Depressed China Market Hits Sports Bikes in Particular
NANJING, China – It already became evident in the financial reports from companies like Giant, Merida and Shimano that have major interests in the Chinese market. Their revenues slumped last year due to the depressed state of the Chinese market and in particular the Chinese sports bike market. To which extent that market slumped and, more importantly, expectations on the near future has been highlighted at the recently held Asia Bike Show in Nanjing.
The 6th edition of Asia Bike show in Nanjing, which took place mid-September also suffered from the realities of the Chinese bicycle market. Visitor numbers declined by more than 35% compared to last year to 6,729 trade visitors and another 1,901 end consumers. Also the number of exhibited brands dropped from 443 in 2015 to 321 this year.
16 to 18% drop
The major reason for this drop is in the fact that the Chinese market for sports bikes as well as sports P&A dropped by an estimated 16 to 18% in 2015 compared to a year earlier. These figures stem from a market study by Beijing German-Messe Exhibition Consulting Co.,Ltd which is related to Eurobike and Asia Bike organizer Messe Friedrichshafen.
Sharp change in consumer preference
According to this market study value-wise the Chinese sports bike market shrunk from CNY 9.6 billion (€ 1.3bn) in 2014 to 7.6 bn (€ 1.0bn) in 2015. In 2015 also a sharp change in consumer preference occurred. Demand for road race models upped by a big 47% (in value) while MTBs showed a 49% drop. Interesting is also that the Asia Bike study reveals that the Taiwan industry only exported some 100,000 sports bikes to China in 2015.
Overall production in China
According to the Asia Bike market report total bicycle production in China stood in 2015 at somewhat over 80 million units (80.3mn to be more precise). This was 3.3% lower compared to 2014 when production totalled 83 million bicycles. Of the 80 million bikes made in 2015 China exported 57.5 million units. This number represented a 8.3% export drop compared to the 67 million bicycles exported by China in 2014.
On what the near future will bring for the bicycle market in China, the Asia Bike study is optimistic. In particular because of the growing of middle class population in China and their disposable income. The fact that the Chinese government favours sport and cycling also helps while the number of Chinese that cycle as a sport is still increasing. The same goes for the number of bicycle events that take place annually. Also the unit retail price for sports bikes is increasing thanks to a higher demand for high end bicycles.
Understanding and aligning
The Asia Bike market study also says, “The China bicycle market has seen enormous growth in 2012 to 2014. As in 2015, only 11% of the population has reached the middle class. As their ranks swell, so will their effect on the economy. Following Clothing, Food, Living and Mobility, there will be huge potential for the recreation sector, especially sports related industries. But to take advantage of them, the bicycle businesses will need to understand China’s urban middle class and align pricing, product offering, sales channels, marketing communication and other practices to this target groups’ specific needs.”