The Rise of Taiwan’s Homegrown Bicycle Brands: How Giant and Merida Conquered the World

Everyone knows that Taiwan is the world’s most important bicycle manufacturing base. But how Taiwan transformed itself from an “OEM island” into a nation home to two world-class bicycle brands — Giant and Merida — is a remarkable story of industrial upgrading and brand building.

The Origins of Taiwan’s Bicycle Industry

The 1970s: The Beginning of the OEM Era

The birth of Taiwan’s bicycle industry almost perfectly tracks the takeoff of Taiwan’s economy.

From the late 1960s through the early 1970s, Taiwanese manufacturers began taking OEM (Original Equipment Manufacturer) orders from Japanese and American brands. Low labor costs combined with steadily improving manufacturing capability quickly made Taiwan a key global bicycle production center.

Key characteristics of this period:

• Taiwanese manufacturers were almost entirely building bicycles for foreign brands
• There was virtually no brand identity of their own
• Margins were thin and competition was fierce

Crisis and Opportunity: The 1970s Oil Crisis

The 1973 oil crisis unexpectedly accelerated the transformation of Taiwan’s bicycle industry.

The crisis caused bicycle demand to surge across Europe and the United States (cycling was cheaper than driving), and orders for Taiwanese manufacturers exploded, prompting factories to expand rapidly. At the same time, this period made Taiwanese manufacturers acutely aware of a fragile truth: pure OEM manufacturing is vulnerable — when market demand fades, orders vanish just as quickly.

Giant: From Contract Factory to World’s Number One

The Founding Story (1972)

Giant was founded by King Liu in Dali, Taichung. The company started out making children’s bicycles before quickly shifting into OEM manufacturing for foreign brands.

The Key Turning Point: The 1981 Partnership with Schwinn

In 1981, Giant began manufacturing for Schwinn, the largest bicycle brand in the United States. At its peak, Giant’s OEM output accounted for more than 70% of Schwinn’s global sales. This partnership allowed Giant to rapidly absorb high-quality bicycle manufacturing techniques and supply chain management expertise.

The Brand Decision: Launching the Giant Brand in 1981

At the height of its OEM business, King Liu made a decision that seemed contradictory at the time: continue OEM manufacturing while simultaneously launching Giant’s own branded bicycles.

This decision met with fierce opposition from many clients at the time, who had no wish to see their contract manufacturer become a competitor. King Liu held firm.

Schwinn’s Collapse: Giant’s Opportunity

In 1992, Schwinn filed for bankruptcy due to financial troubles, and Giant lost overnight the client that had accounted for 70% of its OEM volume.

Rather than dealing a fatal blow, this crisis became the catalyst that pushed Giant fully toward becoming an independent brand. Freed from dependence on its largest customer, Giant threw its full weight behind developing its own brand.

Giant’s Global Strategy

In 1986, Giant established its first overseas subsidiary in the Netherlands, marking the start of its global expansion.

The core pillars of its globalization strategy:

• Not merely exporting products, but building sales networks and brand awareness in each country
• Establishing its own design and R&D centers rather than relying on outside design
• Sponsoring professional racing to boost brand visibility

Giant’s Investment in Professional Cycling:
In the 1990s, Giant began sponsoring professional cycling teams. Taiwanese riders appeared on the roads of the Tour de France, carrying Giant’s brand image onto the world’s most prestigious cycling stage.

Giant Today

Today, Giant is one of the largest bicycle manufacturers in the world:

• Factories across Taiwan, mainland China, and the Netherlands
• Subsidiaries or dealers in approximately 50 countries
• Annual shipments exceeding 6 million units
• Its brand portfolio includes both Giant and Liv (a women’s cycling brand)

Merida: A Global Footprint Launched from Lukang

The Founding Story (1972)

Merida was founded by Michael Tseng in Lukang, Changhua County, at almost exactly the same time as Giant, and it too started out as an OEM manufacturer.

Merida’s most famous client was the German brand Centurion, and it later became an important OEM partner for Specialized as well.

Merida’s Special Relationship with Centurion:
In 1987, Merida took an equity stake in Centurion, becoming a shareholder in the German bicycle brand — an extraordinarily bold cross-border acquisition move for its time.

Merida’s European Strategy

Unlike Giant’s globally dispersed approach, Merida focused early on the European market, particularly German-speaking countries (Germany, Austria, Switzerland).

Building the brand in Europe:

• Establishing a strong sales and marketing team in Germany
• Sponsoring German road cycling teams
• Deeply embedding itself in German cycling culture (Germany is one of Europe’s largest bicycle markets)

Merida’s Investment in Professional Cycling

Merida’s biggest milestone in professional cycling was becoming the bicycle supplier for Team Bahrain Victorious (and, years earlier, Team Bora-Hansgrohe), putting Merida bikes on display at the Tour de France and other top-tier races.

Merida Today

Today, Merida ranks among the top five bicycle manufacturers in the world:

• Annual shipments exceeding 2 million units
• Distribution networks in roughly 80 countries
• Germany remains its most important overseas market

Taiwan Excellence and the Bicycle Industry

The overall success of Taiwan’s bicycle industry isn’t just about Giant and Merida — it reflects the upgrading of an entire supply chain and industrial cluster.

The bicycle industry cluster centered around Changhua County (the Taichung–Changhua area) includes:

• Frame manufacturers
• Component manufacturers (such as FSA and Promax)
• Aluminum alloy and carbon fiber material suppliers
• Precision machining factories

This dense, tightly integrated supply chain gives Taiwan’s bicycle production efficiency an edge that’s unmatched anywhere in the world.

The A-Team: A Model of Collaboration in Taiwan’s Bicycle Industry

One of the unique success factors behind Taiwan’s bicycle industry is the “A-Team” — an industry alliance made up of Taiwan’s leading bicycle and component manufacturers.

The core philosophy of the A-Team: collaboration among competitors that lifts the entire industry together.

A-Team Achievements:

• Jointly establishing technical standards
• Showcasing the collective strength of Taiwan’s bicycle industry
• Offering international buyers a one-stop supply chain solution

Challenges Facing Taiwan’s Bicycle Industry

Success has brought new challenges along with it:

Competition from Mainland China:
As manufacturing capabilities in mainland China have improved, the low-price bicycle market has faced intense competition. Taiwanese manufacturers have responded by continuing to move upmarket into higher-value segments.

Advancing Carbon Fiber Technology:
Carbon fiber bicycles represent the most important battleground for Taiwanese manufacturers’ upgrading efforts, and refining carbon fiber craftsmanship is key to maintaining a competitive edge.

The Direct-to-Consumer (DTC) Model:
The rise of e-commerce has enabled brands to sell directly to consumers, and Taiwanese manufacturers are now learning to adapt to this new business model.

Conclusion

The story of Giant and Merida is one of the most successful examples of manufacturing upgrading in Taiwan.

The journey from contract factories to world-class brands wasn’t just a commercial success — it embodies the Taiwanese commitment to quality, innovation, and long-term vision.

The next time you’re riding a Giant or a Merida, remember the journey that carried it to the world, starting from Lukang and Dali.

Further Reading

• Taiwan’s Bicycle Industry: How GIANT and MERIDA Conquered the World
• The History of Taiwan’s Bicycle Industry: How Giant and Merida Became World Brands
• Taiwan’s Place on the International Cycling Stage: How Giant and Merida Changed Global Cycling
• Taiwan’s Cycling Culture on the World Stage: Giant, Merida, and Global Influence