Tag: Ebike

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Australian Used / Second Hand Bicycle Sales

This blog post will analyze 14 months of data on peer-to-peer marketplaces showing second hand bicycles for sale from September 2023 through October 2024. The data has been collected directly from marketplaces, and represents a fairly unique view of used bicycle markets. The primary other research into this area is our project with People For Bikes in the United States, which will be expanding to trade-in platforms this month. To see data about the USA, reach out to People For Bikes, or send me an email.

High level market view

Overall, we observed ~150,000 bicycle units sold on peer to peer marketplaces over the past year. These marketplaces include eBay, Facebook, and Gumtree. As can be seen above, this fall is experiencing greater sales than 2023. Keep in mind that the Australian cycling seasonal curve is roughly the opposite of the North America and Europe, with peak season in December.

Interestingly, new inventory listings do not follow the same curve as sales. In the same 12 month period, ~312,000 units were listed for sale, suggesting a 48% sell through rate. Some people will wonder what happens to those other bikes. It is important to keep in mind that these are peer-to-peer marketplaces where nearly all sellers are individuals not acting as a business. This is crucial because and individual holds a certain utility value in the bike. That is to say, they could ride the bike, save it for a friend, or otherwise use it. Additionally, since this is not their primary source of income, they are less likely to overcome transactional friction. If it is too difficult to sell, or the price is too low, they may simply keep it in their garage.

The above chart shows how new listings do not follow the same seasonal trend as sales. In fact, there has been a slight downward trajectory for inventory listing units. One of the big reasons for the discrepancy is the different incentive reactions between buyers and sellers. As the following chart shows, prices have fallen more than 25% over the past year. Simple economics would predict that more buyers would be attracted, while sellers would be dissuaded. And that is exactly what we are seeing in the Australian Market.

Categories and Marketplaces

Above we see how dominant Facebook Marketplace is in the Australian market. Neither Ebay, nor Gumtree are able to compete to any substantial rate. This is due to the lower transactional friction in listing on Facebook. According to NapoleonCat Statistics, nearly 83% of Australians have a Facebook account. This makes it very easy to list on the platform by skipping the sign up step. Secondly, the platform does not currently charge a transaction fee. In many ways, this is a help. However, eBay has carved out a niche by offering more premium road and Mountain bikes where the transaction fee acts as a filter for legitimate buyers and sellers.

Next, if we look at the distribution of inventory units by category, we can see that the largest group are bikes listed in a generic fashion. These are listings where the title does not give away the type of bike, such as “Adult Bike” or “Bike for Sale”.

The major emerging category in the world of bicycles are electric bikes. Since data of retail sales in Australia is majorly lacking, we can look at the share of bicycle units in peer to peer marketplaces as an indicator of the sales over the past few years. The pie chart below shows that Australia is lagging behind most European countries at only 12.4% of units. Some research I have done on US imports indicates that in the US close to 20% of adult bikes are electric.

If we adjust our figures and ignore children’s, BMX, unknown, and generic categories, the figures look decidedly different. Looking below, listings exceed 22% and sales are just over 29% of total units. Most likely this is an over estimate of the actual consumer share of bicycles. Nonetheless it serves as an informative look at how many Australian cyclists are riding electric bikes.

Below left we can see the overall distribution of prices for electric bikes on these platforms. Clearly low price points are favored. However, this histogram is not that useful at this wide view, so below right we can see the breakdown of prices below $1,000. Here we can see a much more linear relationship between price and listing volumes. There are some notable bumps below $100, around $500, and around $750. These specific price points are likely to be anchored by consumers on common round price points thought to be preferred.

Below we can see that while listing prices have fallen throughout the year, just like the broader market, selling prices have fluctuated seasonally at a stable trend. The bottom right chart helps to explain this where we can see the gap between listing and selling average prices has contracted. The 50% variance at the beginning of the period was exceptionally high, indicating that consumers of second hand bikes are more interested in lower prices, while sellers expected higher prices. The ending 35% variance is more in line with other markets observed.

How large is the Australian second hand bicycle market?

