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<b>Belgium 2008: </b>E-Bikes Big Winner in Belgium

Sales & Trends

GAND, Belgium – The Belgian market does not seem to suffer much from the economic crisis. 2008 was generally a good year, particularly for high-end racing bikes, mountain bikes and for electric bikes in particular. One declining segment appears to be the low- and middle-end for city use. At the same time, the government is trying to boost the use of bicycles for commuting by means of fiscal incentives. And, prompted by alleged unfair competition from social economy activities, the Belgian bicycle dealers are once again trying to form a trade association.

<b>Belgium 2008: </b>E-Bikes Big Winner in Belgium

GAND, Belgium – The Belgian market does not seem to suffer much from the economic crisis. 2008 was generally a good year, particularly for high-end racing bikes, mountain bikes and for electric bikes in particular. One declining segment appears to be the low- and middle-end for city use. At the same time, the government is trying to boost the use of bicycles for commuting by means of fiscal incentives. And, prompted by alleged unfair competition from social economy activities, the Belgian bicycle dealers are once again trying to form a trade association.

Bicycles: Export Top Five Belgium

Country Number Evolution Average value per bicycle in euro Evolution
  2007 2008   2007 2008  
France 587,724 608,498 +3.5% 84.73 109.11 +28.8%
Germany 73,95 121,042 +64.5% 415.97 37.07 -91.0%
Spain 70,777 83,405 +17.8% 175.84 178.51 +1.5%
Italy 47,542 69,292 +45.7% 235.33 192.21 -18.3%
Holland 64,92 58,92 -9.2% 135.97 181.29 +33.3%
Total Belgian export 960,204 1,121,974 +16.8% 144.33 156.44 +8.4%

Source: National Bank of Belgium

In 2009, over 1.52 million bicycles were imported. That is 5.4% more than in 2007. Their average value was € 141.55, which is almost 30% higher than the previous year. Exports also increased, with some17% for a total of almost 1.22 million. The average value was € 156.44, 8.4% higher than the year before. The Belgian import and export statistics however say nothing about the home market. A large part of the bicycles in the statistics are just in transit, with Decathlon, Giant and Scott having distribution centres in the country.

Peculiar results

For the 3rd year in a row, imports from main supplier Taiwan shrunk. After a 27% decrease in 2006, and –13.4% in 2007, Taiwan lost another 6% last year. With that, the recovery of average value also continued: 9.8% to almost € 160. France took over second position from Sri Lanka with a 5% volume increase and a spectacular 110% increase in value. All suppliers of low-end bicycles suffered considerable losses last year, except Bangladesh that made a 75% leap and got into 10th position.

The import statistics show two very peculiar results. The average value of Dutch import increased with almost 82% to a staggering € 523.81. This is more than probably due to electric bikes being imported from Holland under the customs code 87120030 or 87120080. Normally electric bikes fall under the customs code 871190. Another surprise: the volume of Dutch imports decreased with more than 30%, which could be the result of some transit flow ending.

The second peculiar figure is the German import volume. In 2008, just under 210,000 bicycles were imported into Belgium. That is almost 7 times more than the 2007 import volume. We asked several parties for an explanation. Since nobody had a clue, this may be a statistical mistake.

Passionate hobbyists

Since the statistics tell us nothing about the Belgian market, we asked a few main figures about their 2008 results. Surprisingly enough, the overall conclusion is rather divergent. Johan Huygens, who assembles Granville bikes and distributes Scott in Belgium, reported an absolute status quo for Granville and 7% more turnover for Scott. The latter growth was due to a serious increase in the sales of carbon bicycles. As for Granville, the average value increased in all segments. Remarkably enough, in the 4th quarter of 2008, the economic crisis mainly hit the low and middle-end city bikes, whereas mountain bikes and racing bikes, especially the high-end, enjoyed considerable growth.

