US Bicycle Market Key Trends

Part
01
of one
Part
01

US Bicycle Market Trends

Four key trends in the U.S. bicycling space are the proliferation of electric bikes, the decline in road bike sales, the gravel bike rage, and the decrease in bike sharing. Details for each trend are below.

ELECTRIC BICYCLES

  • In 2018, sales of electric bicycles increased by 73%, which represented the sales of 400,000 e-bikes.
  • In contrast to the growth of e-bikes, the sales of traditional bicycles fell 8% in 2018.
  • As of 2018, there are between 120 and 150 brands actively selling e-bikes in the U.S.
  • The market size for e-bikes in the U.S. was estimated at $176 million in 2018.
  • The higher price tag of e-bikes compared to traditional bicycles is keeping the industry afloat. For example, the average cost of an e-bike is $3,500, which is "roughly three times as much as a regular bike."
  • The dominant use for e-bikes in the U.S. is commuting and 50% of e-bike purchasers are over the age of 55.
  • One reason why e-bikes are taking off is because of improvements in the engine, which have eased cyclists fears of losing power on long rides.
  • This trend is taking off later in the United States than in other parts of the world, but experts believe e-bikes could represent the "start of a new golden age for the industry." E-bikes outsold traditional bikes in the Netherlands for the first time in 2018, signaling a continued trend that is likely to spread to the U.S.
  • The e-bike trend is parallel to the 14% drop in "hard-core American cyclists since 2013" and the 7% increase in casual riders over that same period.
  • Main drivers of this trend include "growing concerns about obesity, traffic congestion, and the environment."
  • Along with the e-bike revolution, increasing technology is moving toward making e-bikes "fully networked." As Tamara Winograd of Bosch eBike Systems said, "users want smart solutions that enable digital networking and navigation, for example, as well as the recording of their own training data."
  • This desire for smart additions to e-bikes is giving rise to innovative solutions such as navigation systems, activity trackers, and even internet access.

DECLINE IN ROAD BIKE SALES

  • In 2017, road cycling dropped by 4%, while other segments like cross and gravel bikes increased their market share.
  • In 2018, "Sport Women's road bike inventory showed the sharpest decline" of any bicycle subcategory, dropping 54% in number of units.
  • One reason for this trend is that in general road cyclists do not feel safe on the road with the increasing traffic.
  • According to AAA, in 2016, 65% of the 2,045 people killed in hit-and-run accidents were bicyclists.
  • Cities are encouraging more people to ride bikes, but they are not providing the infrastructure to safely cycle on the roads.
  • Biking expert Nick Legan says that there is a "growing feeling that riding on highways is not worth the risk... and with over a quarter of the roads in the U.S. unpaved, it becomes a question of approachability, availability."
  • As a result, when cyclists want to ride for relaxation purposes, they are "seeking out and riding car-free trails," where they are not going to have to be hyper-aware of their surroundings.
  • In addition, there has been little innovation in road bikes and because the products tend to have superior longevity, there has been little incentive to invest in new road bikes.
  • Moreover, there has been an increase in interest in mountain biking, which has shifted sales from road bikes to mountain bikes.
  • Along with the increased danger to road bicyclists, road biking is not a family-friendly activity, which has accelerated the decline of this segment.
  • Road biking is a solitary sport and that has caused its popularity to decrease in favor of biking activities that allow all family members to join in the fun.
  • Experts also say that waning interest in road biking can be traced to "disillusionment after the drug scandals of the Armstrong era."