This data shows that the Australian peer-to-peer online marketplaces generated around $12 million AUD over the past 12 months. Depending on the amount of sales of second hand bikes by retailers and in person swap meets, the total second hand market in Australia is likely under $30 million AUD. However, we do not have any data for retail sales, nor in person sales, so we would need to differ to experts in the Australian field to make those extrapolations. Nevertheless, the $12m peer to peer sales can serve as an anchor for further discussions to define the total market size and composition of the Australian bicycle market

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US eBike Import Data January 2024

January Ebike Imports

2023 was a rough year for bicycles overall, and the general consensus was ebike sales fell ~10% from 2022. Looking at import data for January of each of the proceeding years, we see 2024 fall ~7.5%. This makes sense, as imports are a trailing indicator of sales performance. When brands sell more, they tend to increase their purchasing, and subsequently their imports. Since the bicycle market is experiencing the ups and downs of the COVID-19 bull whip, the imports we see in 2024 are likely to represent the sentiment of brands 3-6 months prior, when sales outlook was pretty dismal.

Looking forward, we expect imports to fall below 2023 in H1, with a potential right sizing in H2, depending on sales performance and holiday sales expectations. Looking at unit share of ebikes to traditional bikes, we can see the data continue to approach a stable point. With falling imports to start the year and hesitancy by brands, we expect 2024 to pull downward on the long running trend.

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How do brands sell their bikes?

One of the projects in our road map is to develop a global view of all of the bicycle brands competing for consumer’s attention. A consequence of this is that we get to shed light on how different brands choose to distribute their products. We’ll begin with a brief look at the US market, then pivot to show the contrasts in the Australian market.

The chart above shows just how many brands are competing in the US via DTC approaches. Keep in mind that this is the number of brands, not how many units they sell. 80%+ of the more than 900 brands in the US bicycle market sell bikes direct to consumer. Whoa, that’s a big figure! Compare that with 44% in IBD and 21% in ROM. That’s a lot of jargon we threw your way, so lets pause here and define them.

  • IBD – Independent Bicycle Dealers. These are what most people would think of as a bike shop. For the purposes of our data, we include all bicycle dealers, whether they are owned by a bicycle brand or by a local entrepreneur.
  • ROM – Rest of Market. This has been defined by the Circana (formerly NPD and Leisure Trends) as mass merchants, Amazon first party, and online retailers.
  • DTC – Direct to Consumer brands sell their bikes directly from their owed websites, with physical inventory in the united states.

Naturally, this leads to the question of how large each of these markets are in total bike units and dollars. People For Bikes is the best source for this information. They provide their members with access to aggregate Circana data on IBD and ROM. Our company, Bicycle Market Research, has been working with People For Bikes to develop DTC and Second Hand bicycle market monitors in order to clarify how large these previously unknown segments are. In her 2024 overview, Jenn Dice, People For Bikes’ CEO announced plans to release some of this data in 2024. So stay tuned, and become a member if you’d like to benefit from greater insights into the US market.

Next, lest pivot to the Australian market to show how a much smaller market compares in their distribution.

Serving the ~ 25m population of Australia are 230 distinct bicycle brands. Although this is small compared to the 900+ brands in the US market, it does represent a brand to population ratio. In the US, there are ~300,000+ residents for each brand in the country. Australia is less than half of that at ~110,000 residents per brand. This makes competition between brands more challenging.

Looking at the Venn diagram at the top of this article, we see the channel distribution choices made by Australian brands. Here we have grouped IBD and ROM into a Retail category. Overall, 31% of brands choose to distribute via the Direct to consumer channel, while 85% distribute through retail. These ratios hold steady when we filter for brands selling electric bikes. These ratios are dramatically different than seen in the US. If we look at the breakdown by category below, we can see some strong differences between DTC and Retail markets in Australia.

While ~60% of brands offer electric bikes, regardless of channel, this diverges with Road and Mountain bikes. Here, traditional retail is much more likely to offer these bikes than DTC brands. This continues to a lesser degree in other categories. As most would guess, only a small portion of brands offer folding bikes. What was a surprise is how few brands offer kids bikes. This is because there is a long tail of specialist brands who focus on one area of the market. Those would offer a wide array tend to be more established and likely take a large share of the kids bike unit sales due to their better brand representation.

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Import Data – November 2023

Overall, shipping manifests indicated an increase in imports for both traditional and electric bikes in November. This resulted in a strong rebound from the October lows. However, the trend for H2 2023 is declining imports in traditional bikes, and a flattening import curve for electric. Heavy discounting during the early holiday season indicates there continues to be inventory pressure on brands.

The chart above shows shipping manifest data and compares data from the US ITC Import Duties records for Adult bicycles. Although certainly not perfect, for 2023, the two sources are fairly well correlated. This supports some use of shipping manifest data to provide another indicator for business activity in the bicycle market. With that said, import data should be considered the source of truth, as it relies on reporting by brands, with legal responsibility, rather than using heuristics alone. If the HTS code system is ever expanded to included electric bicycles, we will include that data on this cart to show how it compares to the rest.

