Gogoro rides to Berlin

As you are reading this article, Gogoro electric scooters developed in Taiwan are 9,000 kilometers away cruising the streets of Berlin, a city with a population of 3.5 million that plays host to more than 12 million tourists per year. It is the Bosch Group, the world's largest supplier of automotive components with 70 billion euros in annual revenue, which has paved the way for Taiwan's signature electric scooter to enter the heart of Europe.

On Aug. 3 this year, Gogoro announced its plan to cooperate with Coup Mobility, a wholly owned subsidiary of Bosch, to launch e-scooter sharing services in Berlin. This project is similar in many ways to Taiwan's YouBike sharing system.

To begin with, around 200 e-scooters will be available in Berlin. This system is expected to spread to dozens of major European cities in the following years.

This is the best performance since [Gogoro] took to the road a year ago, said Horace Luke, co-founder and CEO of Gogoro, cheerfully and with a laugh when talking to Business Weekly.

Bosch's new partner in consumer markets

Following Gogoro's initial launch in Taiwan in July 2015, less than 400 new units were sold per month due to high prices and an unclear brand image. Ruentex Group Chairman Samuel Yin, a major investor, sent Hsu Advertising CEO Hsu I-ming to Gogoro as an advisor and a firefighter. When Hsu asked harsh questions in meetings, Luke responded with tears.

In July this year, Gogoro sold around 1,300 scooters. The threefold increase from initial sales meant the company was nearing its monthly break-even point. Now, the total sales of more than 10,000 scooters have made Gogoro the bestselling e-scooter brand in Taiwan. Its operation bases have extended from Taipei to Hsinchu and Taichung in northern and central Taiwan, and now Berlin in Europe. Luke is happy about it. No more tears now, he said jokingly.

Compared with the nearly 8,000 bicycles in Taiwan's YouBike system, the 200 e-scooters in Berlin are not a very impressive number. Still, for both Bosch and Gogoro, this experiment is just the beginning of a search for new markets.

The joint project is led by Bosch's mobility solutions sector that raked in more than 40 billion euros in revenue last year, the highest among all the company's sections but still representing a 9 percent drop from the previous year. In search of new growth momentum, Bosch's mobility solutions sector, previously concentrating on business-to-business markets, made its first move into the business-to-customer market.

Grace Lei, chief operations officer at Gogoro, recalled that when Bosch talked to them about the project in November 2015 at the Milan Motorcycle Show, she and the other officers of the company were hesitant. Luke considered that Bosch had never supplied any parts to Gogoro and was not an ideal partner.

Last December, Bosch's officers again talked to Luke in Paris during the Conference of the Parties to the U.N. Framework Convention on Climate Change. After completing its survey and comparison of global e-scooter suppliers, Bosch remained interested in working with Gogoro. The deal was finalized in March this year.

There are a number of e-scooter suppliers around the world, from Europe to China and Southeast Asia, and some these companies have been Bosch's clients. Gogoro was chosen because its products and systems are in tune with Bosch's plans for e-scooter sharing services.

Scooter design in sync with sharing services

Luke used an iPhone to see the differences between Bosch's Coup e-scooter sharing service and Taiwan's YouBike system. The Coup scooters, searched and reserved through smartphones, can be taken from and dropped off anywhere in Berlin instead of at certain specific locations.

Luke's company began with a rental business model in mind, therefore Gogoro scooters can be incorporated into Bosch's e-scooter sharing system in Europe with hardly any modifications.

According to Luke, Gogoro's initial attributes, such as being able to start the scooters with smartphones and setting the maximum speed, make the vehicles well-suited for a public sharing system.

Even more to Gogoro's credit, during the past year in Taiwan, the company has collected considerable data about how its e-scooters are actually used.

As the Bosch Group is making its first moves into the end-user business with the e-scooter sharing service, the company still has many things to learn. This being the case, Bosch will send a team onto the streets of Berlin every day to conduct maintenance work.

Using smartphones to monitor and maintain

Lei told Bosch that the Gogoro system for remote control and maintenance work can inform the company when taillights are broken or tires are flat. We told Bosch that smartphones can act as doctors for scooters. On the one hand, the operation costs can be reduced because fewer people need to be dispatched to perform maintenance; on the other hand, security can be enhanced through computer monitoring and fewer irregularities will occur due to human error.

Bosch had always intended to purchase parts and accessories from Gogoro for future operations and maintenance needs. Gogoro was aware, however, that the German firm was looking to purchase far more than it would actually require. During negotiations, therefore, Gogoro suggested Bosch buy fewer items. By doing so, Gogoro made less money but gained trust. The initial loss of tens of thousands of euros will likely turn into millions in gains thanks to expanded business cooperation.

Using data collected from its operations in Taiwan, Gogoro has assisted in matters such as where to place scooters and battery swap stations, as well as how to set maximum speeds.

Luke says he is inspired by the partnership between his firm and Bosch. Perhaps you don't have to do everything by yourself, Luke said. Cooperating with partners can create a bigger pie, just a small piece of which can be much more rewarding than you could've expected. For Gogoro, this is a perfect way to dip into the European market.

For this project, Bosch is responsible for establishing the overall framework, using its financial and human resources in such efforts as buying scooters from Gogoro, installing recharging stations and performing maintenance. On Gogoro's end, it is responsible for manufacturing the scooters and battery swap systems, as well as big data analysis.

Even more significantly, along with spread of this project to other European cities, Bosch's investment will introduce Gogoro to a whole new audience, and the data that is collected will help Gogoro make marketing decisions in Europe.

If we find the scooters are more popular in a particular city, then that city will be a good business target, Luke said.

Working in Europe and beyond

While Luke is busy in cooperating with Bosch on their European project, Gogoro continues its marketing efforts in Taiwan. Due to limited resources and efforts to enter foreign markets, Gogoro's business development has slowed down at home after reaching Hsinchu and Miaoli counties in northern Taiwan.

Hsu I-ming is urging Luke to make further progress in central Taiwan's Taichung City, which saw the third highest motorcycle sales across the country during the first half of 2016. Hsu considers e-scooters a good solution to traffic problems in Taichung. Meanwhile, the city offers the nation's highest subsidies for the purchase of e-scooters up to around NT$34,000 from the city government and the Cabinet-level Environmental Protection Administration. For the emerging e-scooter industry, which could use assistance from the government, Taichung is a market that Gogoro cannot ignore.

Due to a strong performance in Taichung in June and July this year, Gogoro saw its sales exceed 10,000 scooters by its one-year anniversary on July 25.

Despite being the most well-funded and publicized startup in Taiwan in recent years, Gogoro has seen its fair share of stagnant sales, low morale and self-doubt. For the past year's performance, Luke gives himself a B+ grading.

He flew from Singapore to Taiwan to talk to Business Weekly, and left Taiwan immediately after the interview. Unable to hide his excitement when speaking, he would from time to time cover his mouth as if keeping a secret. There are so many projects that I just can't talk about yet, Luke said.

Gogoro is riding into the European market, making full use of its cooperative relationship with the 100-year-old German business giant. Luke is putting into practice what he said in an interview with Business Weekly nine months ago: Taiwanese people are very good at weighing up things, he said. If I can survive here, then I can survive anywhere else in the world.

Source: Ministry of Foreign Affairs, Republic of China (Taiwan)