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<b>Sweden 2005:</b> Polarization of the Bike Market

Sales & Trends

MAARSSEN, The Netherlands – There are few markets in the world where good or bad weather has more influence on bike sales than Sweden. A spring with bad and cold weather is never taken back in terms of sold bikes and bike accessories. Nonetheless the annual sales in Sweden tends to be stable around 430-450.000 […]

<b>Sweden 2005:</b> Polarization of the Bike Market

MAARSSEN, The Netherlands – There are few markets in the world where good or bad weather has more influence on bike sales than Sweden. A spring with bad and cold weather is never taken back in terms of sold bikes and bike accessories. Nonetheless the annual sales in Sweden tends to be stable around 430-450.000 units per year.

In 2005 the Swedes could enjoy skiing well into Easter and the bike shops had to endure slow sales. And although the summer in Sweden was one of the best ever the market never got back what is lost in spring.
“Yes, bad weather just shortens the season and creates a struggle between the bike market and other markets,” says Robert Sumberesi, CEO of Cycleurope Sweden, who claims they have sold 120,000 units in 2006, more or less the same figure as in 2005.

Bicycle Market in Sweden (in units)

 
2003
2004
2005
Production
70,000
125,000
125,000
Import
385,000
434,000
463,356
Export
35,000
65,000
99,374
Domestic deliveries
420,000
430,000
440,000

Prices

“We had a bad start this year but managed to get it back, especially with this extremely nice autumn we can see that our bikes still attract buyers,” says Kjell Sture, CEO of Samuelsson & Co, one of the most successfully players on the Swedish market with their cult brand Skeppshult. Kjell Sture is reluctant to reveal any figures but admits they had ‘a good season’ and that the increase is around ‘two digits’. He also sees a big difference in how the market behaves; Stockholm versus the rest of Sweden: “Stockholm is a market apart; there we can see a full year sales cycle. In the rest of the country; March trough June.

The typical tourist places like the beach cities are also different: in summer we sell a good number of bikes over a longer period,” explains Kjell Sture. Skeppshult has focused on customers who are willing to pay for it. “One of our better selling bikes this season is priced at € 420 and our range runs up to around € 1,100. 

Basically it is the same bike but with  more expensive components. We have taken the idea from the car industry, were they market ‘platforms’ or a basic car with no extras, to draw people into the shop. Our Nova Komfort is such a model that has boosted our sales. The bike shops have to decide what to aim for, low price or higher priced bikes with high quality,” says Kjell Sture. And this is a clear trend. All the image brands in Sweden have sold well this season although they are relatively highly priced.

Scott Svenska AB claim that they have managed to sell bikes at a higher price than last year, averaging around € 800 for an adult bike and € 420 for a junior bike. Trek have increased their market share thanks to ‘standard bikes’ – in Sweden this means bikes with mudguards and a luggage carrier. 

Duells, who distribute Trek and Gary Fisher in Sweden claim they sell around 10,500 Trek bikes. “We have increased our average price and thanks to our Trek hybrid bikes we will sell around 40% more bikes this year, and also at a higher price,” says Joakim Malm at Duells. The average price for a Cannondale sold in Sweden is € 933 and Nishiki, who sold 15% more bikes in 2006 than in 2005, has managed to increase the price with 40% over the last five years. In short, they sell more bikes at a higher price – can it be better?

Competition

But, the Swedish market suffers from competition – chains selling household electrics for instance offer a fridge, and you get a free bike with it; that’s a typical newspaper ad text as read in Sweden’s biggest morning paper. It’s estimated that this form of distributing bikes reaches figures of 30,000 units per year, thus competing with the bike dealers. Some claim that this is an opportunity to sell ‘real bikes’ when the fridge buyers discover that the free bike is  useless. Others consider it as lost units.

2006 trends were ‘retro’ bikes, dirt bikes and high comfort bikes. Road bikes are rising in popularity. The mountainbike has come to a stop, but regionally it is still very popular – especially in Dalarna, a place famous for its stubborn people. They still buy a good number of mountain bikes. Sales are stimulated by marathon races and club activities. The market is ever more clearly developing into two distinct segments:  low price bikes and shops,  branded quality bikes, service and prices accordingly.

The losers find themselves in the middle – average quality, and not cheap either. “Yes, the cheap bikes tend to become cheaper and the expensive bikes more expensive,” says Robert Sumberesi, “the way I see it, your brand has to stand up for something and if you can’t market that, then you will have a problem .”

Another important trend for the bike business in Sweden is the health trend – people are getting more and more aware that they have to take care of themselves. But the market has to give people what they ask for: Comfort and ease “You have to give the market something really new instead of a new derailleur, otherwise you can’t sell,” says Björn Hagerud, Scott Svenska MD.

Channels

An estimated 50% of the bikes are sold via IBD shops – the rest through low price chains as supermarkets, gas stations and outlets that sell cheap bikes in the box. The market is estimated to be worth around 1.7 billion SEK (€ 186 million)– including P&A. 30,000 units are given away by big electronic chains like Elgiganten, SIBA, Onoff, etc. A sad Swedish fact: According to a study, when a biker has to see a hospital for care, in one in ten cases it is due to a technical defect of the bike!

Source: Production, Domestic Deliveries: estimates 2005 Import, Export figures: Eurostat

 

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