Pandemic's effect on Europe's bike industry - Show Daily

Pandemic’s effect on Europe’s bike industry

In times of crisis and challenges, hard facts are in high demand. As a series of studies commissioned by Cycling Industries Europe (CIE) show, the European bicycle industry has done good business amidst the Covid-19 pandemic after some early hiccups. Supply lines issues remain the biggest worry, however.

The ongoing Covid-19 pandemic continues to keep the globalized bicycle industry on its toes: The combination of a significantly higher demand – some sources mention a growth of 30% in the global demand for bicycles, parts and accessories in 2020 – and ongoing disturbances both in the supply lines and logistics, with sea freight in particular disarray, have resulted in long lead times, massive backorders, serious issues in predicting delivery dates along the supply lines and unexpected price hikes even on already signed deals.

With its Covid impact study, Cycling Industries Europe (CIE) and the Sports Marketing Service agency aims to quantify the effects of the pandemic. Since all the data provided by companies from Europe’s bicycle industry are anonymized, CIE claims a high reliability for the results of its studies in March, May, September and at the end of 2020 and again after the numbers of the first quarter of 2021 were available. The most important findings of these studies show a couple of interesting trends and developments.

Based on turnover, the studies show that almost three quarters of the companies within Europe’s bicycle industry suffered substantial drops in March 2020, quickly followed by a recovery. At the end of the year, only 9 % of the companies participating in the studies reported a drop in turnover while 73 % reported growth. This recovery has been driven by high demand, even more so in B2C than in B2B channels, and it has continued into the first quarter of 2021.

According to the Covid impact studies, almost 60 % of the companies received some kind of government support, including emergency loans with favorable conditions, reduced rents or short-time working support. This support seems to have paid off as 53 % of the companies report an increase in staff throughout 2020 while only 16 % had to reduce the number of employees. On the other hand, 31 % of the companies in the survey said they planned to reduce spending in marketing and another 15 % to cut down on capital investments – despite the growth in turnover.

As everybody connected to or working in the bicycle industry knows all too well, not all has been rosy in the last 15 months. Given the interdependency of firms in the industry, the pandemic has been like a huge spanner in the works, affecting smaller suppliers just as badly as big players such as component maker Shimano. A massive 85 % of the companies in the survey reported serious supply chain issues in 2020, with suppliers from Far East being mentioned as part of the problem by 93 % of those companies. An aggregate 64 % of the companies reported significant or very significant challenges along their supply lines.As for an outlook into the next couple of years, the vast majority of European companies that participated in the studies are optimistic that the high demand will continue just as much as the increase of governmental investments in cycling infrastructure. The main worry within Europe’s bicycle industry is focused not on demand, but on supply lines: 86 % of the responding companies do not expect the current chaotic situation to improve within the next six months, with 43 % expecting these issues to continue for another two years and 22 % not seeing a solution at all to get the supply lines back on track.

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