Norway 2012: Cycling Market Remains Sports Only
OSLO, Norway – The 2012 bicycle season started positively with an all-time high for sales volume in the first quarter, due to a fantastic March. But sales dropped in April, when the monthly rainfall in Norway was 145% higher than normal. The months of May and June were also quite cold and wet. Then sales picked up again in July, August, and September thanks to warmer weather with less rain.
The total number of bicycles sold in Norway this year will total 400,000 units. Considering Norway has only 5 million inhabitants, the outside temperature averages 4-5 degrees Celsius, and the winter lasts for at least five months of the year, this is a quite high volume.
The sports and cycle market has grown more than any other retail industry in Norway in the last decade. On average, the cycle and sports market has grown by close to 10% annually between 2005-2011. However, in 2012 this market is expected to grow by only 3%. Although, Norway is still selling the most sports equipment in the world per capita, more than three times the average in Europe. Internet sales are growing fast and the total value of cycling products sold online (inside of Norway) is calculated at more than 100 million Norwegian Krone (NOK) (€13.6 million).
The mild 2011/12 winter, combined with poor spring cycle sales was a harmful combination for the sport shops selling skis in the winter and bicycles in the summer. Many sporting good shops are starting winter sales in fall 2012 with 20% to 80 % discounts, to clear out last year’s winter products. The mix of large inventories of winter clothes, fierce competition, and margin pressure means an uncertain future for many sporting goods shops. Following a decade of growth the market faces fierce competition in the years ahead.
29ers boost market volumes
The 2012 market was expected to boost 29er sales. The sales took off, but none of the key distributors stocked enough of the 29ers to meet demand. As a result the 29er segment was sold out nationwide by the end of May. A lot of importers ended up with MY 2012 26 inch mountain bikes still in stock. These are now being sold out, to clean the warehouses and make room for another round of 29ers in 2013.
Imports (no anti-dumping)
The official Norwegian bureau of statistics reports that the total import of bicycles during the first nine months of 2012 was 419,000, down 2.8% from the first 9 months of 2011, when 431,000 bicycles were imported. There is no bicycle production in Norway. All bikes are imported. As Norway is not a member of the European Union, bike imports from China are not hampered by high anti-dumping duties. Not surprisingly, China is the main supplier to Norway, both in units as well as in value. The average price of imported bikes is NOK 1,670 (€228) and has increased by 13.6% since 2010. There are indications that the average price of imported bikes from Taiwan is going down, while average price from China is increasing.
Top 5 Bike Exporters to Norway
|January –||September 2011||January –||September 2012|
|Units||Value NOK*||Average Value||Units||Value NOK*||Average Value|
* Value in Norwegian Krone
Source Stians Sport AS
Cycling getting more and more popular
The majority of bicycles sold in Norway are medium priced MTBs and hybrids. However, a growing number of people are discovering cycling as a sport. Another important trend is cycling as a lifestyle product. This market development grows the need for specific bikes for different riding purposes. It also leads to people buying more than one bicycle as their interests might include road, cross-country, cyclocross, and commuting. Winning results from racers such as Junior World Champion Oscar Svendsen (Joker Merida), Evald Boasson Hagen (Team Sky) and World Champions Thor Hushovd (BMC) and Gunn-Rita Dahle Flesjå (Multivan Merida) are also boosting interest in cycling sports.
Cycling events such as the Birkebeinerrittet, Grenserittet, Nordsjørittet and Trondheim Oslo are still very popular and attract thousands of new cyclists every year. The latest edition of the most popular MTB marathon race in Norway and the world’s largest cross country bicycle race, Birkebeinerrittet, sold all 20,000 entry tickets in less than 30 minutes.
Norway’s cycling infrastructure is not very well developed. Unfortunately, road conditions for urban cycling are close to miserable in most major cities. This results in only 6% of all Norwegians riding their bike every day to work or school. Norway is one of the richest countries in the world, but at the same time a developing country with respect to adapting conditions for cycling. In both Sweden and Denmark the percentage of people who cycle to work or to school is much higher than in Norway. 13% of the Swedes and 17% of the Danes use their bicycle for daily transportation.
The Norway government’s willingness to facilitate better bike paths will be important for the future growth of the cycling market in the country. For the same reason e-bikes are almost not available in Norway. Just a few big brands have put products out there to boost this segment. The market is eager to see how e-bike sales will evolve in the years ahead, particularly with regards to environmental issues. Even though Norway, with its hills and mountains could be a perfect market for e-bikes, electric bicycles haven’t caught on as a trend so far. Nevertheless some major brands are introducing e-bikes for 2013.
No other country in the world has such a strong domination by retail chains. There are 9 chains counting for 90 % of the turnover in sporting goods business, including bicycles. The fierce competition fosters an increase in volume and decrease in margins among most importers and players in the market. The Gresvig group, which includes G-Sport and Intersport stores, accounts for more than 38% of the turnover in the sports industry. Gresvig has several of its own bicycle brands, including Diamant, Nakamura, and Air.
In fall 2010, Gresvig started up a new superstore concept called ‘G MAX’. These large stores measure between 2,000 to 6,000 square meters and have to compete with XXL, the fastest growing retail chain in Norwegian’s sports industry. XXL has 16 stores in Norway’s main cities as well as eight recently-opened stores in Sweden. XXL also operates its own labels called White and Spokes, in addition to international brands in their stores.
The third largest player in the market, Sport 1, also has its own labels – Xeed and Jamis. There are four major bicycle distributors in the market. Gresvig (Diamant/Nakamura), Stians Sport AS (Merida), Ramo (Scott) and Cycleurope (DBS). They account for nearly 50% of the market. Diamant/Nakamura is sold exclusively in G-Sport and Intersport stores. Stians Sport AS has expanded their 25 year-old business selling Merida in Norway to Sweden, with their subsidiary Merida Sverige AB as local distributor.