The Covid-19 pandemic has been bad for nearly everyone and everything, and its ultimate consequences for the global economy cannot be measured yet. But it will be bad, probably very bad. But not for the bicycle industry.
According to a survey of nearly 1,000 U.S. adults by the PeopleForBikes cycling advocacy group, 9% of American adults say they rode a bike for the first time in a year because of the pandemic. And a majority of those riders say they will continue riding after lockdown orders are lifted. And roughly 42% of those “reactivated” riders have children, which means more cycling by more people.
With many youth sports programs cancelled because of the epidemic and with schools closed or restricted in some countries, cycling is one of the few safe outdoor activities kids of all ages can participate in.
In addition, many adults are shunning public transport because of the fear of infection and are using bicycles to commute or carry out daily tasks, because cycling keeps them fit and because of environmental concerns. The Canadian engineering company Eco-Counter, which designs and provides bicycle counters and analyses their data, measured a 21% increase in U.S. urban-area ridership from March through mid-June 2020 compared with the same time period in 2019.
It is very likely that this is not a one-off trend that will end when the pandemic has been defeated and life returns to “normal”. The U.K. personal finance comparison site finder.com found that 87% of British residents plan to maintain or increase their spending at bicycle shops compared to pre-lockdown levels.
So it should be no surprise that, according to an analysis of the bicycle industry, “Bicycles – Global Market Trajectory & Analytics,” the global market for bicycles is now estimated to expand from $29.2 billion in 2020 to $34.6 billion by 2027, growing at a compound annual growth rate (CAGR) of 2.4% in that period. This figure, like most of the others, has been revised upwards as a result of the pandemic.
Compound annual growth rate, or CAGR, is the rate of return that would be required for an investment to grow from its beginning balance to its ending balance, assuming the profits were reinvested at the end of each year of the investment’s lifespan. It is the best formula for evaluating how different investments perform over time. And investments in cycling will perform very well over the next few years.
For example, the Chinese bicycle market is forecast to grow at a CAGR of 4.7% (or twice the global rate of growth) through 2027, to reach an estimated market size of $6.9 billion.
The report estimates that the European market will also grow to an estimated $6.9 billion by 2027, with the large and well-established German market to grow by 1.1% CAGR. Other growing bicycle markets are Japan and Canada, forecast to rise by 0.5% and 1.8% respectively.
In terms of bicycle market segments, hybrid bikes are projected to grow the fastest globally, at a 3.1% CAGR, to reach $13.6 billion by the end of 2027. Growth in the road bicycle segment – which today accounts for a 20.7% share of the global bicycle market – is projected at 1.7% CAGR for the next 7 years.
The MTB segment is estimated to grow from the current $3.3 billion to $3.8 billion in 2027, a CAGR of 2.1%. This growth will be driven primarily by the U.S., Canada, Japan, China and Europe.
This is all a complicated way of saying the obvious, that the global bicycle market, already expanding before the pandemic, has received a shot in the arm by Covid-19. Not everything has been wounded by the coronavirus. That’s a very faint silver lining in a very dark cloud – but it’s better than nothing.