Working in the US bicycle market, I frequently hear comparisons to the European market. But this is often misconstrued, as the countries of Europe vary significantly from one another. Some like the UK have very robust data collection efforts, while others like Norway have virtually no collection mechanism. This got me curious as to what we could learn from indirect measurements. Norway offers a unique opportunity as all registered legal entities must publish their financials.
By pulling in data from many brands across the world, I was able to identify 181 actively operating retailers in the Norwegian bicycle market. In contrast to the US, many of these retailers are multi-sport, as opposed to dedicated bike shops. This naturally makes sense in a country with snowy and dark winters. Only 32% of locations are dedicated bike shops.
Another divergence is how prevalent ecommerce is among these retailers. Both traditional bike shops and multi-sport retailers offer ecommerce as an option for more than 80% of retail locations. Many of the remaining appear to be small, sole proprietor operations.
The big challenge is defining how large the Norwegian market is in revenues. Totaling the bike shops is pretty straight forward and amounts to ~800m NOK in 2023. For multi-sport retailers, we have to make some assumption of what portion of their business comes from bicycle related activities. While most of these businesses are split between cycling and skiing, some do offer camping and other equipment. For the purposes of this analysis, I am using an assumption that 30% of revenue comes from the cycling segment, partially because of the much higher average cost for cycling, but high prevalence of skiing in Norway. This results in an estimate of just under 2 billion NOK in 2023. Some modeling was required for 2023 data as not all retailers had reported their figures by the time of publication.
If we look at the total growth of the Norwegian market since 2015, we can see that there was very steady growth through 2019. In contrast to some European countries, which had much less of a bike boom than the US, Norway saw growth of 40-60% in revenues. This appears to have been disproportionately focused on bike shops, though our model does not account for a change in category mix within Multi-Sport retailers. The high growth was subsequently coupled with a steeper fall than Multi-Sport retailers over the past couple of years. This likely reflects a similar pulling forward of sales that we have observed in the US.
So what does this really tell us? The overall health of the bicycle market in Norway appears to be good, though there are still a lot of built up gains over the past couple of years, and they may experience some further fall. Based on these figures, there is an equivalent of ~$35 USD per person in bicycle revenue in Norway. This compares favorably to the ~$24 USD per person in the US.
Surprisingly, many bicycles are similarly priced between the US and Norway right now due to the current exchange rate. This will inevitably play a role in sales estimation. We have to also adjust for the proportion of bikes that we think will be from adult vs children’s bikes, as the US is surprisingly good at selling children’s bikes. Using a revenue ratio of 60% and an ASP of ~6,500 NOK ($600) brings us to an estimate of 185,000 bicycle units in 2023.
