by As the cycling frenzy that was fueled by the pandemic begins to fade, Europe’s bike industry is feeling the repercussions. At a recent bicycle trade fair in Stuttgart, steep discounts on new models were visible, a clear indication of the industry’s turmoil and declining demand.
In the midst of COVID-related shutdowns in 2020 and 2021, there was a surge in bicycle sales as people sought outdoor recreation and alternatives to public transportation. Companies like Electrolyte, a German manufacturer of customized electric bikes, experienced a 50 percent increase in orders during the pandemic. However, the current market climate tells a different story.
Factors such as the ongoing war between Russia and Ukraine and the resulting high inflation have led consumers to think twice before making bike purchases. Electrolyte saw a 15 percent decline in sales last year, reflecting the changing dynamics in the market.
Germany, Europe’s largest economy, witnessed a 20 percent decline in sales of conventional bicycles during the first five months of 2023 compared to the same period in the previous year. Burkhard Stork, the president of the German bicycle industry association ZIV, anticipates a challenging year for the industry in 2024. Manufacturers are expected to reduce the number of new launches and focus on extending the lifespan of existing models due to unsold inventory.
The industry’s optimism during the pandemic led to increased orders to stay ahead of potential supply chain disruptions. However, the current decrease in demand has resulted in excess stock, forcing manufacturers and retailers to resort to discounts. Andreas Gutacker, a bicycle store manager, shared that his company uses a repricing algorithm that scans competitors’ offers and automatically adjusts prices accordingly. This has led to price drops of up to 20 percent for e-bikes and even 30 percent for conventional bicycles.
Flyer, a Swiss e-bike maker, has also lowered prices by 10 to 15 percent over the past six months in response to the market slump. The industry has already witnessed casualties, such as the well-known Dutch e-bike manufacturer VanMoof, which filed for bankruptcy last year. Similarly, German group Internetstores, the parent company of Fahrrad.de and Probikeshop, faced insolvency due to financial troubles.
Despite the challenges, industry experts remain cautiously optimistic about the future. Manuel Marsilio of the Confederation of the European Bicycle Industry (CONEBI) believes that the current period is a transition phase that will take about a year to clear the excess stock. Marsilio predicts a strong resurgence in sales by the end of 2024 or the beginning of 2025, emphasizing that the market is still larger than it was in 2019 before the pandemic.
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- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
