Newegg Sees Right Time for E-Bikes

Newegg Commerce Inc., an online retailer known for its assortment of PC hardware and consumer electronics, is dabbling in e-bike sales.
The move is part of company’s growth strategy “to expand globally and into new related businesses,” according to documents filed with Securities and Exchange Commission.

Newegg’s initial offering includes 26 models, with prices ranging from $539 to $1,899. The City of Industry-based retailer’s marketing pitch is focusing on rising gas prices and how electric bikes could substitute for a car.

“With rising gas prices, electric bikes are environmentally friendly and are quickly becoming a great option for local daily transportation and commuting to work or school,” Michael Plaksin, vice president of brand growth and development for Newegg, said in a statement. “We developed a detailed buying guide as a starting point to help a customer make an informed decision to purchase their first e-bike. The guide provides information so customers can consider making an e-bike part of their active lifestyle.”

While timing of the e-bike launch coincided well with the recent sticker shock at the gas pump, Newegg’s product expansion has been in the works for at least a year.
“We believe that a key strategic advantage we enjoy is our broad selection of technology products, and we have focused on growing our product selection over time,” the company said in documents filed with SEC. “For example, as of Sept. 30, 2021, we offered over 38.6 million SKUs across over 1,800 categories, which we believe makes us one of the top online shopping destinations for tech consumers. Newegg will continue to grow our direct sales and marketplace businesses by increasing our product assortment and introducing new product categories, such as 3D printers, Internet of Things devices, automotive (auto parts and accessories), cellphones, wearables (fitness trackers and smart watches), and sporting goods (E-bikes, treadmills, yoga accessories, etc.).”

Newegg sources electronics from more than 2,000 brands, including Asus, Hewlett Packard Enterprise Co., Lenovo, Dell, Acer, Microsoft Corp., Samsung, LG, Gigabyte and Westinghouse. It has about 40 million registered customers, 32.5% of which have purchased at least one item from Newegg in the past 12 months, with an average order value of $301.

The company also caters to business clients, such as health care providers, educational institutions and government agencies, and various small and mid-sized businesses. In addition to direct sales, the company has set up Newegg Marketplace, where third-party sellers offer their products to the company’s customers and pay commissions.

“We believe the Marketplace model provides us with a number of benefits,” the company said in documents filed with the SEC.” “As compared with direct sales, the use of the Marketplace model contributes to our working capital and cash flow as there is no need to maintain inventory. Additionally, as the number of sellers and brands on our Newegg Marketplace continues to expand, the choices available to customers also should grow, generating strong momentum for our continued growth.”


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