Electric bike giant Aima released an announcement that shook the industry.

On the evening of October 10, Aima Technology announced that it had received notice from the family members of Zhang Jian, the company's actual controller, chairman, and general manager, that he had received a notice on October 9, 2024, issued by the Chengde Municipal Supervisory Committee, stating that Zhang Jian had been detained and placed under investigation.

The announcement also stated that all other directors, supervisors, and senior managers of the company were performing their duties normally, that there had been no change in the company's control, that the board of directors was functioning normally, that production and operation management were proceeding as usual, and that the aforementioned matters would not significantly impact the company's normal production and operation.

In fact, the outside world is also concerned about Zhang Jian's further situation and its impact on the company. According to Xinhua Finance, repeated calls to Aima Technology's securities department after the incident went unanswered.

How significant will the investigation of Aima's founder Zhang Jian impact the company and the industry?

Firstly, Zhang Jian is the actual controller, chairman, and general manager of Aima Technology. According to the company's 2024 semi-annual report, he holds a 68.78% stake. His wife, Duan Hua, serves as the vice chairman and deputy general manager of Aima Technology, and his daughter, Zhang Gege, serves as a director of the company.

In other words, Zhang Jian is the soul of Aima, not only holding absolute controlling interest in the company's equity but also wielding significant influence.

Image source: Aima Electric Bike Official Account

Within the industry, Aima electric bikes are a widely recognized brand.

From 2010 to 2016, its sales volume consistently ranked first in the industry.

Currently, electric bicycles, like electric vehicles, are divided into traditional and new forces. The traditional forces include Yadea, Aima, Lvyuan, Xinri, and Tailg, while the new forces primarily consist of Ninebot and Niu.

Based on the first half of 2024 revenue figures, Yadea and Aima surpassed 10 billion yuan, while Ninebot reached 6.6 billion yuan. The top three rankings are Yadea, Aima, and Ninebot.

In other words, although Aima still lags behind Yadea, it firmly holds the second position in the industry.

After years of growth during the industry's golden period, the transition period for replacement has ended in various regions, and industry regulation has become stricter. The domestic market has gradually entered a phase of competition for existing market share.

Will Zhang Jian's situation trigger a domino effect on the industry landscape?

At the same time, does a rapidly expanding family business need to consider trimming its family ties to reduce personal dependence and operational risks?

01

The Path to Wealth

In March of this year, Zhang Jian and his daughter Zhang Gege appeared on the 2024 Hurun Rich List with a wealth of 16.5 billion yuan, ranking 1577th on the 2024 Hurun Global Rich List.

Zhang Gege was born in 1993, just as her father Zhang Jian was making his first significant financial gains.

According to media reports, Zhang Jian was born in Shangqiu, a small third-tier city, and came from a very ordinary family background.

At the age of 21, Zhang Jian abandoned his secure job at a state-owned enterprise to embark on a difficult entrepreneurial journey.

In 1990, Zhang Jian began working in the bicycle retail industry and, within just three years, became a leader in the Shangqiu region. The bike shop he founded, "Shengtianyu," was the precursor to today's Aima Group.

Subsequently, Zhang Jian was not content with the status quo and shifted his focus to the bicycle wholesale industry.

By 1999, his "Shengtianyu" bike shops had spread throughout China, making him a leader in the industry.

Image source: Aima Electric Bike Official Account

Later, having heard that Tianjin was known as the "Capital of Chinese Bicycles," Zhang Jian and his wife, Duan Hua, traveled north to establish Taimei Auto Co., Ltd. in Tianjin, while leaving the management of their hometown bike shops to Zhang Jian's father.

In 2004, the introduction of the "motorcycle ban" had a significant impact on the motorcycle market. Zhang Jian keenly identified a business opportunity and ventured into the electric two-wheeled vehicle industry.

In the same year, Yadea transitioned from motorcycle manufacturing, while Tailg and Xiaodao were established successively.

In 2006, Zhang Jian's "Aima" brand electric bikes began production, although this business opportunity had already been recognized by many others.

Due to low technical barriers, the number of domestic electric bicycle manufacturers surged, and by 2009, there were over 2,600 electric bicycle manufacturers holding production licenses.