Eddy Van Den Berghe, owner of Oxford, reported a 6.5% increase in bike sales in 2008. “It was a very strange year. Normally, we make about 70% of our turnover in the first half of the year. In 2008, we only started to eliminate the backlog compared with 2007 as of June. Towards the end of the year, we did not suffer from the economic crisis at all. As for this year, we expected to sell cheaper bikes. The first 3 months have shown an opposite trend. The high-end bikes are the most successful.”

With Huygens, Van Den Berghe confirmed the success of racing and mountain bikes last year: “Through my second company, VDB-parts, we distribute racing and mountain bikes and bicycle components. We thought 2007 was an exceptional year with 18% increase. We never believed that in 2008 we would get anywhere near that result. Still, to our amazement, we booked another 12% progress. In my view, the public for racing and mountain bikes consists of passionate hobbyists, who only want the best, regardless of price.” As to the rumours about the sale of his company, Van Den Berghe commented: “These are probably fuelled by the appointment of Geert Verniers as managing director of both companies. Nevertheless, they are not for sale and I have no intention selling them.”

Social economy activities

Nico Lauwaert, who owns a bicycle shop in Beveren, near Antwerp, labeled 2008 as “the best year in his 14-year-old career.” He continues: “In the summer, there was no end to it. People didn’t seem to care about prices anymore. As a result, the average price of our bikes increased from € 450 to € 500. As of November, we started to feel the impact of the economic crisis. That trend continues this year with sales being down and repairs up.” Lauwaert confirms the success of racing bikes. He believes that there effectively is a ‘Boonen’ effect (Tom Boonen is like Lance Armstrong having a great effect on local bike slaes), which mainly draws young people and women into the sport.

The main reason for interviewing Lauwaert is because he is the moving force behind an initiative to establish a new dealer association in Belgium. With the disappearance of Velo Pro Europe last year, Belgian bicycle dealers were left without an organization to defend their interests. A meeting, attended by some 30 dealers resulted in a 10 points’ program including among other things further training for dealers, improving the relationship with suppliers, awareness raising and promotion campaigns, improvement of product safety, better agreements with suppliers on warranty and the fight against unfair competition. This last issue actually brought the dealers together.

In Belgium, there are a growing number of “social economy” activities that aim at job creation for underprivileged in the bicycle business. The so-called “Bike Points” for instance provide for parking facilities in train stations, combined with cycle hire and repair. Because these initiatives are subsidized, ‘regular’ bike dealers tend to consider them unfair competition. In recent years, their displeasure and protest has gradually gone louder and louder. Nico Lauwaert: “Our mission is to promote cooperation among ‘real’ bicycle dealers who focus on quality. The final decision on the form of our organization will be taken very soon now.”

Introverted business

In recent years, the number of Belgian dealers has fallen dramatically. Ten years ago, it was still estimated at + 2,000, today only at 1,100 to 1,200 of which 800 in the Flemish part. The Belgian population is just over 10 million, whereas the bicycle market is estimated at 4 to 500,000 a year.

The Belgian bicycle business is extremely introverted. Both suppliers and dealers treat anybody and anything from beyond the borders with the greatest caution. That explains why so few dealers are a member of a buying group or a shop formula. Only recently, ZEG and Biretco have managed to slightly turn the tide. Biretco has 60 Belgian members of which 17 Profile shops, whereas the ZEG logo hangs out in 36 shops. As a result, some 8% of Belgian dealers are now part of a retail organization.

Ad Roest, responsible for the development of Biretco in Belgium, is very satisfied with the results so far. He admits that they had to somewhat gear their formula towards the Belgian market: “We now produce specific Belgian folders, with a typically Belgian offer. There are some differences, for instance Belgians buy more derailleur bikes than Dutch.” Roest also confirms the Belgian main suppliers’ refusal to cooperate with Biretco: “They allow Dutch suppliers such as Juncker, Kruitbosch and others to grow in Belgium. At the same time however, the market is not expanding. So, they are bound to loose market share.”

