OSLO, Norway – Approximately 400,000 bicycles will be sold in Norway in 2011. Considering Norway is a country of less than 5 million people; with an average temperature of 4.5° Celsius and 5 winter months per year, this is quite a high volume.
Key brands are reporting a drastic increase in preorders of 29er mountain bike models. Many of the best high end bicycle retailers are reporting that they are ordering more 29er versions of high-end mountain bikes than 26” for the coming season. Merida offered two twenty-niner models in 2011. For 2012 there are nine models in their range at price points ranging from €850, up to the expensive BIG Nine models developed for the demanding customer, as well as the Multivan Merida Team.
29er bicycles provide big possibilities for the bicycle industry to achieve “new sales” of bicycles to consumers who already have a 26” in the garage. 29ers are the bicycle industry’s “new carving ski”… meaning that the ski industry introduced and sold new carving skis to consumers who already had a ski because there was a NEW product on the market.
In the electronics industry the flat screen was introduced and ‘everybody’ replaced their old TV. The bicycle retailers seem to have a very strong belief 29ers will be a BIG trend for 2012, but it is very important to realize most consumers don’t know the 29er products yet, except for high end customers. This means importers and retailers will have to convince consumers why they should invest in a new bike with bigger wheels.
The majority of bicycles sold in Norway are medium priced MTBs and hybrids. However, end users are discovering the sport of cycling more and more. Another important trend is that cycling is developing more as a lifestyle-product/sport. This trend is increasing the need for different bikes for different riding purposes and leads to people buying more than one bicycle as their interests might include road, cross-country, Cyclo Cross, and cycling to work. Winning results from racers such as Evald Boasson Hagen and World Champions Thor Hushovd (Road) and Gunn-Rita Dahle Flesjå (MTB) are also boosting interest in cycling sports.
Cycling events such as the Birkebeinerrittet, Grenserittet, Nordsjørittet and Trondheim Oslo are very popular and recruit thousands of new cyclists every year. The latest edition of the most popular MTB marathon race in Norway, Birkebeinerrittet, sold all 20,000 entry tickets less than one minute after they went on sale.
In Norway infrastructure to support cycling for transportation is not very well developed. Unfortunately, road conditions for urban cycling are close to miserable in most major cities. This results in only 6% of all Norwegians riding their bike every day to work or school. Norway is one of the richest countries in the world, but at the same time a developing country with respect to adapting conditions for cycling.
In both Sweden and Denmark the percentage of people who cycle to work/school is much higher than in Norway.13% of the Swedes and 17% of the Danes use their bicycle for daily transportation. The Norway government’s willingness to facilitate better bike paths will be important for the future growth of the cycling market in the country.
E-bikes break trough
Currently electric bikes are almost not available in Norway. None of the big selling brands has put products out there to boost this segment and the market is eager to see how the sales of electric bikes will evolve in the future, particularly with regards to the environmental focus. Even though Norway, with its hills and mountains is a perfect market for e-bikes, electric bicycles haven’t caught on as a trend so far. Finally, some major brands are introducing e-bikes for 2012.
Imports (no anti-dumping)
The official bureau of statistics reports that the total import of bicycles during the first nine months of 2011 was 431,000 bicycles. There is no bicycle production in Norway. Norway is not a member of the European Union. This means bike imports from China are not hampered by high anti-dumping duties. All bikes are imported. The main supplier is China – as the largest supplier of bicycles to Norway both in units imported as well as in value imported.
No other country in the world has a structure with such strong retail chains dominating the distribution channels. There are 9 chains counting for 90 % of the turnover in sporting goods business. High competition fosters increased volume and decreased margins among most importers and players in the market.
The Gresvig group, which includes G-Sport and Intersport stores, accounts for more than 36% of the turnover in the sports industry. Gresvig has several of its own bicycle brands, including Diamant, Nakamura, and Air. In fall 2010, Gresvig started up a new superstore concept called ‘G MAX’ (large stores from 2,000 to 6,000 square meters) to meet the competition from XXL who has been the ‘winner’ in retail sales previous years.
The second largest player on this market, Sport 1, also has their own brands – Xeed and Jamis in addition to international brands in their stores.
XXL is the fastest growing retail chain in Norwegian sports industry. XXL has 15 large stores in the largest cities of Norway as well as four newly-opened stores in Sweden. XXL also have their own brand called Spokes, in addition to international brands in their stores.
The strongest brands are becoming stronger and the weak players weaker. There are three major bicycle distributors in the market. Gresvig (Diamant/Nakamura), Stians Sport AS (Merida), and Cycleurope (DBS). They account for close to 50% of the sales in the market. Diamant/Nakamura is sold exclusively in G-Sport and Intersport stores. Stians Sport AS has expanded their 25 year-old business selling Merida in Norway to also include Sweden, with Merida Sverige AB as a Swedish Merida distributor.