The Netherlands 2009: E-Bike Dictates Dutch Market

AMSTERDAM, the Netherlands – The Dutch bicycle market showed itself to be “economic crisis proof” last year. The Dutch keep on cycling, regardless of the economic situation. As a result a limited number of bikes purchases were postponed, resulting in a growing turnover in spare parts and more bicycle repairs in the workshops. On top of that, the Dutch IBD’s have taken full advantage of the booming e-Bike sales which haven’t shown even the slightest sign of being affected by the economic downturn.

 Number of new bikes sold in the Netherlands (x 1,000 units)

The latest sales statistics for 2009 indicate a minor decline of 4.2% in units sold, from 1,337,000 bicycles in 2008 to 1,281,000 in 2009. According to the industry & dealer associations RAI Vereniging and BOVAG, who collected the data together with the Dutch statistics agency and GfK Panel Services Benelux, the value of the bicycle market keeps on rising and had a value of € 950 million in 2009, an increase of 2.6% compared with 2008.

This total value has been going up as a result of quality improvements in the bikes sold and the huge popularity of e-Bikes. The total production of bicycles in the Netherland showed more positive results than retail sales. Dutch bike manufacturers built 1.2 million units in 2009, a growth of 6.3%.

Foothold

Policymakers often use the Dutch market as an example of how rapidly e-Bike sales can develop. In the Netherlands electric bikes have gained a strong foothold. Between 2006 and 2009 the market quadrupled, from 40,000 to 153,000 units last year. This means one out of every eight bicycles sold in the Netherlands is now an e-Bike, which is on average three times more expensive than a regular bicycle. Thanks to their growing popularity in 2009 electric bike sales accounted for one-third of the turnover of the whole bike sector in the Netherlands, an increase of 25% related to 2008.

The success of the e-Bike is also reflected on the average price of all bikes sold by IBD’s. This retail price has grown at the same pace as number of units from € 709 in 2007 by 21.4% to € 861 in 2009. On average the IBDs (roughly 2,500 shops) have a market share of 74%, but the e-Bike market is almost completely handled by the IBDs. According to GfK Panel Services Benelux, they sell 97% of all electric bikes in the Netherlands.

This large market share is not a coincidence. Contrasting the growing e-Bike sales at the IBDs, mass market retailers saw a decline of 45% in units. According to GfK Panel Services Benelux this is not a short term development, but a clear trend for the years ahead. The growing awareness among the consumers of the product makes them more demanding.

In the early days of the e-Bike low-end models bought via mass market retailers did not always satisfy the consumer’s expectation of the quality of the product. Many early adopters, attracted by low prices, were disappointed by the limited range, high weight, and poor design. Today the consumer realizes that to buy a quality e-Bike he has to find a reliable seller and  pay more than a minimum amount of money. For many consumers this reliable partner in bicycles is still and foremost the IBD.

Categories

However, not everybody is riding an e-Bike in the Netherlands. The popularity of electric bikes comes at the expense of the city bike category, which saw a sales decline of 7% last year. Despite that, this segment remains the largest in the Netherlands, with a market share of 49% or 628,000 units in 2009. The Hybrid or Trekking segment remained stable at 16% or 205,000 units.

Not only does the e-Bike trend have a negative effect on the sales of other bike segments, it also influences the price. The price category between € 700 and € 900, once the most important in size, dropped last year in market share from 25% in 2008 to only 18% in 2009. You can only conclude from these figures that a number of people, who used to spend more than average on the acquisition of a new bike, today use their money on an e-Bike. The next price category, € 900 and higher, grew from 16% in 2008 to 19% last year, making it the second largest category.

The pricing on the Dutch bicycle market is in a somewhat unusual situation. The cheapest and the more expensive categories have become the biggest. 29% of all bikes sold have a retail price of less than € 300 and 19% have a price tag of more than € 900. All categories in between are smaller.

Apparently Dutch consumers make a clear distinction in price when they buy a bicycle. It is either a cheap one for those who have no affinity with bicycles and regard their new acquisition as a must, or they can’t afford to spend more money. The top of the market meanwhile is inhabited by people who prefer quality and want to ride more expensive bikes.

The only other segment of some importance is kids’ bikes. The number of units sold declined only 1% to 166,500 units. On the Dutch market mountain bikes have never been sold a lot for sports use but mainly as an image bike. The number of units sold last year declined to a minimum and this category has even been taken from the official statistics. It is now part of the category ‘others’, together with road race, recumbent, and folding bikes.

Government

Although the Dutch cycling facilities are already praised all over the world, the government continues to invest in cycling paths to promote cycling and parking facilities to limit bicycle theft. In the past ten years the cycling road network has been expanded by 11% to approximately 18,000 kilometres while the fleet grew by 7% to some 18 million bicycles.

Altogether the Dutch cycled 14.9 billion kilometres last year, 12% more than ten years ago. For local and national policymakers the bicycle has an important role for short distance transportation. More and more the bicycle is put on the agenda by cycling advocacy groups and industry organizations, to fulfil targets of environment, health care, and accessibility of city centres. All these issues favour the bicycle as a solution.

New bike sales in price ranges/market share (in %) 

New bike sales by category (in %)

 Where bikes are bought

Source: BOVAG, RAI