Background
This report focused on the recommendations for Worldwide eBikes, a Qatar-based company, to expand into the Australian market. First, the market opportunity was explored using various metrics. The analysis demonstrated that expansion into the Australian e-bike market may be associated with significant challenges, including high competition, reduced short-term interest in e-bikes, and the global political situation. However, long-term investment in expansion to Australia may be feasible due to the growing market in the country, favourable political and social factors, and the long-term trend of increasing interest in e-bikes.
Second, the report focused on the benefits of person-centered research, stating that it is crucial for targeting relevant audiences, increasing customer engagement, and improving operational efficiency. Third, it was determined that establishing a social media presence and search engine marketing would be a top priority for Worldwide eBikes if it decided to expand to Australia. Finally, four key digital marketing campaign success measures were recommended, including online traffic, conversion rates, return on investment, and customer retention rate.
Market Opportunity
The e-bikes market in Australia is currently booming for a wide variety of reasons. In 2021, the e-bike market in Australia was valued at $16.9 million, and it is expected to grow rapidly at a CAGR of 6% over the next five years, from 2022 to 2027 (Research & Markets, 2022). As a result, the total size of the e-bike market is expected to reach $55.6 million in 2027 (Research & Markets, 2022).
However, even though the e-bikes market in Australia is promising, it is crucial to conduct a holistic analysis of the e-marketing opportunity of e-bikes in Australia before expansion. This section provides an in-depth analysis of marketing opportunities using environmental analysis techniques. This report uses PESTLE analysis, Porter’s Five Forces analysis, and trends to evaluate the opportunity.
PESTLE Analysis
PESTLE analysis is a frequently used framework that helps to analyse the external environment. The framework analyzes political, economic, social, technological, legal, and environmental (ecological) factors that affect an industry or company. The primary benefit of the technique is that it provides strategic managers with a list of environmental influences that can be either a threat or an opportunity for a company’s development (Kotler et al., 2019). The present section utilizes the PESTLE framework to analyze the external environment of the e-bike market.
Political
The political environment appears to be unfavourable for two central reasons. On the one hand, the Russia-Ukraine conflict disrupted international supply chains, which may be a significant concern for international expansion opportunities (Reuters, 2022). On the other hand, political criticism of Qatar, particularly in relation to the 2022 FIFA World Cup, is growing, negatively affecting consumers’ opinions of Qatari products (Albert et al., 2022). However, the global political environment supports environmentally friendly mobility solutions, as stated in the United Nations’ 17 Sustainable Development Goals (Boar, Bastida, and Marimon, 2020).
Economic
The product will be launched in unfavourable economic conditions. The war in Ukraine and the COVID-19 pandemic are expected to lead the world to a significant economic recession (Ventresca, 2022). As a result, the buying ability of potential customers may decrease, leading to a less favorable start of sales (Ventresca, 2022). Therefore, the global economic environment is likely to hurt the product launch. However, it is worth noting that the e-bike market in Australia is expected to grow significantly, which may be considered an economic trend that supports business expansion to Australia.
Social
The social environment has two tendencies. On the one hand, environmental concerns are growing in Australia (IBISWorld, 2022). This implies that people in Australia are more likely to adopt e-mobility, which is a favourable factor for the expansion to Australia. On the other hand, social criticism of Qatar may hinder the expansion of Qatari firms in Australia (Albert et al., 2022). Thus, social trends have varying impacts on the e-marketing opportunities for e-bikes in Australia. The social environment is also friendly, driven by growing online purchase trends and increased social media use in Australia, particularly during the pandemic (Jarman et al., 2020).
Technological
The rapid development of e-bike technology in terms of motors, chargers, and batteries has a positive impact on the opportunity of marketing e-bikes in Australia, as technology supports the reduction of production costs and an increase in the efficiency of motors, chargers, and batteries (Edge, Goodfield, and Dean, 2020). Moreover, technological breakthroughs in digital marketing allow rapid expansion in the country (Kotler et al., 2019).
Legal
The legal environment for e-bikes in Australia is one of the friendliest in the world (Dirodi, 2022). The legal base presupposes urban planning with special bike roads (Dirodi, 2022). Moreover, the country’s legal base for using e-bikes is well established (Dirodi, 2022).
Ecological
The ecological environment in Australia is favourable due to growing environmental concern in society and among politicians (Boar, Bastida, and Marimon, 2020; IBISWorld, 2022).
In summary, the PESTLE analysis revealed that the opportunity to market e-bikes in the country is a matter of controversy. On the one hand, the environment is favorable due to the growth of the market, a well-established legal framework, growing environmental concerns, technological advancements, increasing social media usage, and rising online purchasing activity in Australia. On the other hand, economic decline, political problems, and specific social trends may negatively impact the marketing opportunities for e-bikes in the country.
