Covid-19 boosts e-bike sales in Finland

HELSINKI, Finland – People embraced cycling on a massive scale for commuting and leisure last year. The trends in the Finnish bicycle market are in line with developments in other European countries. As a result, the e-bike is rapidly gaining market share while the total market volume has been stable for some years.
The Finnish have seen an uptake in cycling as people look to avoid the risks of public transport and move independently on their own. – Photo Bike Europe

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The total market volume amounted up to 270,000 units in 2020, more or less in line with previous years’ sales. As the biggest majority of sales is done between March and June in the country, we can already give a good estimate of the 2021 market. Based on the import figures from January to July, the total market volume in 2021 will end roughly at around 260,000 units.

Cycling incentives

The outlook for the 2020 market was very positive, and after the skiing season, the stores were transformed again to prepare for the cycling season. Then, in March, businesses had to close due to Covid-19, and the outlook was very bleak for a few weeks. As in many other countries, the Finnish soon saw the benefits of cycling, and consumers rushed to the bicycle shops. People wanted to avoid the risks of public transport and move independently on their own. Team sports, especially those that took place indoors, were restricted, and people changed over to outdoor activities.

Meanwhile, governments had started all kinds of incentives to promote cycling, such as tax support for company bicycles and compensation for switching from the petrol car to an e-bike. Cycling was considered a safe means of transport as well as a sports activity and was heavily promoted. All these market developments resulted in demand beyond all expectations. Retailers quickly sold their stocks, and suppliers traded all their inventories for repeat orders. Since then, the Finnish market has struggled with a bicycle shortage that will only be solved when global supplies improve again.

Average retail price boosted

The bicycle trend and the reasons for model split are difficult to define due to the continuous shortage of products. However, all signs show that consumers value cycling and their bikes more than ever. Retailer reports and statistics reveal that the average purchasing price increased by 20% in two years. The lowest price category remained stable as ever, but those customers who used to ride middle-priced bikes were prepared to spend substantially more for a new bike. Hybrid bikes sell well, but today, consumers prefer bicycles that are lighter and technically more advanced.

In Finland, the mountain bike is still the most popular category as it can be used for commuting to school or work and is versatile in sports. The gravel bike has taken a substantial market share from road cycling, while fat bikes are still very appealing to use in snowy conditions during winter. The cargo bike is still a niche market in Finland, although the numbers are growing rapidly.

E-bike market share up to more than 15%

E-bikes bring in the money

In the past three years, the e-bike expanded its market share in volume from 4.2% in 2018 to more than 15% this year. In 2018, the market amounted to a modest 12,000 units, while in 2021, sales volume is estimated at around 40,000 units. More significant is the increase in the retail price as consumers are prepared to pay a higher average price for their e-bike today than three years ago.

A substantial number of retailers have doubled their turnover in 3 years and some even more, while the profitability of the trade has improved on all levels. This market transformation from bicycles to e-bikes has a big impact on retail. However, the sales of e-bikes have not spread evenly over all retailers.

Many smaller retailers have been reluctant or slow to start offering this new product category in their shops. Today, the retail e-bike market is dominated by a few larger retailers. The cheaper models are sold by the mass markets, and a growing number of middle and higher-priced bikes are in the hands of larger specialised bicycle shops.

Positive outlook

The outlook for the cycling industry is exceptionally good in Finland. Consumers are interested in cycling and are aware of its benefits. The government supports cycling with a wide range of initiatives like ‘cycle-to-work campaigns, better facilities and investments in infrastructure. The big problem comes from the industry itself. There is a huge shortage of products, and retailers can’t offer the full range to their customers. The service shops are still having a difficult time due to the scarcity of parts and components. The market developments of the past 1.5 years made retailers more aware of the importance of detailed planning systems. This will change their approach towards suppliers in the near future.