GRAVEL BIKES

  • Gravel bikes, which feature "wider wheels and tires allowing for off-road use," are the fastest growing segment of the bike market.
  • In 2017, shipments of gravel bikes added "$26.9 million of new business" to the U.S. bicycling industry.
  • As Nick Legan, author of Gravel Cycling, stated, "Gravel has been growing for years... but I would say that now, this year, is the watershed moment."
  • The concept of gravel bikes originated in the U.S. "in areas such as Colorado, Utah and Idaho," where there are thousands of miles of "unpaved gravel roads snaking through forests and across mountains. These roads provide fantastic, traffic-free riding, but are too rough to be ridden comfortably (or without constant punctures) on a road bike, yet not rugged enough to justify pedaling the weight of a mountain bike."
  • The rise in popularity of gravel bikes have given birth to the concept of "bikepacking," where cyclists use their gravel bikes to explore wild terrain, often carrying tents and sleeping bags for "multi-day, or even multi-week rides."
  • Marketers have increased efforts to sell dedicated gravel bikes to riders who are looking to leave the road and participate in "lengthy off-road detours."
  • As avid bicyclist Eben Weiss stated, "making a bike specifically for a certain kind of riding means more people are going to do it," which is why gravel bikes have spiked in popularity.
  • Aaron Gulley, a gravel bike rider who began participating in gravel bike events in 2014, indicated that during his first event, "bikes were a hodgepodge, from steep carbon road racers with 30c tires shoehorned into a frame with poor clearance to 20-year-old mountain bikes with clip-on aero bars." However, four years later, in 2018, "almost everyone was riding a purpose-built gravel bike."
  • Even though road bikes could be easily converted to gravel bikes by changing the tires, "today’s gravel bikes are simply more enjoyable to ride."

BIKE SHARING DECREASE

  • Bike sharing became popular in 2017, as Americans took more than 35 million bike share trips, an increase of 25% over 2016. In addition, by 2018, there were more than 100 bike share systems across the U.S.
  • However, in 2019, many bike share companies, including JUMP, which is owned by Uber, raised their rental prices, making bike sharing less attractive to commuters.
  • The reason for the increase in price is that many bike share startups (along with other sharing economy companies) have been "significantly subsidized by investors as a means of attracting users with low prices," but now those shareholders are pressuring the companies to begin turning a profit and customers are now "being asked to pay what it actually costs companies to provide them with shareable bikes, scooters, and rides."
  • JUMP doubled the price of a 30-minute bike share commute in June 2019, which has caused some riders to stop using the service.
  • Moreover, commuters have indicated that bike sharing no longer becomes appealing when prices go up and many are choosing to purchase their own e-bikes or scooters rather than pay the increased fee.
  • Sam Korus, an analyst with ARK Invest, believes that shared bike and scooter companies are "in trouble as subsidies come to an end."
  • Additionally, even though the U.S. economy is still expanding, bike share companies are particularly vulnerable to economic slowdowns because consumers will be even less likely to pay for shared services at increased prices.
  • The decline in bike sharing could represent a boon for e-bike and traditional bike sales, especially as they continue to come down in price. Many people who purchase e-bikes were introduced to them through bike sharing programs.
  • High maintenance, damage repair, and replacement costs are also an issue for bike share programs, which almost always lead to negative profit growth. These problems will also likely contribute to fee increases, which will in turn push more commuters away.
  • Even bike share programs that have received federal funding, such as Summit Bike Share, are struggling due to decreased ridership and maintenance issues.
  • Summit Bike Share logged 28,000 fewer rides between January and September 2019 compared to the same time frame in 2018.
  • Likewise, CoGo bike share ridership in Columbus, Ohio, declined for the first time in 2018. Total ridership was 40,716 compared to 52,205 in 2017.
  • Weather and the introduction of dockless scooters to the city have been given as reasons for the decline.

RESEARCH STRATEGY

To identify four trends in the U.S. bicycling space, we searched through industry-specific publications like Outside, Bike Tahoe, and Bicycle Retailer, among others. We were able to successfully identify four trends that are impacting the bicycle industry in the U.S. and we verified that these were key trends by finding their economic impact on the industry in publications such as Fortune, Time, Fast Company, IPSO, and others. All trends were mentioned in multiple industry and financial publications and are expected to have significant impact on the market size or growth. We were also careful to support our findings with expert opinions from avid cyclists, investment analysts, and industry leaders.
Sources
Sources