Gerard Mimpen, within ZEG responsible for the Benelux market, is just as satisfied with the results of his Belgian customers. Last year, the 36 shops, of which only 3 are in the Walloon area, have increased their turnover by 10%. What’s more, quite a number of them are refurbishing their shop or building a new one. Nevertheless, a ZEG member in Holland still books 3 times as much turnover as a Belgian member. According to Mimpen, the absence of the Belgian main suppliers plays a major role.

“Our Belgian members would very much like us to cooperate with Belgian suppliers, but for us that is difficult. We could only use that cooperation for the 36 Belgian shops, which is just a fraction of our total network of more than 900 dealers.” Belgium only represents 12 to 13% of the ZEG turnover in the Benelux. Mimpen distributes his time accordingly: “If I would have more time for acquisition in Belgium, then I am sure that the number of ZEG-shops would rapidly increase. Most of the current members have contacted me themselves. They have become interested by talking to another Belgian member.”

Forerunner

All our interlocutors were unanimous on one issue: the success of the electric bicycle. One of the most popular brands is Sparta. Barry Hoksbergen of Sparta’s sales’ department confirms that in Belgium since 2007 the brand grows 10 to 15% a year, with a +15% prognosis for this year. With that, sales of electric bikes increase more than other types of bikes. So far, there has been no effect from the economic crisis. In Hoksbergen’s view the target group for electric bikes is generally well-off. In all recessions, durable consumer goods remain successful. They consider an electric bike such a durable good, a sound investment.

Eddy Van Den Berghe admits that at first he did not believe in the potential of electric bikes. Whereas now he thinks that in the long term they could attain a 15 to 20% market share. Granville has only launched the sale of electric bikes this year. According to Johan Huygens they have already sold half of their projection. Nico Lauwaerts belongs to the first generation of electric bike dealers. After a few years however he quit because profit margins were relatively small, competition grew and the quality of the bikes was not really progressing. “Some 3 or 4 years ago, we decided to get back into electric bikes. Last year, we doubled our sales compared with 2007. I expect that the new fiscal incentives will further benefit the development of this market.”

To date, Belgians who commute by bike can receive € 0.15 per kilometer. The Belgian Parliament has now decided to increase that tax-free allowance to € 0.20 and to index it. Research by the Belgian mobility department has shown that if a company pays the fee, cycling increases considerably. The number of cyclists rises from 6.3% to 9.5%, that is +50%. Furthermore, employers can give a bike to their employees as a benefit in kind subject to tax. Following Parliament’s decision, these company bikes also become tax-free. What’s more, in contrast to Holland where there is a limit of € 750, in Belgium there is no limit to the value of the company bike and the employer is also allowed to compensate his employee for the parking and maintenance costs of the bike. In other words, Holland is not always forerunner in cycling incentives.

Bicycles: Import Top Ten Belgium

Country Volume Average Value
  2007 2008 Difference 2007 2008 Difference
Taiwan 282,191 265,148 -6.0% 144.88 159.03 +9.8%
France 172,153 180,786 +5.0% 105.19 221.39 110,50%
Sri Lanka 180,298 158,134 -12.3% 44.74 50.60 +13.1%
China 178,417 120,092 -32.7% 37.82 44.23 +16.9%
Italy 99,843 108,305 +8.5% 91.07 86.79 -4.7%
Holland 154,109 106,874 -30.7% 288.17 523.81 +81.8%
Germany 32,599 209,526 +539.7% 60.68 117.74 +94.0%
Indonesia 58,672 89,872 -53.2% 111.33 108.87 +2.2%
Philippines 107,709 60,166 -44.1% 31.83 34.47 +8.3%
Bangladesh 32,625 57,103 +75.0% 67.36 69.56 3.3%
Total 1,443,258 1,520,590 +5.4% 109.27 141.55 +29.5%

Source: National Bank of Belgium

 
 

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