The share of electric bikes mentioned in shipping manifests continues to be strong, pulling up the power series trend line above 20%. As we finish off the 2023 holiday season and enter the historically quiet Q1 winter, it will be interesting to see how imports shift, particularly when comparing traditional to electric bikes.

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Yelp and Bike Shops

Map of US states with Average Yelp rating of bicycle businesses

Coming from a background in brick and mortar retail, Yelp has been an omnipresent consideration since they rose to the top of review sites. Many retailers complain about the challenges of working with reviewers, and the semi-opaque rating system. As I’ve pivoted to focus on the data side of retail, I became curious what data there is to substantiate or refute some of the claims of retailers. Thankfully, Yelp provides a well documented API for interacting with their services.

Methodology

After signing up for Yelp’s API access, I was able to check for batches of bike shops in cities around the country. Overall, I checked the top 1,206 most populous cities in the country, looking for the key work “bike shop” within 25 miles of the central coordinates. By approaching it this way, there is a lot of overlap, so I then filtered for duplicate listings.

However, since in the US, Yelp’s categorization does not break out bicycle shops as a dedicated category, I looked in the general “bicycle” category, with the stated keyword. In total, I found 7,654 unique listings. There may be some businesses operating multiple DBA’s, but the total number is close to the figures reported by Georger Data Services of the number of bike shops in the US.

Insights

Within these numbers, we can see some interesting niches within their names:

  • 261 references of rent or demo ( 3.4% )
  • 73 references of tour ( 0.9% )
  • 179 references of repair or service ( 2.3% )
  • 480 references of ebike, e-bike, or electric ( 6.3% )
  • 53 references of mobile ( 0.7% )
  • 163 references of Pedego ( 2.1% )
  • 289 references of Trek ( 3.8% )

Overall, most of these businesses are highly regarded on yelp, with nearly two thirds of shops being rated a 4.5 or 5 stars. If we bring in rating of 4, we exceed 80% of all businesses. This flies somewhat in the face of conventional wisdom that yelp is challenging to navigate with customer reviews. Very few shops are rated at the bottom of the yelp scale (2.5 or below). Overall, this shows an alignment between the consumer perception of the importance of these ratings to businesses, and the scores that are used in these calculations. It should be noted that Yelp does have a business friendly policy when it comes to removing listings. In particular, references to employees individual names often fall under their privacy guidelines.

Ratings by State

The following map shows the average rating of these businesses around the country. Originally, I had the lower bound in red, but when this turned out to only be slightly below 4.0, it felt disingenuous to show it in red, as it might mislead people to think they are worse than they are. Nearly all states fall within a narrow range between 4.2 and 4.4. The outliers below 4.1 and above 4.6 generally have lower numbers of bike businesses, indicating that as the number of businesses increases, the average rating regresses to the national mean.

Overall, it seems that Yelp can be a good source of finding bicycle businesses in the United States. In addition, most of these businesses are highly regarded on the platform, with only limited outliers. For the genuine frustrations that retailers feel with ratings systems like Yelp, they may not deserve the villainous light that people often cast on Yelp. At least not in aggregate.

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Import Data – October 2023

October saw declines in both electric and traditional bikes in US shipping manifest data. This is a normal seasonal decline that lines up with holiday imports. Any new imports in October and November will need to be rushed through supply chains, so most brands aim to have imports arrive at ports in September.

However, as seen below, electric bike imports have seen less of an import bump in 2023 compared to 2022. This is likely due to headwinds in 2023 for general bicycles, which has affected electric bikes in tern. The downtrend in imports we are seeing in Q4 is likely the result ordering decisions made in Q1/Q2

Even with the declines in electric bike imports, the substantial declines in traditional imports has allowed the ratio of electric to traditional imports to maintain above 20%. As a reminder, this figure provides a ceiling for the maximum ratio of imports of electric to traditional bikes. It is likely lower due to many small children’s bikes being imported in bulk packages, without internal quantities disclosed in shipping manifests.

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Import Data – September 2023

Autumnal increases in ebikes

The chart above shows monthly imports of ebikes comparing the last two years. We can se there is a seasonal increase in units, which declines as we move into Q4. This is likely to be in anticipation of holiday sales, as it may take a bit of time for the products to work their way through the supply chain within the united states.

