Promovec eyes expansion amid industry challenges
Comments Off on Promovec eyes expansion amid industry challengesAlthough the e-bike industry is experiencing financial turbulence, Promovec CEO Jesper Lundqvist remains optimistic about the company’s future, driven by robust ambitions and strategic innovation.
Founded several decades ago, Promovec holds approximately half of Denmark’s electric bike market, positioning itself as a leader during a transformative period in the sector.
Despite several competitors facing severe financial difficulties, including near-bankruptcies and market exits, Lundqvist is confident in Promovec’s stability and growth prospects. Speaking from the company’s headquarters in northern Aarhus to Danish media Ehherv, he highlighted the adaptability and resilience of Promovec in an evolving market.
“If you go into our battery production, you will not find a single product that we produced a year ago. Right now, there is a drastic change taking place, and it is of course a challenge, but I think we manage to adapt, and right now we are in a really good place,” Lundqvist remarked.
Market dynamics and industry challenges
The electric bike market has seen a significant shift, with many new players entering the arena, leading to increased competition. However, the industry’s landscape is also marked by financial instability, as evidenced by the struggles of companies like Mate Bike and Strøm Cykler. This instability extends beyond Denmark, affecting markets in Austria and Switzerland as well.
Promovec has not been immune to these challenges, experiencing a notable dip in financial profits from DKK 32 million and 25 million in the fiscal years 2020/2021 and 2021/2022, respectively, to DKK 5.6 million in the last fiscal year. Nevertheless, Lundqvist attributes this decline to the exceptional market conditions during the COVID-19 pandemic and remains confident in the company’s current position.
“The market has stabilised at a slightly lower level, which is more reminiscent of the pre-pandemic era, and we are still in a strong position due to our brand and our mobility,” he explained.
Innovative beginnings and strategic growth
Promovec’s journey began with a different focus. Initially envisioned as a provider of assistive devices for seniors, inspired by Lundqvist’s wife’s work as a physiotherapist, the company pivoted to electric bikes after recognizing a market opportunity. This shift proved prescient, with electric bikes evolving from niche products for those with physical challenges to mainstream transportation options embraced by a broad demographic.
“Back in the mid-noughties, the electric bike was quite new, and it was something you only used if you had a bad knee, a bad hip or were otherwise challenged on your physique. This is not the case at all today, when the electric bike is a means of transport for everyone,” Lundqvist noted.
Commitment to Danish production and sustainability
Promovec’s success is partly attributed to its commitment to Danish production. Lundqvist believes that owning the technology and controlling the production process is crucial for both quality and sustainability. This approach aligns with broader societal trends towards health, green transition, and adherence to ESG (Environmental, Social, and Governance) legislation.
“It has turned out that our business speaks well to different trends in society. For example, the development in health – i.e. this thing about transporting yourself by bicycle rather than by car, says Jesper Lundqvist and continues “But also within the green transition and most recently with ESG legislation, which in my world is linked to technology in the sense that technology you have to own..”
Future vision: quality over quantity
Looking ahead, Lundqvist envisions a future where Promovec’s products stand out for their durability and quality, challenging the prevailing buy-and-throw-away culture. This mission, while potentially reducing the volume of sales, aligns with his broader goal of contributing to a more sustainable world.
“I would rather that we disrupt the market than others do, and that we then have to adapt. It can be our contribution to a better world if we can succeed in convincing a fraction of consumers that it is worth paying the extra for quality,” he asserted.
Promovec’s nomination for the prestigious EY Entrepreneur Of The Year award underscores its success and commitment to growth, quality, and sustainability. As the company continues to innovate and expand, Lundqvist’s leadership and vision will undoubtedly shape its trajectory in the dynamic electric bike industry.
