The once-booming bicycle industry is hitting the brakes after a pandemic-induced surge in sales led to steep discounting and market turmoil. At a recent trade fair in Stuttgart, Germany, manufacturers and retailers slashed prices by up to 30 per cent in a desperate attempt to clear excess stock and cope with falling demand.
Gone are the exciting days of 2020-2022 when the collapse of Covid sent people scrambling for bikes as outdoor recreation and alternative transport take off. Companies such as custom e-bike maker Electrolyte saw orders jump by 50 per cent and faced months-long backlogs due to supply chain disruptions.
Today, things have changed. Electrolyte’s sales fell 15 per cent last year, mirroring a similar trend across the industry.
“The market has changed a lot,” says Burkhard Stork, chairman of ZIV, the German bicycle industry association. In Germany alone, sales of conventional bikes plummeted by 20 per cent in the first half of 2023, and sales of e-bikes fell by 12 per cent. Stork predicts that 2024 will be a “tough” year, with fewer new models hitting the market as manufacturers concentrate on selling existing stock.
The pandemic frenzy has led to excess inventory as manufacturers ramp up production to meet seemingly endless demand. Now, retailers and manufacturers are stuck with mountains of slow-selling bikes and have to resort to steep discounting to stay afloat. Online retailer Gutacker uses an algorithm that automatically adjusts prices based on what competitors are offering, with discounts of up to 30 per cent on traditional bikes and 20 per cent on e-bikes.
Swiss e-bike giant Flyer has also cut prices by 10-15 per cent in recent months, and the sector is already seeing casualties. Dutch e-bike darling VanMoof, dubbed the “e-bike Tesla”, has filed for bankruptcy, highlighting the vulnerability of young companies in a recession. German online giant Internetstores is also in financial trouble, leading to the bankruptcy of its main bike retail sites Fahrrad.de and Probikeshop, among others.
Despite the gloomy outlook, industry experts remain cautiously optimistic, with Manuel Marsilio of CONEBI describing this as a temporary period of adjustment that will take around a year to clear out inventories. He expects sales to rebound by the end of 2024 or early 2025, noting that the market is still larger than it was before the outbreak.
The bike industry may be shifting gears, but the love of cycling remains. While pedal mania may have peaked, the future of cycling continues, albeit at a slightly slower pace.