Analysis of Bicycle Industry Trend

How is the development of the E-Bike market?

Under the multiple influences of technology, sharing, and global economic and trade reforms, the global bicycle industry has entered a critical moment of transformation. Taiwan’s bicycle industry, which has always had a competitive advantage, is facing the test of how to maintain its advantage. However, there are many innovations in the market. The participation of the Taiwanese bicycle industry brings new opportunities for Taiwan’s bicycle industry.

In recent years, electric bicycles (E-Bike) have become a topic of concern around the world. The increase in environmental awareness and the impact of the epidemic has both promoted the development of the electric bicycle market. In addition, in recent years, Taiwan’s E-Bike market shipments and exports have shown an annual growth trend.

Germany is currently the most mature market for E-Bike. The sales of E-Bike in Germany in 2019 was 980,000 units, which was better than the sales of 720,000 units in 2018. The annual growth rate reached 36%, which was the largest annual growth rate since 2015. And Germany consumers, are they willing to switch from traditional bicycles to electric bicycles?

Further, analyze the sales situation in the German market and examine the uses of consumers buying E-Bikes, of which 36.5% are used for travel, 33% are used for commuting between cities, and 25% are used for mountaineering. From this analysis, the European market’s popular lifestyle for outdoor sports and travel has driven the market demand for E-Bike.

According to European research institutions, there are different demand reasons behind the recent prosperity of E-Bike, including lifestyle, health, environmental protection, flexibility, etc., or people with disabilities can use E-Bike for rehabilitation and transportation flexibility and many more.

In recent years, major international automobile and motorcycle manufacturers have also started to compete in the electric bicycle market. Harley-Davidson and Volkswagen have also joined the market.
Facing the gradual slowdown in sales growth of traditional locomotives, various auto and locomotive brands have also invested resources, hoping to catch the electric boom and develop electric locomotives, electric bicycles, and so on.

The development of the sharing economy has also promoted the introduction of the bicycle market. It has been seen in the United States and Europe. It is optimistic about the value of electric bicycles as a means of public transportation in cities, especially when driven by issues such as traffic congestion and environmental protection. Under the circumstances, many automakers have also joined the market one after another.

Current status of Taiwan's bicycle market:

Taiwan e-Bike exports increase year by year. With the strengthening of Taiwan's bicycle brands in electric bicycles, Taiwan's e-Bike exports have increased year by year. According to statistics from the Bureau of Statistics of the Ministry of Economic Affairs, Taiwan's e-Bike is mainly exported to European and American markets. The export value of Taiwan e-Bike was 16.66 million US dollars in 2012 and reached 250 million US dollars in 2017, which is a record high. The proportion of direct export is as high as 96.4%. By exporting country, the main export market in the Netherlands, which accounts for 27.7%, followed by Germany with 19.8%, and the United States with 15.5%.

If you look at the market by continent, European leisure tourism is booming, coupled with the increase in the number of silver-haired people, driving high-quality, lightweight, and high-unit-price e-Bike demand continues to grow at a high speed. Therefore, Taiwan’s e-Bike exports to Europe currently account for 77.2%. Taiwan's largest export market. In 2017, the number of Taiwan e-Bike exports to the EU approached 130,000, an annual increase of 33.8%, the export value surged 83%, and the average unit price increased 37% annually. Germany is the second-largest exporter of electric bicycles in my country. As for Taiwan’s exports to the Americas accounted for 18.1%, while Europe and the United States accounted for 95.3%. It is worth noting that the Asian e-Bike market has taken off in recent years, and Taiwan's e-Bike exports to China, Vietnam, and other regions have continued to grow. The subsequent business opportunities in the Asian market are still worth looking forward to.

The future development direction of Taiwan's industry:

Taiwan is known as the "Bike Kingdom". The "Bicycle Island" built by the central government, local governments, and industries are well-known around the world; coupled with the successful experience of U-bike bicycle rental services, Taiwan's bicycle industry has moved from manufacturing to service. It shows the strong competitiveness of Taiwan's bicycle industry in the global market.

1. Electronic trend:
   

   Taiwan’s bicycle industry is mainly a part of manufacturing and product development. Some bicycle-related products and parts are also sold to Europe, such as Merida and Giant. Bicycles continue to increase production capacity and continue to expand the European and American markets. This shows that E-Bike will also be Development momentum in the next few years.

   In the future, variable speed bikes and E-Bike will develop in different directions, and the purpose of transportation or sports and leisure needs to be considered. Among them, from the perspective of transportation and E-Bike, endurance, power storage convenience, personalized requirements, and Internet of Things functions are all trends in the future.

   In the future, the E-Bike design side will develop in three aspects, including new materials, new manufacturing processes, new functions, etc., and even new consumer groups are the focus of discussion. In the future, the car body will combine somatosensory detection, Internet of Things, navigation, safety protection, etc., through the car body, accessories, clothing, etc., to connect people and bicycles more closely. For the bicycle industry in Taiwan, Taiwan also has semiconductor technology. For the future development of car bodies, integrating electronic design, how to integrate industrial technology will be the technical goal of the future.

2. Battery life and placement:
   

   Only 13% of people in Europe are willing to let others know that they use E-Bike. The main reason is that folk customs will be considered to have no physical movement. Therefore, in the development trend, bicycle designers will place the battery from outside the frame and change the design. Into the frame. At present, Taiwanese manufacturers such as Merida and Giant have placed the battery in the frame of some car models. In the future, the design of new car models will also be geared towards this demand. The design of its mechanism and changing the location of the battery will also require consideration of the design of other components. Coordination, including shock absorbers, gravity position, etc., are the keys that need to be overcome.