A note on specific import quantities

When comparing our dataset to data from the USITC tarrif data, there are notable differences. 2023 H1 data matches well at ~1.4m units, but 2022 H1 data is divergent quite a bit. As reported in Bicycle Retailer and Industry News, average bike prices jumped 60% in H1 2023, indicating that the bikes imported last year were of lower value (~$140/bike). Many of these bikes are likely to be smaller children’s bikes, which are easier to group together into bulk packages. Although we can expect that most brands will report accurate bike quantities to government authorities, they may only report bulk grouping quantities on shipping manifests.

Rebounding Traditional Bikes

Last month we reported on a precipitous drop in traditional bike imports due to a major importer pulling back. This number has rebounded slightly to similar levels seen in January. However, this drop combined with the gains seen in electric bikes have pushed the monthly ratio to 27% electric bikes. Traditional bike imports YTD appear to be up slightly at 1.3% in our data set

MonthElectricTraditionalElectric Import Share
Jan 202350,560179,67822.0%
Feb 202346,132205,90718.3%
Mar 202335,999195,36815.6%
Apr 202337,656216,02814.8%
May 202331,613272,57610.4%
Jun 202352,733253,82317.2%
Jul 202356,053311,86915.2%
Aug 202355,290156,10626.2%
Sep 202371,348192,33327.1%
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Public Company Reports – KMC Chains – Q3 2023

KMC Revenue vs High End Ebike chain shipments

In this series, we will explore what insights can be gained by reviewing public company disclosures and results. We’ll focus on the indicators that provide the most insight into the broader market. Naturally, these documents are written with the intent of communicating an individual company’s performance and there is a base level of bias to be aware of. However, as will be seen, we can still find quality indicators in the data.

Introduction

KMC (Kuei Meng) International Inc. is the self claimed largest chain manufacturer in the world. In this post, we will explore their investor disclosures, which can be found on their website. Their primary business line is bicycle chains, which accounts ~75% of their revenue, with Auto, Motorcycle, and Garage Door units accounting for the remainder.

Within bicycles, they sell both through OEM channels for new complete bicycles, as well as aftermarket replacement chains. These two distribution channels represent different places in the market. OEM sales are much farther up the supply chain, as they are a production input to complete bicycle manufacturing. As such, this business unit is likely reflective of lagging demand from bicycle brands. We say lagging, because orders will slow from bicycle brands when they see demand from their consumers falling, relative to their inventory levels, resulting a slowing of orders to OEM bicycle assemblers, and in turn a slowing of input demand. On the other hand, aftermarket sales are a more direct measure of end consumer demand. This division sells both direct to consumer, and through bicycle retailers.

Bike Sharing

From 2017 through 2022, KMC tracked sales into OEM bike sharing partnerships. This was during the aggressive boom times of bike sharing expansion throughout the world. Many of us in the industry are aware how this story played out with bicycle graveyards of discarded bike-share bikes showing up around the world. Large capital investments pushed supply up substantially, while downstream obstacles, such as competition and local regulations slowed efficient utilization. As a result, many of the aggressive players in the market have pulled back, leaving a more stable and established landscape for this channel.

As seen in the above chart, bike-share was a significant source of demand for KMC for four years. However, in line with the general fervor surrounding the bike share boom, this appears to be more representative of a short term supply push, rather than a long term sales channel. KMC, being the largest manufacturer of chains is likely to be a bellwether for the bike share segment. Does this falling supply indicate that bike share has failed in general? We don’t think so. We see this chart as demonstrating that the wasteful oversupply of has subsided, and this market channel can resume stable growth.

Internal Inventory

The chart above shows quarterly inventory snapshots since 2019, when KMC first started including the data in their quarterly reports. In 2022, they only reported inventory as a year end number, so we assigned that amount to all quarters in that year.

It is interesting to note that the overall inventory is pretty stable given the substantial inventory swings in US wholesale inventory throughout the pandemic. This may be a reflection of the quality of KMC’s management, supply flexibility, or may hide some product mix challenges due to its aggregate nature.

At Bicycle Market Research, we have tools to infer inventory and sales data from some individual web pages. Using this proprietary technology, we took a snapshot of kmcchain.us, which implies roughly 680,000 units and ~$2.8m in US inventory if assuming keystone margins at landed cost. This gives us a reasonable idea of their US aftermarket relative to the global reach of KMC overall, at roughly 8% of current inventory holdings. This business is smaller than OEM, but has higher gross margins for KMC as their quarterly reports have indicated.

Ebike Premium Chains

KMC has published reports on High End Ebike chains for nearly a decade now, which gives us a unique view on the global growth of the ebike market. We should note here that hub driven ebikes do not benefit from a premium chain, as their torque is not translated through the chain. In stead, all of their torque goes straight into the wheel and tires. However, mid-drive motors, which are prevalent in many higher end ebikes, do benefit from added chain performance. As such, the following charts are indicative of the global mid-drive ebike market.

