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Listen and subscribe to “Vietnam Innovators” in Vietnamese: Apple Podcasts | Spotify | Google Podcasts | YouTube.
Vietnam, where motorbikes vastly outnumber both bicycles and cars, is yet to develop a taste for e-bikes that are taking Europe by storm. To Jack O’Sullivan, the founder of bike-tech company Modmo, the lack of domestic demand was never an issue as 86% of Modmo’s smart bikes go to Germany. Much more important was Vietnam’s friendly trade policy compared to the hefty tariffs China and Taiwan impose on exports to Europe. So when the EU-Vietnam free trade agreement was announced, the Dubliner swiftly shifted production to Vietnam.
Network effect
In China and Taiwan, says Jack, one can easily find databases of manufacturers on online marketplaces such as Alibaba. Not in Vietnam. Here you build your own database through word of mouth and networking. Thankfully, Modmo’s 3D render got lots of media coverage early on, including on Vietcetera. That’s when Jack finally started hearing from local subsidiaries of big Chinese and Taiwanese conglomerates who see e-bikes as a new, growing division.
Thanks to this interest from the big guns, Modmo is hoping for its next production run to be 70% Vietnam-made (the first one that shipped out just before Tet was 42% locally-made). Eventually, the goal is to bring this number to 90% through continuous investment in manufacturing capabilities. All that PR was good for the orders too: last year, pre-sales reached 1 million euro, with 4,000 bikes expected to be produced and shipped in 2021.
The bike that Jack built
Originally, Jack planned to have his sales and marketing team based out of his native Ireland. That changed when he realized just how deep Vietnam’s talent pool is. Admittedly, Vietnam wasn't even in the original sales roadmap, not only because of the underdeveloped cycling infrastructure but also because of the price point — Modmo’s ‘Saigon’ model retails for USD 3,000. To his surprise, it turned out there is in fact a market for premium e-bikes right here, with customers particularly loving such features as clip-on accessories and the anti-theft solution offered via Modmo’s GPS-powered app.
Currently, Jack is in talks with a big distributor in Vietnam to open Modmo showrooms in Saigon, Danang and Hanoi. In the meantime, the team will continue their monthly test drives and roadshows that allow the team to get direct feedback from their Vietnamese customers. Another area of focus is on sustainable manufacturing. Modmo is strict about its no-single-use-plastic policy and expects all suppliers to use eco-friendly, reusable packaging designed, made and delivered to them by Modmo. Eventually, Jack wants to position Modmo as a bike-tech company rather than a manufacturer.