Finland 2010: Market Grows in Two Directions

TAMPERE, Finland – The Finnish bicycle market is growing at the bottom and top end of the market. That leaves fears in the industry that mid-priced retailers don’t benefit from the growing bike sales. Sales are up about 10% this year which was helped by the most beautiful summer in history.

The total bicycle market in Finland will grow to around 330,000 units in 2011, an increase of roughly 10% compared to 2010. The figures given in the tables below are estimates based on the custom statistics and sales numbers reported by the suppliers. As the season is practically over by September, the data is very close to the final figures, which will be available sometime in March – April 2012.

Imports in January – August grew 10%. Domestic manufacturing grew too. Helkama Velox Oy moved the production of their successful Jopo-model from Asia back to Finland. This switch to a Finnish origin boosted the sales of the model and the total amount of manufacturing.

Two groups of consumers

In the light of total numbers the market seems to be healthy and positive. The picture changes somewhat however, when one looks behind the numbers. Finland has been and still is a country, where a bicycle is a means of transportation. People ride every day to work, shopping, school, and hobbies. The bike models are practical for everyday use, models with hub gears, hub brakes and full accessories, costing between € 300 – € 600. But this season many retailers noted customers were passing up the ordinary city bikes and choosing other alternatives.

More and more people chose a cheaper bike model. They paid no attention to the brand and were less critical to quality level and technical specifications in a quest for the lowest price. Another group of consumers however, upgraded and chose new models with more benefits, with retailers reporting increasing sales of light hybrids, road bikes and cyclocross-models.

The retailers are naturally happy with the latter group as revenues increase quickly when buyers of € 400 city bikes choose instead a hybrid costing € 900. The number of quality and performance-oriented consumers is increasing. They are more interested in cycling as a sport and are willing to invest more into their hobby. That can be seen in the demand of road bikes. But the average price of bikes sold is still low compared with the consumption in the old cycling countries.

Who will sell the bikes?

The new trend in consumption has also brought changes in bicycle retailing. The really cheap bicycles are being sold by mass markets, where the price does not include any personal advice and service. A growing number of consumers are ready to buy a bike, the same way they buy a bottle of milk, buying it “off the shelf” and taking it to the cashier. The middle segment of bikes, now losing its market share, is mainly sold by sporting goods stores.

These shops are important part of distribution. The winter is long in Finland and the bicycle sales season only last for about six – eight months at most. Sports shops alternate their sales goods according to the season, with bikes in summer and skis in winter. The specialized bike-only shops not surprisingly have a slow time in winter, but try to make up for the cold months with good sales in the summer and marketing their expertise with sports bikes.

The healthy sporting goods retailers are important for the future of bicycle business, especially if the current mass market trend loses momentum. The bike business meanwhile, with its parts and clothing sales, is an important product group for a sporting goods retailer, helping stabilize the annual load of work and capital.

Promising outlook for 2012

The suppliers have been two months on the road to collect orders for 2012. Retail sales were weak in the spring months, but rebounded nicely in July – September. There are no surplus stocks, so the retailers are ready to book orders. For now, cycling remains popular and has a good image in Finland. All signs point to a good future for the sport.