Porter’s Five Forces
Porter’s Five Forces analysis is a commonly used method for assessing the strengths and weaknesses associated with a company’s industry (Bruijl, 2018). The framework aims to assess five aspects of the external environment, including the threat of new entrants, the threat of substitution, the bargaining power of suppliers, the bargaining power of buyers, and competitive rivalry (Bruijl, 2018). The results of the analysis are provided below.
Threat of New Entrants – Medium
The entry barrier for the e-bike industry in Australia is moderate, and the growing market is not the most attractive in the country (Research & Markets, 2022). Thus, the threat of new entrants is medium.
Threat of Substitution – High
Numerous mobility products may substitute e-bikes. These include bicycles, motorbikes, private cars, public transport, and electric scooters. The alternatives are readily available in Australia at various prices, which implies that the threat of substitution is high.
Bargaining Power of Suppliers – Low
Numerous suppliers can provide the required parts for assembling the product, so their bargaining power is low.
Competitive Rivalry – High
The competitive rivalry in the Australian e-bike industry is high. Numerous online and retail stores sell different types of e-bikes, such as Bicycle Super Store, Electric Bike Super Store, Bikes Online, Electric Bikes Brisbane, and Volition Premium Electric Bike. The brands of bikes available in the country include Cleverley, Dyson, Electra, eTourer, Focus, Gazelle, Giant, Kalkhoff, Leitner, Lekker, Merida, Michael Blast, Norco, Reef, Reid, Riese & Müller, Specialized, TEBCO, Trek, and XDS.
Bargaining Power of Buyers – High
Numerous product substitutions exist, as well as competitors that provide similar products. Moreover, the pricing policies and quality of substitutes and competitors are diverse, making it challenging to encourage buyers to purchase a specific product. Therefore, buyers’ bargaining power is high.
Further Analysis
To further evaluate the marketing opportunity of electric bikes online in Australia, it is crucial to analyse the search trends for electric bikes. Google Trends shows that, although the overall interest trend in e-bikes in Australia is growing, interest in e-bikes decreased in 2022 compared to 2021 (see Figure 1 below). Thus, even though the e-bike industry in Australia is expected to grow, the overall interest in e-bikes decreased in 2022, which may be a cause for concern.
Persona Research
Persona research, also known as customer profiling, is widely used in both traditional and digital marketing (Dodson, 2016). Persona research is crucial in digital marketing for several key reasons. The primary benefit of persona research is gaining insight into the target population, enabling the tailoring of marketing campaigns specifically for different consumer types (Visser, Berry, and Sikkenga, 2019). This section discusses the benefits of persona research before expanding the e-bikes business to a new location, with the ultimate goal of explaining how knowing the person will assist in launching the business in Australia. While there are numerous benefits associated with customer profiling, this section focuses only on the three most important advantages of the process.
Targeting Relevant Audiences
Digital marketing allows companies to select the audience to which the product is marketed, which provides a large pool of opportunities for companies to address particular audiences (Visser, Berry, and Sikkenga, 2019). Therefore, it is crucial to know who purchases the product to tailor the value proposition to the different segments of customers (Visser, Berry, and Sikkenga, 2019). For instance, some customers value speed, some may value energy efficiency, while others want an exquisite design for e-bikes. While one product can meet the needs of multiple segments of customers, the message needs to be tailored for every segment of customers separately.
Apart from increasing sales, targeting relevant audiences may also help tailor communications based on the customers’ specific interests, which is expected to increase brand engagement and improve customer experience (Dodson, 2016). Thus, customer profiling helps target relevant audiences in digital marketing.
Increased Customer Engagement
Persona research helps to understand the customers’ preferences, likes, and dislikes (Dodson, 2016). Additionally, customer profiling helps to understand the motives and goals of different customer segments, allowing for the design of customer engagement activities (Dodson, 2016). Customer engagement allows the customer to build strong emotional connections to the brand (Visser, Berry, and Sikkenga, 2019).
As a result, the customers become more loyal to the brand, which makes them recurrent (Visser, Berry, and Sikkenga, 2019). Additionally, increased engagement leads to quicker reactions to customers’ problems, which improves brand image and helps to develop customer loyalty (Dodson, 2016). Higher customer loyalty leads to increased conversion rates, a decline in marketing-related costs, and improved returns on investment (Dodson, 2016).
Improved Efficiency of Operations
Customer profiling generates large amounts of data that increase the accuracy of demand forecasts (Visser, Berry, and Sikkenga, 2019). Demand forecasts are crucial for optimising inventory, production, and supply chain management costs, improving operations efficiency, and decreasing manufacturing and operating costs (Visser, Berry, and Sikkenga, 2019). Additionally, customer profiling minimizes reverse logistics, as customers’ problems are resolved quickly (Dodson, 2016). As a result, the supply chain costs decrease even further.
Thus, persona research will allow the expansion to Australia to improve short-term and long-term sales and customer engagement. Moreover, customer profiling will allow the company to optimise costs. At first, sales may be scarce, and the company will not want to over-invest in inventory. At the same time, not delivering the first order in time will be associated with significant brand reputation drops, slowing down sales significantly. Personnel research will allow the establishment of an effective supply chain in a new place.
