2023 Bicycle Industry Trends Review
Human and AI generated analysis of what happened in cycling in the past year
Disclaimer: all images have been generated with the Canva Magic Studio AI with three prompts or less.
It’s a week into the new year and we’ve seen a few predictions for the cycling industry in 2024 already. But before we have a look at them and share our insights, let’s take a moment to see what happened in 2023. At the start of the year, I published a LinkedIn post with a few ideas of what trends might be leading the industry in 2023.
A link to our post about trends in the cycling industry for 2024 will be added here shortly.
Same procedure as every year - Let's ask ChatGPT
If you don’t care about what ChatGPT has to say about trends in the cycling industry, you can continue reading from the next headline onwards.
In that post, I first asked ChatGPT to see how well the AI knows the industry and could help in navigating market trends. To be consistent with last year, I am using the free version with the prompt “What were the trends in the cycling industry in 2023?” this time again. However, we also have access to the paid version, and have added the additions in grey at the end. Here are the results:
- Rise of E-bikes: Electric bikes continued their upward trajectory in popularity. Improved battery technology, longer ranges, and more powerful motors made them appealing for commuters and recreational riders alike.
- Sustainability Initiatives: The industry increasingly emphasised sustainability. Manufacturers focused on using eco-friendly materials, reducing waste during production, and promoting recyclability in bike components.
- Integration of Smart Features: Bicycles incorporated more smart and connected features. This included GPS tracking, fitness monitoring, and safety features like collision detection and automatic signalling.
- Supply Chain Challenges: Like many sectors, the cycling industry faced supply chain disruptions, affecting the availability and pricing of certain bike models and components.
- Safety Emphasis: There was a heightened focus on cyclist safety. Advocacy efforts aimed at improving infrastructure, such as protected bike lanes and initiatives to enhance road-sharing practices between cyclists and motorists, gained traction.
- Innovative Materials and Design: Advancements in materials science led to lighter, stronger, and more aerodynamic bike frames. Manufacturers explored unconventional materials and designs to enhance performance.
- Urban Mobility Focus: Cities worldwide invested in bike-sharing programs, expanded bike lanes, and implemented policies to encourage cycling as a sustainable mode of urban transportation.
- Online Retail and Customisation: Online bike shopping continued to grow, offering increased customisation options. Virtual tools and augmented reality assisted customers in selecting the right bike and accessories.
- Gravel Bikes Growth: Gravel biking, which combines elements of road and mountain biking, saw a surge in popularity. This led to increased sales of gravel bikes, known for their versatility and durability in handling different terrains.
- Indoor Cycling and Virtual Training: With the lingering effects of the pandemic and the rise of smart home fitness equipment, indoor cycling and virtual training platforms continued to be popular. This trend was marked by advancements in interactive training software and smart indoor bikes.
- Adventure and Bikepacking: Adventure cycling and bikepacking gained traction among cyclists seeking off-the-beaten-path experiences. This led to the development of specialised gear and bikes designed for long-distance travel and self-supported trips.
- Health and Fitness Awareness: As health and fitness awareness rose, more people turned to cycling as a form of exercise. This trend was also fuelled by community events and campaigns promoting cycling for physical and mental health benefits.
- Youth and Inclusivity Initiatives: Efforts to make cycling more inclusive and accessible to diverse populations, including children and underrepresented groups, became more pronounced. This involved community programs, educational initiatives, and inclusive events.
If I remember correctly, this is pretty similar to what the bot predicted a year ago. Most of these are pretty generic, but to be fair, we didn’t ask any further. The biggest difference I could spot is the mentioning of inclusivity initiatives, but this is a post and topic that deserves its own analysis. Another point that stands out is the description of the supply chain disruptions. Anyone that has to do anything with the industry knows that effects on “the availability and pricing of certain bike models and components” is a bit of an understatement. So let’s dig a little deeper and check out the human analysis.