02

China's Premier Electric Bike Family

In 2009, Taimei Auto Co., Ltd. officially changed its name to Tianjin Aima Technology. At this time, Zhang Jian began planning how to establish the brand.

That year, Zhang Jian invested 30 million yuan to sign Jay Chou, the king of Mandopop, as the brand ambassador.

This was an astronomical amount for the electric bike industry, and the endorsement fee exceeded half of Aima's net profit at the time, setting a new industry record.

The results were immediate. Jay Chou's strong appeal quickly boosted Aima's brand image.

According to media reports, in 2010, relying on the star endorsement, Aima increased its sales to 2.2 million units, surpassing Xinri to become the industry leader and maintaining this position until 2016 through a combination of "precision marketing" and "low-end product positioning."

Zhang Jian has been deeply involved in the electric bicycle industry for many years, and some media outlets have even referred to the Zhang family as "China's Premier Electric Bike Family."

Image source: Aima Electric Bike Weibo

According to reports, after withdrawing in August 2005, Zhang Jian's brother-in-law Zhang Yanfeng and sister Zhang Ru both ventured out on their own.

Zhang Yanfeng and his wife founded the Xiaoniao Electric Bike brand in Tianjin, which now ranks among the top in the two-wheeled vehicle market share and has long dominated the three-wheeled vehicle market.

Zhang Ru stayed in her hometown and took over her father's responsibilities, operating Baifeng Auto, which had become China's largest bicycle and electric bike wholesaler by 2003.

In 2011, Zhang Ru established Henan Bubuxian Power Technology Co., Ltd., whose products cover various types of tricycles, new energy electric cars, and special-purpose electric vehicles.

Subsequently, in 2012, Zhang Jian began planning for an initial public offering (IPO). Despite high sales volumes, Aima's path to going public was fraught with challenges.

First, Zhang Jian encountered opposition from his former partner Gu Xinjian, who threatened to expose Aima's tax evasion in its Wuxi branch unless Zhang Jian paid him money.

Zhang Jian decisively chose to self-report to the tax authorities, leading to the collapse of the IPO process.

In 2018, Aima's second IPO attempt was rejected by the China Securities Regulatory Commission after rigorous inquiries.

In 2019, Aima quickly resubmitted its application but was again canceled due to a patent infringement lawsuit just before the listing hearing.

Due to these setbacks, despite a smooth start and high market share, Aima's final IPO was in July 2021, lagging behind peers such as Yadea, Xinri, and even the emerging brands Niu and Ninebot.

03

Industry Challenges Looming

What is the current performance of Aima Technology?

In fact, based on financial reports, Aima Technology's performance is impressive.

In 2023, Aima Technology sold over 10.74 million electric bicycles, electric two-wheeled motorcycles, and electric tricycles, generating revenue of 21.036 billion yuan and net profit of 1.881 billion yuan for the year.

In the first half of 2024, Aima Technology generated revenue of 10.591 billion yuan, an increase of 3.66% year-on-year, and net profit of 951 million yuan, an increase of 6.24% year-on-year.

Image source: Aima Technology Semi-Annual Report

Aima is expected to release its third-quarter report for 2024 on October 26.

However, the current electric bicycle industry is not particularly optimistic.

For instance, industry leader Yadea saw its sales decline by 22.26% year-on-year in the first half of 2024, with net profit down 12.9% and revenue down 15.4%, marking the largest revenue decline in nearly nine years.

The slowdown of the industry leader indicates what?

In the view of many analysts, the electric bicycle industry will face challenges this year. On the one hand, the industry's high-growth period has ended, leading to a slowdown. On the other hand, due to frequent electric bicycle accidents, regulation across regions will become stricter.

In early May, iResearch released the "China Electric Two-Wheeler Industry Research Report 2024," stating that the "New National Standard" replacement wave has passed, and domestic sales of electric two-wheelers are expected to reach 50 million units in 2024, a year-on-year decline of 9.1%.

As the second-largest player in the industry, Aima's financial performance is better than Yadea's, but it faces the same industry pressures.

Where are the opportunities for electric bicycles?

Expanding overseas can alleviate overcapacity to some extent and open up new markets, leading to new growth.

Domestically, the industry will witness a more brutal battle for existing market share, where competition will focus on products, R&D, talent, and corporate stability.

For Aima, the future of Zhang Jian remains to be seen.