Nordic’s E-Bike Sales Increase, But Markets Tend to Differentiate
COPENHAGEN, Denmark – While market characteristics used to be rather similar, bicycle sales in Denmark, Sweden and Finland is showing some striking differences this year. While in Denmark e-bike sales increased substantially, the Swedish e-bike market boomed by some 50%. Finland’s overall sales is lagging behind.
Denmark’s total market volume was 456,409 units last year, a decline of 13% compared with 2015. Only the e-bike market accelerated by 9% to 38,444 units. Today the e-bike market holds a market share of 13.1%.
Increasing importance of export
Also remarkable is the rise of the Danish export. Since 2008 Danish bicycles were not much in demand outside Denmark but the e-bike has turned this around. In 2017 the total export volume of bicycles will reach about 35,000 units, including 4,500 e-bikes. Transit business is a part of the increasing e-bike export. Despite the high labour costs; a part of the Danish bicycle industry transformed into a supplier for special products, such as cargo bikes, e-bikes, and competition bikes. For example, e-bike production increased significantly – by 28% from 1,294 units in 2016 to 1,660 e-bikes this year.
Sales per category
The market growth in Denmark is mainly the result of the rising popularity of e-bikes. While the average retail price for regular bikes already stands at € 700, e-bikes retail for an average price of €1,700. In line with other European markets enjoying an e-bike boom; this category is also in Denmark boosting market value.
Sweden sees transition to e-bike market
In Sweden everybody is getting set for another acceleration in e-bike sales. All indicators clearly show the market is ready to line up with the European trend. Between September 2016 and August 2017 e-bike sales already increased by 50% to 67,500 units which retail for an average price of €1,650. In two years’ time the total e-bike market doubled in Sweden.
Thanks to rapidly increasing sales, the e-bike category has gained a market share of 12% this year. The overall expectation in the industry is that e-bike sales in Sweden will continue to expand in the years ahead. One of the main reasons for this positive outlook is the Government’s decision to grant a subsidy of 25% (up to €1,000) per e-bike for all individuals. The Swedish government has allocated over one billion krona for boosting e-bike sales and use. This amount will result in a subsidy of close to € 110 million between 2018 and 2020.
Cycleurope steps up e-bike production
The Swedish example is now the benchmark for all European countries to follow. For example, discussions regarding subsidies have started in the UK, while in Norway a generous subsidy scheme on e-bikes is already in place. Cycleurope’s Swedish production facility in Varberg has stepped into the rapidly developing e-bike market and opened up a dedicated production line last year.
“We expect a production of 8,000 units in 2017,” explained Cycleurope President and CEO Tony Grimaldi in the report when he announced the start of the e-bike manufacturing in the regional Swedish newspaper ‘Hallands Nyheter’. According to the report the Varberg facility has an output of 100,000 bicycles annually. Grimaldo also said, “In the future it will even get bigger than we think. We are just at the beginning of the e-bike boom in Sweden and I expect our annual e-bike output to grow to 20,000 or even 30,000 units.” In Varberg Cycleurope employs some 150 people and Grimaldi hopes to grow this even further thanks to the e-bike success.
IBDs increase their market share
The leading webshop in Sweden is Cykelkraft.se but their impact on the retail market is still limited as webshops have an estimated market share of only 3%. IBDs even managed to increase their market share by 2% to 65% this year. Whether they can maintain this position is doubtful, as one of the sporting goods chains XXL opened several new shops this year. The online market will also stir up the retailer’s market position in the near future, with the market entrance of hellorider.se. This webshop is part of International Bike Group (IBG) who successfully operates Bike shop dot NL (fietsenwinkel.nl) by intensively and aggressively advertising the discounts it offers on bikes from renowned brand names.
Finnish market hit by cold weather
In Finland the bicycle business faces big challenges. Sales volumes have been decreasing for some years now, while consumers become more and more demanding regarding service levels while demand for personalized products is also increasing. Along with a very snowy winter, Finland experienced extremely cold weather in April and May this year, traditionally the best time of the year for bicycle retailers.
According to official statistics 230,000 bicycles were imported in the first eight months of this year while some 30,000 bicycles were made locally. Based on that January – August import quantity the Finnish trade magazine Sporttimyyjä estimates 2017 bicycle sales at about 260,000 units, a decline of 10% compared to 2016.
Double digit decline in volume
Apart from weather conditions the question why the Finnish bicycle market decreased substantially this year, is unclear. Also, in 2016 the market declined by nearly eight percent and expectations for 2017 were very positive at that time. In Finland cycling is a fashion; a growing number of people commute by bicycle and the infrastructure is improving all the time thanks to an investment scheme. Media have given good coverage and cycling is regarded as a healthy way of life. All market indications are positive but don’t result in growing sales.
Most retailers blame the weather in April and May, which, as said, is the best sales season. Due to the snowy winter the riding season is short and the sales season is even shorter. The weather was extremely cold in April – May, not very appealing to go cycling. While the industry has no answer for handling the declining volumes, the average retail price in Finland increased by about ten percent.
E-bike market still slow
Sales of e-bikes remains weak in Finland. According to market estimates retail sales will increase to 7,000 units in 2017, almost double to the volume in 2016. While percentage wise this is a significant improvement, the total number of units is still low. The e-bike’s market share is still less than three percent. However, the e-bike is still practically unknown among the consumers and the trade has to put in a lot of effort to grow this market.
The Finnish media reported very positively about the e-bike last year and market expectations were very high. Finland’s e-bike manufacturer Helkama even founded a dedicated chain of e-bikes shops called ’E-Bike Ekspertti’. The shops provide the consumers a wide range of e-bikes, e-bikes are available for test rides, and the shops even take care of a proper training regarding how to handle an e-bike safely in traffic. All the effort put in paid off and sales doubled. This project is expected to continue next year.
Model split changes
Some of the changes in the market become evident when looking at the fluctuations in the market share of various bicycle categories. Above all, the Finnish IBDs have lost market share to mass market sellers over the years, attracting people who want to spend less euros on a bicycle. On the other hand, those who still go to an IBD spend an increasing amount of money on more sophisticated bikes.
These changes in the market influence retailing. More expensive models are sold by IBDs offering the consumer a wider selection so the industry concentrates on these professional high-end retailers. Those selling medium-priced bikes have a hard time facing the mass market’s strong competition on price. All together this makes life for the IBD not easy either, especially when they have to compete more and more with Internet shops. Large internationally-operating webshops look for Finnish customers too and have gained a significant market share.
Contributors to this report: Torben Finn Laursen for Denmark, Heikki Kuva for Finland and Joakim Stenberg for Sweden.