Deon Retief spotted a gap for well-priced, quality bicycles in an industry dominated by international brands such as Trek, Cannondale and Giant.
"It’s a very competitive landscape and it’s quite saturated. I travelled quite extensively and dealt with many retailers, cycle shops and resellers, and I felt that a lot of brands were overcharging," he says.
"I knew that I could make the technology more accessible."
Electric bikes will hit SA as it is hitting Germany - every single person wants an electric bike
Retief’s belief led to the 2004 birth of Silverback in SA, a brand that offers lightweight performance bikes "at the right price".
"We got a lot of love in the local market because we offered a high-quality product that was design-engineered, but at a fair price," he says.
He soon expanded to Australia and Mauritius, and Silverback is now sold in 52 countries. The company moved its head office to Stuttgart, Germany, in 2010, and has offices in Cape Town, Dubai and China.
Retief declines to give sales figures for Silverback, only saying that "our economies of scale are big enough that we can continue to give the consumer a compelling offer".
The move to Germany was part of the strategy to build a global network, he says. "It’s the toughest market in the world [in which] to succeed. It is cut-throat, there are a lot of competitors, and the consumers are all about detail and quality."
For Retief, a lifelong fan of top German brands including Porsche and Mercedes-Benz, Stuttgart was the natural choice.
Counting in his favour is the growing popularity of cycling, with New York-based market intelligence firm Persistence Market Research estimating the global bicycle market will grow an average 4.2% a year from about $55bn at the end of 2017 to $80bn by the end of 2026.
Factors that will drive growth include intensifying traffic congestion, rising fuel costs, people’s growing health concerns, increasing government support for the adoption of bicycles as a primary mode of transport, and the development of dedicated cycling infrastructure.
The company’s key markets remain North America, Europe and China, which are expected to account for more than 75% of revenue up to 2026, according to Persistence Market Research.
Technological advances in the industry, notably electric bicycles, will also help to expand its markets.
Retief agrees with their findings. "The bicycle has been around for a long time, and it’s just becoming more exciting. There are a lot of new niche areas and categories and wheel sizes and materials," he says.
Developments around children’s bikes, for example, make cycling more accessible to families, while other niche areas — fat bikes for cycling in snow and sand, cyclocross bikes for on-and off-road cycling, gravel bikes and electric bikes — make the sport accessible to a wider audience, he says.
"Electric bikes will hit SA as it is hitting Germany — every single person wants an electric bike. It makes cycling accessible to everyone," Retief says.
Like most bicycle brands, Silverback focuses on researching and designing bicycle frames, which are built in China or Taiwan using additional parts from external suppliers such as Shimano brakes and gears and SUNRringlé rims.
Silverback recently started assembling bicycles in Germany, and has started investing in the engineering development of some parts and components.
Retief wants Silverback to control as much as possible of its supply chain.
"Improved ‘riding dynamics’ are added into the mix as an integral part of our frame design considerations," he says.
The company receives constant feedback on its bicycles from a wide range of riders — including its pro race team, its site user network, and from its brand ambassadors — and incorporates this into the design process. The feedback has led to a number of global awards and some key innovations: Silverback was the first company to build a USB charging port into a commuter bike.
"The challenge for us is to make sure that we remain relevant and that we continue to keep to our dictum — to offer the right product at the right price," Retief says.