   In addition, to increase the penetration rate of E-Bike, battery life and the convenience of storage will also be the key. The current charging time is about 3~4 hours, and the storage space is 100~200 kilometers. Most riders think that more is needed. More charging stations, or increase the endurance, can increase the market share of the electric bicycle market.

3. The supply chain looks forward to directing and horizontal integration:
   

   In recent years, despite the help of E-Bike in the overall bicycle industry, the overall market is still affected by China's bicycle-sharing and trade wars. In 2018, Taiwan's bicycle industry still showed a slight decline in export volume.

   From the perspective of Taiwan's industrial development strategy, from the perspective of the straight-line deepening of the same industry and the horizontal extension of different industries, from the cross-regional manufacturing movement and the supply chain connection to the integration of IT and electric energy development technology, these are the future development strategies of the bicycle industry. In terms of short-term industrial development discussions, in the past, Taiwan’s supply chain was affected by the trade war, and some of Giant’s orders have been transferred to Taiwan for production, and it is also expected to be deployed in Hungary and other places. In addition, China has long been considering the factors of rising labor costs. Therefore, seeking to transfer or connect the supply chains of various regions is the reason for the future distribution adjustment of the market.

In recent years, technological evolution has brought disruptive innovations to the bicycle industry. The traditional bicycle industry can no longer be like in the past but simply pursues lightweight products. It must further integrate technology and innovative services with new thinking to produce products and products that meet consumer needs. The only service that can continue to win the favor of the market.

Five development goals of Taiwan’s bicycle industry

To meet the various challenges faced by the bicycle industry, Taiwanese manufacturers must take the correct response as quickly as possible to break through and rebuild. Mastering the five key changes: electrification, intelligence, customization, sharing, and global transfer, Taiwan's bicycle industry has risen again.

1. Electricity
   

   Cater to the trend of energy-saving and carbon reduction, low pollution, simple operation, labor-saving, and no driver's license electric bicycle (e-Bike) has gradually become a new choice of human transportation tools. More and more riders step on the e-bike with a power pedal to enjoy the riding life.

   At present, 55% of the global population living in cities is expected to reach 75% by 2050. Based on the increasingly crowded cities, four-wheeled vehicles will no longer be the main choice for urban population movement, coupled with the demand for environmental protection, Two-wheeled electric bicycles will become an important tool for urban population movement. Take the current European market with the highest e-Bike penetration rate as an example, and the German market has quite promising business opportunities. In 2017, 720,000 electric bicycles were sold in Germany, and the total sales increased by 19%. In addition, German electric bicycles accounted for 19% of the country's overall bicycle sales, which means that for every 5 bicycles sold, there is an electric bicycle. In the next few years, the proportion of e-Bike sales will grow again, reaching 23%-25% in the medium term, with a total sale of nearly 1 million vehicles; a long-term market share of 35% or a total sale of 1.35 million vehicles.

   Taiwanese brands are actively setting up factories and R&D. In the past two years, Merida and Giant have been actively developing e-Bike products to attack the global market. The layout of factories and markets is also expanded. The purpose of establishing factories is not only based on shortening the supply chain to get close to the market, but also producing electric bicycles that are taking off quickly in Europe.

2. Intelligent upgrade

   At the same time as electric bicycles, the introduction of intelligent elements is the key to attracting consumers' favor. The e-lifestyle is an unstoppable trend, and the development of bicycle products towards smartness is also unstoppable. IoT, big data, and digital life are changing the ecology of various industries and continue to change our lives. It is foreseeable that in the future, bicycles will not only be transportation or sports tools, but also the most convenient mobile monitoring unit in smart cities. Collect environmental information and even monitor traffic data. In response to the overall transformation of the bicycle industry to smarter, Taiwan’s industry is called upon to innovate across borders, combine the soft power of the Internet of Things and smart applications, and develop products that are more in line with the smart market.

3. Community Sharing
   

   As bicycle life is moving towards intelligence, all riders hope to use smart networking as a social sharing tool to enjoy a different riding life. This also promotes the formation of a new round of shared services in the bicycle industry. At present, many start-up companies develop smart bicycle products and solutions, and they have also innovated bicycle community sharing tools and platforms to further improve customer adhesion, actively invest resources in community development, integrate GPS car watches, and let riders learn about riding Upload and information to the community, share with riders.

4. Customization
   

   Electricity and intelligence depend on the injection of technology, but to satisfy consumers' awareness, focusing on the design and development of customized bicycle products is also the key for bicycle brands to win new market consumption patterns. Pursue customized concepts, meet customer needs, and strive for niche markets.

5. Globalization
   Given the intensified competition in the global bicycle industry, the US-China trade war has, even more, impacted Taiwan’s bicycle industry. In addition to product and service innovation, it is moving towards smart manufacturing and building a rapidly adjustable global supply chain support system. The same is true for Taiwan. An important point that bicycle manufacturers cannot ignore. Facing the period of rapid changes in the global bicycle industry, Taiwanese manufacturers or start-ups should master the various topics of electrification, intelligence, sharing, customization, and globalization to respond to challenges, transform and innovate, and make the industry flip and rise, towards a new future.