Vosper: The e-bike model map is shifting
As a follow-up to final yr’s three-part collection on the e-bike panorama (out there here, here and here, respectively), I reached out to e-bike guru Ed Benjamin of eCycleElectric for an replace. Amongst different companies, Benjamin’s firm tracks e-bike imports to the USA for purchasers within the bicycle, e-bike, car, bike, and e-bike tools industries. These imports enter the nation below greater than a dozen HS numbers (Division of Commerce import codes), which calls for lots of data-crunching and interpretation.
It is wonderful how a lot has modified in only one yr.
For one factor, whereas imports of pedal-only bikes essentially tanked in 2019 over market pressures and worry of restrictive tariffs, e-bikes had been booming. However as a result of e-bikes aren’t counted within the bicycle import knowledge, that increase went largely unnoticed by trade observers.
Final yr, Benjamin estimated 2019 e-bike imports would develop to 300,000 items. This yr, his adjusted numbers for 2019 come to 287,000. “The advantages of e-bikes merely outweighed the tariff issues,” he concludes. For 2020, manufacturing facility closures and reopening points over the coronavirus make it unattainable to say with accuracy, however he forecasts shipments may attain 400,000 items.
Client selection is rewriting the e-bike panorama
The one greatest piece of reports, Benjamin says, is that “By 2019, the biggest share of imports had shifted away from a handful of firms who offered primarily by Amazon below numerous manufacturers. As an alternative, the majority is now going to consumer-direct e-bike specialists, brick and mortar e-bike specialists (EBDs), and traditional bicycle manufacturers within the IBD channel.”
“People have proven us within the final yr that they perceive and are keen to pay for the worth in a greater e-bike.”
Reasonably than distribution channels, Benjamin says, it could be extra helpful to categorise e-bikes by value level. For certain, there are nonetheless bargain-bin fashions being offered on Amazon, however these are a fraction of what they had been only a few years in the past. “People have proven us within the final yr” Benjamin explains, “that they perceive and are keen to pay for the worth in a greater ebike.”
This can be a enormous shift and one which’s driving the growth of different channels. “So we see the $1,500 to $3,000 value level is de facto taking off. The foremost bicycle manufacturers with IBD distribution have gotten increasingly highly effective, each as a result of they’ve higher (and subsequently costlier) merchandise and by advantage of their distribution and repair networks.”
That is excellent news for conventional bike outlets, however they’re nonetheless simply the tip of the e-bike iceberg.
Breaking it down even additional, Benjamin agrees the market falls into three primary price-driven classes. “The underside value area of interest is consumer-direct gross sales by Amazon, for properly below $1,000,” he says. “However these bikes are often unsatisfying.”
Shifting up from there’s the worth level of roughly $1,500 to $2,500. Above $2,500, and stretching all the way in which as much as $10,000 or extra, is the place the vast majority of IBD manufacturers play…however not all, as we will see.
5 market-leading e-bike manufacturers
Based on Benjamin, the 5 main e-bike manufacturers (in no specific order) are Rad Energy, Pedego, Trek, Specialised, and the Alta Group — Raleigh, IZIP, et al. These 5 collectively take pleasure in about 70% of the entire e-bike market in 2020. (The rationale for together with all Alta manufacturers as one is just because that is the way in which the import paperwork are labeled; no additional breakdown is feasible.)
Trek and Specialised, in fact, are well-known to BRAIN readers and fiercely aggressive, with respect each to one another and different gamers available in the market. However I needed to know extra concerning the different manufacturers, particularly their goal audiences and gross sales methods.
“We’re used to rising by 30-40% per yr and instantly it is triple digits,” stated Pedego’s founder, Don DiCostanzo. “Fortuitously we’ve got good management of our provide chain. Ninety p.c of our bikes are from Vietnam, and the provision is regular, so we’ve got stock. No person can preserve 3–4X stock in inventory, however we attempt to sustain.
“Our buyer is radically totally different than the IBD buyer. It is individuals who do not consider themselves as cyclists. They suppose Schwinn is the most important model within the U.S., and so they’ve by no means heard of Trek, Specialised, or Large. Our buyer is that different 85-90%, and that is the broader, greater market.”
We now have 5 profitable manufacturers with a collectively dominant market share overlaying a myriad of value factors, goal audiences and distribution methods. This means much less a bunch of direct opponents than a “model ecology” of differentiated but efficient methods.
Alta’s chief industrial officer, Larry Pizzi, has a broader view of the market, which is becoming, as a result of his manufacturers promote in all three gross sales channels — D2C, EBD, and IBD. (A little bit of background: out of the acquisition from Accell Group N.V., Alta now owns Diamondback, IZIP and Redline, and has a distribution settlement with Accell on the Raleigh, Haibike and Ghost manufacturers for the U.S.) “We now have e-bikes in each a kind of manufacturers besides Diamondback right now,” Pizzi says, “and we promote vital numbers in e-bikes throughout all of them.
“Plenty of issues have modified within the final 9 months or so, and IZIP has a number of consideration. At increased value factors — above $2,000, say — a lot of the quantity occurs in brick and mortar, whether or not that is an IBD or EBD. EBDs within the U.S. are promoting about the identical unit quantity as our IBD community.
“The largest group of customers has been growing older child boomers,” Pizzi continues, “nevertheless it’s gotten lots broader as youthful customers search for transportation alternate options. The largest demographic is 45–65, and it tends to lean male. There’s a number of feminine participation in girls shopping for long-tail cargo bikes, too. That is was a major section, people who find themselves utilizing e-bikes to switch automotive journeys. It is also nice to see many hardcore cyclists wanting on the sooner Class-3 e-bikes and e-MTBs and pondering they’re fairly cool.”
Regardless of repeated calls and emails over a interval of weeks, a spokesperson for Rad Energy Bikes was unavailable as of press time. However Ed Benjamin sums up the corporate’s strategy this manner:
“Rad Energy is the grasp of consumer-direct web promoting,” Benjamin says. “Their buyer base is youthful and extra snug making large-ticket purchases direct. D2C is a good mannequin for them. The Amazon buyer is shopping for to see in the event that they just like the class; the EBD (though it is turning into extra of an electrical bike emphasis) is promoting into the broader neighborhood, and the IBD is promoting to its conventional buyer base.”
What’s most fascinating right here is that we’ve got 5 profitable manufacturers with a collectively dominant market share overlaying a myriad of value factors, goal audiences, and distribution methods. This means much less a bunch of direct opponents than a “model ecology” of differentiated but efficient methods, every suited to totally different audiences, channels, and value ranges.
If that’s the case, this e-bike “Quintumvirate” might find yourself being a extra secure association than the zero-sum, dog-eat-dog battle that presently characterizes the pedal-only market.
This model ecology notion may work equally properly within the pedal-only sphere, too. Maybe a method out of our present battle amongst kind of equivalent manufacturers and techniques can be for opponents to distinguish themselves by creating merchandise suited to a broader vary of biking customers and using kinds. And, together with a rising marketplace for e-bikes and the present “bike boomlet,” that could possibly be a really wholesome factor for manufacturers, for retailers, and for the trade as an entire.
Rick Vosper has been serving to firms within the bicycle enterprise resolve advertising issues since 1989. Electronic mail email@example.com for a free session.