ANALYSIS
accelerating and even outnumbering that of pedal bikes in select markets. This includes Germany, where e-bikes accounted for just 8% of all bikes sold in 2011 but rose to 53% in 2023. While other bike markets like the Netherlands, Belgium, Austria, and Switzerland have also seen the share of e-bikes rise to around 50%, across Europe as a whole, this stood at a more muted 27% in 2022. However, as the benefits of e-bikes become more widely understood and the entry price for e-bikes comes down, Houlihan Lokey is predicting a second wave of e-bike adoption. This is anticipated to propel the share of
e-bikes to 39% in Europe by 2028. The vast majority of industry executives
interviewed confirmed the growing relevance of this trend, with 88% agreeing that a “compelling e-bike portfolio will be paramount to remain competitive going forward”.
Stromer was one of the brands who contributed to the report
Brand strength Leaders in the bike industry unanimously told the report that brand building is “a key priority”.
All of the experts surveyed agreed that brand strength will become more important going forward — the highest level of consensus of all the trends discussed. As bikes become more expensive and complex, there is much more consumer involvement in buying and owning a bike.
The report reads: “The simple process of just going to the
bike shop nearby and buying what is advised is increasingly replaced by a journey of research in a quest to understand the new complexities like e-motor performance requirements, battery life, and servicing. “On top, the heftier financial outlay requires a higher level of certainty that a certain product is a good choice for the consumer’s needs. “This means brands have become more important, not only as symbols of self-expression and achievement but also as
Specialized manufactures its own products under the Roval brand
trusted consumer partners.” As bike companies become more profitable, they will likely increase their marketing budgets.
Brands which offer improved means of direct communication channels such as: social media, bike apps, flagship stores, and own retail outlets “will gain advantage over competition, which will support a gradual consolidation of market shares in the industry”.
As these successful brands mature and develop the ability
to handle more complexity, another opportunity to improve the margin profile is capturing “a higher share” of the total bike, according to the report.
In short, this means that more brands begin engineering more of their own components to increase margin. Current examples include Trek utilising Bontrager parts, Specialized and Roval, Scott and Syncros. The list goes on. More than two thirds of respondents to the reports said that expanding their role in the supply chain and developing, engineering, or partially manufacturing components in- house will be “a key topic” for their companies in the next few years.
Stromer is one brand collaborating with component suppliers on own-brand batteries, brakes, wheels, handlebars, and stems. One Stromer executive told researchers: “There is a lot of margin potential in reducing the bill of materials. How many branded components do I really need to put on a bike to fulfil consumer desire?
“In many cases, the consumer doesn’t care. It just needs to be a good component.”
As well as manufacturing in-house components, firms
www.bikebiz.com August 2024 | 27
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