The dramatic chart above shows a substantial slowdown in these premium ebike specific chains. Although most of the bicycle industry is bullish on ebike growth globally, it may be that oversupply of premium ebikes has led to cut backs in orders from brands. In addition, the pandemic induced purchasing by bike shops may have left the aftermarket channel similarly saturated with product.

As we can see from the following chart, although premium ebike chain sales contribute significantly to KMC’s overall sales, they are not perfectly coupled. The pandemic induced purchases from KMC started in early 2020, while the most significant growth in premium ebike chain shipments did not take off until 2022.

In our opinion, we expect KMC overall quarterly revenue to reach a local minimum in the coming quarters and subsequently stabilize in 2024 in line with a market recovery predicted by the People for Bikes S&P Global quarterly report. In addition, we expect high end ebike chain shipments to continue trending downward, with a lagging recovery by one quarter to return to the longer term growth trajectory seen prior to 2022.

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Import Data – August 2023

August import data showed Electric bikes remaining flat at -1% over July, while the average month over month variation since 2019 was 7.6%, and a standard deviation of 20%. Those figures are simply to point out that a small fluctuation in the fat of 1% is in itself unusual. This is further punctuated by the dramatic drop off in traditional bicycles where we are seeing a drop of 49.95% over July. Naturally, this required some investigation. I double checked there was not an issue with the data export, then started looking for which brands may be most highly correlated with this drop off.

These three brands topped the charts by volume, with Huffy by far leading the way. Of course, there are a lot of other brands moving, but they net out to nearly 0 compared to the shift seen from Huffy. Dynacraft showed up only in July, then dropped off. There are some heuristic improvements we can make to fine tune the model in order to identify brands more specifically. However, this data still serves as a valuable indicator of movements in the US bicycle market. An additional interesting trend seen when finding this data is from the three largest brands by retail value, Giant, Trek, and Specialized.

It is important to note the scale that we are comparing, where huffy imported 100,000+ bikes in a month, these three are showing much lower, at less than 5,000. Again, the specific number is not precise, due to the nature of the method used for gathering the data. Clearly, however, Specialized has had many more imports though Q2, while trek has either flown under the radar, or imported very little this year. NOTE: Electra does not show up in the data as a sub brand of Trek.

Electric Bike ratio

Due to the drop in imports of traditional bikes, the ratio of ebikes jumped, but still tracks at a rolling average of 20% of unit imports. The trend of 50,000 units per month has held pretty stable, and is the same rate of imports in 2022. The stability of these imports may reflect a general bullishness on the ebike category.

MonthElectricTraditionalElectric Import Share
Jan 202350,560179,67822.0%
Feb 202346,132205,90718.3%
Mar 202335,999195,36815.6%
Apr 202337,656216,02814.8%
May 202331,613272,57610.4%
Jun 202352,733253,82317.2%
Jul 202356,053311,86915.2%
Aug 202355,290156,10626.2%
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Import Data – July 2023

Import Data of Bicycles and Ebikes parsed from Shipping Manifests enterin the US via ocean freight

July saw shipping manifest data for both traditional and electric bikes increase. The larger increase in traditional bikes is reflected in a decreased share of ebike imports at 18%, though still in line with the annual trend of approximately 20%. Also of note is that both categories of bikes hit their peak import level of the year. This makes sense in a historical context as it typically coincides with peak bicycle sales a retail.

MonthElectricTraditionalElectric Import Share
Jan 202350,560179,67828.1%
Feb 202346,132205,90722.4%
Mar 202335,999195,36818.4%
Apr 202337,656216,02817.4%
May 202331,613272,57611.6%
Jun 202352,733253,82320.8%
Jul 202356,053311,86918.0%
Shipping Manifest Import Data by Month 2023

This data falls in line with the annualized information presented by Steve Frothingham in Bicycle Retailer and Industry News. The article is full of interesting information and insights. The data used for that report is more precise than the shipping manifest data we present here, but almost entirely misses electric bikes, due to the way they are categorized.

A recent webinar hosted by the NBDA had Bob Margevicius, Executive Vice President of Specialized Bicycle Components, on to explain some of the supply context. In the webinar, Bob referenced how the product we are receiving now into the US were ordered upwards of 12 months ago. Since then lead times have plummeted, but it will take some time before we will see a normalization of supply. He pegs the inventory in the US at ~14 months worth of sales.