France 2010: IDB Regains Share in Declining Market
The bicycle business proved to be more resilient than other consumer sectors in France. Mostly attributed to widespread uncertainty on the countrys economy, French households watched their spending last year and revenues on the French bike market declined by 5% during the first half of 2010.
This trend continued throughout the rest of the year. According to the French industry organization Conseil National des Profession du Cycle (CNPC and Tous à Vélo) bicycle sales in 2010 were down 3.5% compared to 2009.
With 3,031,300 bicycles sold in 2010 (excluding internet sales), France is (money-wise) still the fourth largest European market after Germany, the Netherlands and the United Kingdom. These bikes were sold for an average price of €436.77. CNPC, which is celebrating its 120th anniversary this year, also reported that the total turnover made with the sale of new bicycles and P&A amounted to close to €1.3 billion, a decrease for the third consecutive year.
Just like previous years, the independent bicycle dealers were able to regain market share from the multisport supermarkets and the food supermarkets, in units as well as moneywise. According to the annual figures of the CNPC the IBD’s market share in units grew from 22% in 2009 to 25% in 2010. In value their market share expanded to 51.5% last year (compared to 48.5% in 2009). They did not get it for free however. To reclaim this market share the IBD’s had to lower their average retail price by a substantial 6.4% to €539.58 per bicycle. The sport department stores also had to take a blow and reduce their average price by 5.5%. Only the food supermarkets were able to raise their average price, to €109.14 (a 6.4% increase related to 2009).
It is clear that despite the growing number of units sold via the IBD shops they have to take care of their margins. In 2009 they saw a marginal increase of the average price of only 0.5%. Added to this year’s decrease, it could mean that the financial position of the IBDs is under pressure. It is positive to see market share growing, but not at all costs. For many years the French IBDs were able to stay on their island – providing the maximum service to customers willing to pay for this professional assistance amid the price-dumping practices by the hypermarkets who degraded a bicycle to a throwaway. Now the tide is turning for the supermarkets and they are losing their market to the IBD again.
Multisport supermarkets remain the leading distributor in the number of bicycles sold, with 51% of the total. Their turnover in bicycles and accessories stood at 38% of the 2010 total for the sector. The food supermarkets’ position continued to decline; to only 10% of the total market, a decrease of 8.5% compared to 2009. They now can only lay claim to 25% of the market volume.
Cycling mobility by city bikes, e-bikes, folding bikes continued to grow. In 2010 these mobility bike categories accounted for 27% of the total sale of bicycles compared to 17% in 2000. Such significant increases were mainly the result of rising sales of e-bikes. This market segment showed a dramatic increase of more than 60% last year and now accounts for nearly 40,000 units annually. Also folding bikes are also becoming increasingly popular in France, with sales up over 76%!
The market share of bicycles for recreational use continued to decline, but remained
ubstantial in volume. In the past decade the market share for recreational bikes declined from 73% in 2000 to 63% last year. MTB styled bicycles and kid’s bikes still make up nearly 50% of this segment. The sports market remained stable at around 10%, thanks to sales growth of high-end road racing and mountain bikes.
Sales of components and accessories for bicycles (wheels, tires, pedals, brakes, lights, locks, pumps, helmets) were down by 4% compared to 2009, representing €486 million, or nearly 40 % of total turnover in the French bike sector.
Which bikes are sold where?
The distribution on the French market shows substantial differences per category of bike. The road race bike is still the leading domain of the independent bicycle dealers. They take more than 80% of the market volume and leave just 19% to the multisport supermarkets. The number of road race bikes sold via the food supermarkets is negligible. On the other hand, the MTB market is largely dominated by the supermarket channel. Although the IBDs sell 25.5% in volume they are overshadowed by the multisport supermarkets, who sell 53%, and the food supermarkets with 21% of all MTBs in France. The market position of the multisport supermarkets in the hybrid bike segment is even stronger with 56.5% in units. Remarkably, the food supermarkets are not really involved in this segment as they sell only 7% of all hybrid bikes, leaving 36.5% for the IBDs.
The city bike market is the only one which is more or less equally divided among the three distribution channels with 38% for the food supermarkets, 33% at the multisport supermarkets and 29% at the bicycle dealers. Not surprisingly e-bikes are mainly sold by the IBDs with 57% of the market share, although this product, which requires service and maintenance, is also sold in substantial numbers by non-specialist retailers in France. These remaining 43% sold by the non-specialists still accounts for 16,340 units in 2010.
The IBD is not top of mind among the French when it comes to small size bicycles. 60% of the folding bikes are sold by the multisport supermarkets and the food supermarkets and these two channels take even 68% of the BMX and Bi-Cross market. For small size (20 and 24 inch) MTBs only 13% of the French go to a bike specialist. 87% goes to the supermarket. Finally 93.5% of the kid’s bikes are put on the market by the multisport supermarkets (53.5%) and the food supermarkets (40%).
The French industry
The French industry organization CNPC further notes in its annual report that in 2010, 75% of all bikes sold in France were imported and that the French industry supplies only 25% of the local market, whereas it still represented 35% just five years ago. As the number of imported bikes remained more or less stable in the past years, the local production figures went down, year after year. In 2010 the local production number tumbled to less than one million, while the output of the French bicycle industry still stood at 1,290,000 units in 2006. In 2010, French manufacturers shipped 845,000 bikes, of which 80% were for the domestic market and 20% for export.
The tight situation among the French manufacturers made the two leading bicycle industry shows come together. In a few years time the R’Bike in Lyon proved to be a strong competitor for the Paris Cycle Show. Both organizers decided to work together closely and to alternate their schedule. The R’Bike Lyon will be held on even years and the Paris Salon in odd years. Manufacturers, distributors, and retailers appreciated the agreement. Next September the Paris Cycle Show expects to host some 350 brands from 23 countries.