Bike Sector in Russia Preparing for Difficult Season
MOSCOW, Russia – As the Russian economy suffers from a severe crisis Moscow’s bike show Velo-Park proved an indication on how the bike business is coping at the start of a new season. The move to a smaller hall in which also the Moto-Park show merged, signaled that companies were getting ready for a difficult season.
The 12th Velo-Park show took place from March 11 to 13. As usual the show took place at the modern Crocus Expo exhibition complex just outside Moscow. Though this year it moved to a smaller hall.
Less new bicycles; more maintenance parts
Shimano had a big presence at Velo-Park 2016 occupying a booth straight at the entrance. Normark, the Russian distributor of the Japanese parts maker, told to expect an increase in sales due to higher demand for maintenance parts as people buy less new bicycles. Next to that the Shimano distributor signaled a market shift to more basic bikes with lower level components. This could also spark demand for replacement parts during the season. The Shimano staff also told that repair workshops are being started. In particular in regions where people traditionally earn less than in Moscow or other major cities.
Growing online business
Striking this year was also that very few reps from Chinese parts makers were at Velo-Park. The reason is that currently lots of business with Russian customers is being done via webshop ‘AliExpress’. This online business could prove to be a risky venture as the Russian Government is preparing new rules on cross-border deliveries. Currently there are no custom taxes for orders under 1,000 euro. This limit could be set as low as 22 euro; which will kill online orders from abroad altogether. However, it has to be noted that that these changes are being discussed for three years now and that there’s no convenient system for paying custom taxes on noncommercial shipments and there are no signs of such a system being set-up.
No electric bikes
The largest Russian bicycle manufacturer Velomotors company selling bikes, motorcycles and quads under Stels brand, showed about a dozen models of which more than a half were children bikes, others were all MTBs, but there were also a couple of Fat-bikes. Several other companies also brought Fat-bikes and components for them to the show. This trend might steal a hipster market where fix-geared bikes and cruisers are still moderately popular. Notably no electric bikes were presented at the show by Velomotors. It could mean that Velomotors does not consider Russian market to be ready for e-bikes. Currently only two Russian companies are involved in e-bikers; Eltreco and Elbike. Currently e-bike sales are estimated at two to four thousand bikes, including conversion kits.
The recent Ruble devaluation isn’t helping e-bike sales as well as regular bicycle sales. Retailers say that the average bike price is 12 -18 thousand Russian ruble (150-225 euro), yet electric bicycles start at 50 thousand ruble (625 euro). After the recent ruble devaluation average salaries didn’t rise. Manufacturers say they have to cut costs and sacrifice their mark-up in order to stay in business. With that Russian is definitely not a market where modern trends like e-bikes have clear opportunities.