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Cycling Surges in Australia, but Business Fared Poorly

Sales & Trends

The number of Australians riding bicycles has surged in recent years. However, businesses selling, manufacturing, repairing and servicing bikes fared poorly, with industry revenue contracting over the five years through 2011-12. Industry research firm IBISWorld has updated its report on the Bicycles in Australia industry.

Cycling Surges in Australia, but Business Fared Poorly

 

MELBOURNE, Australia – The number of Australians riding bicycles has surged in recent years. However, businesses selling, manufacturing, repairing and servicing bikes fared poorly, with industry revenue contracting over the five years through 2011-12. Industry research firm IBISWorld has updated its report on the Bicycles in Australia industry.

Low consumer sentiment on the back of higher interest rates is expected to lower industry sales, particularly for bikes and accessories to the youth leisure market. In contrast to industry revenue, cyclist numbers increased solidly over the past five years. Cycling is one of Australia’s most popular activities. This is reported by IBISWorld in its updated report on the Australian bike market.

‘Cyclist numbers increased solidly over the past five years’
According to IBISWorld the Australian bike sector revenue contracted by an estimated 1.4% per annum over the five years through 2011-12 to reach AUD 2.71 billion (2.1 billion euro). According to IBISWorld industry analyst Teruni Nugawila, “In contrast to industry revenue, cyclist numbers increased solidly over the past five years.” Cycling is one of Australia’s most popular activities. IBISWorld estimates that in 2011-12 approximately 2.4 million Australians ride regularly – up from 1.6 million in 2006-07.

Skyrocketing fuel prices accelerated the cycling trend. As fuel prices increased, more people rode bicycles for short trips instead of driving cars. “Despite this seemingly good news for the industry,” Nugawila adds, “the increase in cyclists was driven by Australians dusting off their existing bikes and pumping up the tyres.”

Number of bikes sold in Australia remained steady
The number of bikes sold in Australia remained steady despite increased cyclist numbers. However, the outlook for the next five years for the bike industry is bright, with governments investing heavily in building bike paths and lanes to improve safety. Local councils are requiring bike lanes in new estates, while state and federal government programs to raise awareness of healthy living will all help boost demand in the next five years. Industry revenue is expected to increase over the five years through 2016-17.

The industry is highly fragmented, with nearly half of all bikes and accessories being sold through independent and specialist bicycle retailers. The largest three operators are Sheppard Industries Inc, which operates Sheppard Cycles and owns Avanti Bicycle Company; Woolworths, which retails bicycle goods through Big W; and Wesfarmers, which retails bicycle goods through Target and Kmart. Woolworths and Wesfarmers focus on children’s bikes. Click here for more.

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