Folding Bicycles and increased safety features to meet the demand of urban commuters has seen sales in the bicycle industry surge across major metropolises worldwide.
By Viraj Desai
Cycles have been an integral form of transportation since time immemorial. While motor bikes are popular among commuters to combat peak traffic, the increasing awareness of health benefits and environmentally-conscious consumers are signaling a comeback of the bicycle industry.
Intensifying traffic congestion and surging fuel costs as well as greater Government support for the adoption of bicycles as a primary mode of transport with development of dedicated cycling infrastructure is all helping to boost the bicycle industry.
Growth from the Asia Pacific region is projected to drive higher sales of bicycles while North America and Europe may continue to contribute significantly in terms of global revenue. According to Research firm Technavio, it is estimated that the total available market of bicycles will surge to USD 44 billion, registering a CAGR of 4 percent.
Some of the major bicycle brands that appear to be performing well globally include: Hero Cycles Limited, Derby Cycle Corporation, Fuji Corporation, Shimano Giant Manufacturing Co. Ltd, Cannondale Corp, Atlas Group, BSA Limited, Hercules Cycles, Accell Group N.V, Dorel Industries Inc and Merida Industry Co. Ltd.
The introduction of high-tech accessories as well as greater demand for safety gear by urban consumers has spiked as the number of vehicles on the roads have increased. Sales in bicycle lights have increased too. For example, manufacturer Helios Bars launched smart bicycle handlebars with built-in LED headlights that can be retro-fitted to any bicycle. The introduction of laser front lights can project light up to 15 metres ahead, making it ideal for night-time riding.
The advent of the folding bicycle has also seen a major uptake in sales across Europe and North America, as working professionals commute to offices without parking spaces.
It is estimated that global Folding Electric Bicycle market was USD 120 million in 2017. It may double to USD 210 million by 2025, registering a CAGR of 7.5 percent in the next seven years. Leading consumers are projected to be from the US, Canada and Mexico in North America while Europe will see greater interest from France, Germany, UK, Italy, Russia and Turkey. The Asia-Pacific region has also seen substantial growth, with foldable bike sales increasing in China, India, Indonesia, Thailand, Malaysia, Vietnam, Korea and Japan. Some major brands who are doing it well include Brompton, SUNRA, XDS, BODO, Slane, U-WINFLY and Birdie Electric.
In India, up to 300 million people walk up to six kilometres to work or school on a daily basis. If 10 percent of consumers bought bicycles, it would increase GDP by 1%.
Currently, India has just 67 bicycles per 1,000 households vis-à-vis 800 in Europe. The continent leads by example with cycle friendly lanes and higher adoption rates. India produced just 1.65 crore bicycles in 2017-18 vis-à-vis 1.25 crore a decade back. India, as the second largest manufacturer after China, is behind the dragon nation on cost efficiency. China sells bicycles at just 3 per cent of its annual per capita income whereas bicycle prices in India sit around 15 per cent of the average income per capita. Furthermore, 95 of every 100 households own a bicycle in China, while only 46 do so in India.
India’s Hero Cycles, one of the largest bicycle manufacturers globally, produces over 5.2 million bicycles a year. The company is looking to increase its global market share from 5 to 8 percent in the next few years; manufacturing 9 million bicycles per annum. Hero Cycles currently exports to over 70 countries. Its quick growth has been mainly through a succession of mergers and acquisitions.
On the other hand, Taiwan, has also seen a boom in bicycle manufacturing with production valued at USD 200 million, an increase of 74 percent, with almost 95 percent marked for export. Taiwan’s bicycles accounted for 23 percent of all EU imports. Giant Manufacturing, the bike-making behemoth, is the largest manufacturer in Taiwan.
Electric bicycles are also gaining plenty of consumer interest, with Yamaha Motor Corporation leading the pack. However, the recent trade tariffs introduced by the US Trump Administration will affect imports of over USD 1 billion cycling products. The dependence of the US on Chinese bicycles is almost at 95 percent, meaning it is likely to hit both jobs in China and affect affordability for US consumers.
Germany ranks number one in terms of sales and production and is widely considered to be the friendliest for road cyclists. Interestingly Poland is a major employer in bicycle industry followed by Germany and Italy.
France sold 3 million bicycles with a turnover of over a billion euros. The parts and accessories segment total sales accounted for almost 800 million euros.
Germany saw sales of 4 million bicycles in 2016 with a revenue of about 2.6 billion euros whereas its component industry sales was over 5 billion euros.
Bike-sharing, which was touted to be a major market segment is witnessing a slowdown. Recently, Tier one bike-sharing brand Ofo was sued by manufacturer Shanghai Phoenix Bicycles for over USD10 million. While the original scope included the purchase of five million bikes, only two million bikes were purchased.
Bike-sharing is very popular in Singapore, with OFO, Mobike and oBike competing with local bike-hire companies; the latter which attracts the tourist market. Consumer use of bike-sharing brands tends to be localized, with many commuters using bike-sharing as the means to travel between home and public transport.