The liquidity game
Unfortunately, the prediction of “evidence suggests that a full blown bullwhip effect is now going to turn the tables – where there were shortages, suppliers and manufacturers along the supply chain now have overstock and full inventory” became true. Businesses along the supply chain struggled. While some made it through by the skin of their teeth, others – including well known names – had to close doors. We are not going to go through them again, there is enough content on insolvencies already.
Customisation vs Standardisation
Honestly – we don’t have enough data points on this one. In some conversations, we heard that portfolio analysis, especially in the light of liquidity challenges, has been made a priority to eliminate non-performing elements and focus on the cash cows. Together with the fact that the model year 2024 was almost completely skipped, it could be assumed that the focus in the past year was on manufacturing what’s known to work.
At the same time, many brands now feel the pressure to differentiate themselves on a market that is contracting. This could lead to more requests for custom components and colours. Pair this with manufacturers and assemblers struggling to keep capacities utilised to avoid layoffs and idle machines who are now more open to take on any kind of requests, and we might see a move away from standardisation. The question is if this is in the name of true innovation and comes as a benefit for the customer, or if it makes using and maintaining new bikes and components harder.
Supply chain relocation
This is also a tricky one to analyse, as we’ve seen multiple contradicting trends. From conversations we’ve had with industry experts, we’ve heard that especially Asia-based component and contract manufacturers are looking to open a headquarter, warehouse or smaller production on European ground to offset some of the possible supply chain disruptions. With the recent incidents in the Red Sea and container prices rising again, this topic is flaring up once more. However, in light of tight budgets, challenging liquidity situations and decreasing margins, we’ve also seen manufacturers closing down factories in Europe. Some simply move from a high-cost country in Europe to a lower-cost country, others are moving the entire production to the Far East.
What is safe to say is that supply chain disruptions, whether they are political, environmental, or social, are becoming the norm, and every company in the supply chain needs to identify strategies and tactics to navigate them. Whether that’s closer-to-customer production, a multi-supplier-strategy, or further vertical integration depends on the business model, capacities, and cash situation.
Electric and Cargo Bikes
I guess this one wasn’t so difficult to predict. The trend for increasing demand for e-bikes has been around for a while. What will be interesting to see when the sales data is coming out is whether 2023 has been the year where e-bike sales in Europe have taken over mechanical bike sales.
The bigger surprise – at least for me – was the development in the commercial cargobike segment. With CitKar being taken over by Mubea, and Antric being bought by Centro, two of the biggest heavy-duty producers in Europe have been merged into other companies. This contraction of the market probably makes sense in an environment where institutional investors kept their wallets close to their chest and hardware companies struggled even more to attract financing. In addition, we have to face the truth and admit that the hockey stick growth, until now, has been wishful thinking. While the market data provided by ZIV and RLVD (p. 26) on commercial heavy-duty bikes has been positive, investors are looking for even more growth. It begs the question whether VC money is the right approach for this segment, but that’s a topic for a different time. We did start the analysis by asking if micromobility is dead. But in general, the buy-outs came earlier than I expected.
Next Big Thing(s)
Last year we called out for sustainability, circularity, transparency and traceability to be the next big thing(s). While all of these have been part of industry discussions, they haven’t been anchored in the industry as much as we predicted. I believe this is mainly due to the ongoing liquidity game, the decreasing margin and contraction of demand. On top of handling excess inventory, the industry is struggling to dedicate budget to sustainability initiatives who at the start are only costing them money. Whether that’s the right approach is a different question, and – just like relocation – depends heavily on the business model, capacities, and cash situation. Our 2024 analysis will go deeper into our view on this matter, but you can imagine that we strongly believe that investing in this topic now will not only help companies spearhead these topics and create strong USPs for their products, but means less investment in the future and overall.
Challenges always provide an opportunity for learning. It was, is, and will be tough for the industry in 2023 and 2024. So what we are left with is asking ourselves: “Can we find a silver lining? What are the learnings we can take from the past 12 months, and how have they shaped our work and business?”