Short-Term Market Impact
This section aims to identify the two most effective strategies for digital marketing of e-bikes in Australia. These recommendations are based on online research of scholarly and professional literature. Additionally, the recommendations are provided assuming that Worldwide eBikes already has an official website in English, as it is the global language of business. Since Worldwide eBikes already has a website in English, creating a separate website for Australia is not a top priority. However, if Worldwide eBikes does not yet have a website, it is crucial to create one, as without one, customers may question the legitimacy of the business (Visser, Berry, and Sikkenga, 2019).
Social Media Pages
The priority of Worldwide eBikes should be to create official social media pages in Australia, including Facebook, Instagram, and Twitter. Social media use is growing fast in Australia (Jarman et al., 2020). The COVID-19 pandemic accelerated the digitisation of businesses, which increased online activity (Jarman et al., 2020). Moreover, people in Australia increased their social media use during the pandemic due to the inability to spend their time outside with friends and family (Jarman et al., 2020). Today, even after the COVID-19 pandemic has decreased in influence, social media penetration continues to grow in the country (Statista, 2022). Figure 2 below demonstrates social media market penetration trends since 2015.
Creating social media pages and engaging in social media marketing is crucial for any business, as it encourages brand awareness and engagement (Zimmerman & Ng, 2017). Social media needs to be seen as a platform for the company to tell its story and why it is doing what it is doing (Zimmerman & Ng, 2017). Additionally, social media channels help to generate and nurture leads, which increases sales and conversion rates (Zimmerman & Ng, 2017). Social media pages can also be used for user-generated content, building a community around the brand, and informing customers about the latest news. An example of how social media can inform customers and create new leads is provided in Figure 3 below.
Search Engine Marketing
Digital marketing of a new product is also impossible without investing in search engine optimisation (SEO) and advertising in search engines. SEO is a crucial technique that helps to make a website more visible in the search engine results (Visser, Berry, and Sikkenga, 2019). Increased visibility generates traffic, which, in turn, creates new leads and increased sales.
Assuming that Worldwide eBikes already has a website, it is not optimised for Australian users. In other words, while the website may be visible to customers from other countries, it is unlikely to appear in search engine results for users from Australia. Therefore, SEO is essential for increasing sales.
According to Hollingsworth (2021), search engines are the most significant contributors to the traffic of websites. Therefore, it is crucial to use all the opportunities to promote the website of Worldwide eBikes in Australia through search engines. Besides SEO, digital advertising is essential for generating traffic through search engines (Visser, Berry, and Sikkenga, 2019).
Thus, Worldwide Bikes should invest in online advertising of its products through search engines. In particular, focusing on Google as the primary traffic source is recommended. According to Hollingsworth (2021), Google had more than 92% of the market share in 2021, with Bing and Yahoo! being the closest competitors with 2.29% and 1.52% in market shares, correspondingly. Figure 4 below demonstrates the market share of search engines.
When advertising the company, it is crucial to focus on keywords such as ‘eBikes Australia’, ‘electric bikes Australia’, ‘buy eBike’, etc. The keywords may also be tailored to different cities in Australia, such as Sydney, Melbourne, Brisbane, Perth, Adelaide, and Canberra.
Fiscal Oversight
This section describes four key performance indicators (KPIs) that will help determine which marketing activities should be modified or discontinued. We discuss these KPIs below.
Online Traffic
This is the most straightforward metric that can be used to determine which of the channels creates the most traffic on the company’s official website. The sources of traffic will demonstrate which of the advertised words were the most effective and if the social media pages generate adequate amounts of traffic for the company’s website (Visser, Berry, and Sikkenga, 2019). If some advertised words in search engines generate relatively small traffic, they can be discontinued.
Conversion Rates
While measuring online traffic is essential, it is also crucial to determine the quality of traffic. One of the central metrics for determining the quality of traffic is conversion rates from different sources of traffic (Visser, Berry, and Sikkenga, 2019). The conversion rate is the percentage of people who have completed a purchase based on the total number of website visitors (Visser, Berry, and Sikkenga, 2019). If the conversion rates of a traffic source are very low, the investment in the source may be decreased or discontinued.
Return on Investment
It is a crucial metric that demonstrates whether the sales generated from a source are worth the money spent on attracting a customer (Visser, Berry, and Sikkenga, 2019). One method to calculate returns on investment is to create a timeline for different social media promotions and sales amounts. If sales have high correlations with investment in a promotion, it should be considered adequate and continued. Otherwise, the promotion should be modified or discontinued.
Returning Customer Count
Since serving a returning customer is cheaper than attracting a new customer, it is crucial to determine the percentage of customers who return within one year. Accounting for returning customers is also crucial to determining which advertising method is the most effective for attracting returning customers.
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