Product Profile – Bicycles
HS CODE: 871200
• Market size of bicycles is expected to reach US$ 47.7 billion by 2024, growing at the CAGR of 7.78%.
• World trade of bicycles in 2018 was US$ 9.25 billion. Major economies exporting the product included China, Chinese Taipei , Netherlands, Germany, Cambodia and Portugal. Major importing economies include US, Germany, Japan, Netherlands, France, UK and Belgium.
• Asia-Pacific is the fastest growing region in the global bicycle market. China, Japan, Australia, India, and South Korea are some of the top contributing countries in the region. It also emerged as the dominant segment in 2018 with a revenue share exceeding 20%.
• India has 90 bicycles for every 1,000 people, compared with 149 in China. The industry is worth US$ 1.2 billion and annual production stands at 15 million units.
While the bicycle has been a conventional mode of transport, bicycling has also been emerging as a leading sporting and leisure activity over the past few decades. The global bicycle market is expected to register a CAGR of 7.78%, during the forecast period of 2019-2024. The conventional segment accounted for the largest market share in 2017. However, the electric bicycle is expected to emerge as the fastest-growing segment out of the four segments which are mountain bicycles, road bicycles, hybrid or electric bicycles and others.
The growth of the electric segment might be attributable to that fact that electric bicycles are easy to operate. Electric bicycles can also ensure faster journeys as compared to their conventional counterparts. Additionally, the latest batteries can offer higher capacities and a longer life despite a smaller size. Such maintenance-free batteries add to the ease of use of electric bicycles. Hence, consumers are expected to prefer them.
The road bicycle segment accounted for the largest market share in 2018 and is expected to emerge as the fastest-growing segment over the forecast period. The growth can be attributed to the fact that these are the most basic vehicles, which do not need any sophisticated accessories, such as those required by racing, mountain, or other special-purpose bicycles. The growing trend among people to customize road bicycles for specific purposes is also expected to contribute to the segment growth in the forthcoming years.
World trade size of bicycles in 2018 was US$ 9.25 billion. Major economies exporting the product included China, Taipei Chinese, Netherlands, Germany, Cambodia and Portugal. Major importing economies include USA, Germany, Japan, Netherlands, France, UK and Belgium.
Individuals all across the globe are increasingly becoming salubrious and more aware of their physical fitness, which is resulting in the growing demand for the bicycle as an alternative way of transport. The ability of e-bicycles to manage the overall speeds more adequately, provides the rider with the comfortable drive on overpasses, mountain areas, and tough roads, thus paving the way to sales of the e-bicycle market. The increase in number of people opting for bicycling as a form of leisure is anticipated to propel the growth. Preference for bicycle as a convenient form of exercise to ensure a healthy life, free from obesity and other disorders is expected to further drive the market expansion.
Asia-Pacific is the fastest growing region in the global bicycle market. China, Japan, Australia, India, and South Korea are some of the top contributing countries in the region. It also emerged as the dominant segment in 2018 with a revenue share exceeding 20%. The region is anticipated to expand at the fastest CAGR of over 6% during the forecast period. Nations such as China, Japan, and Singapore, among others, emphasize on rolling out the infrastructure necessary to encourage and support bicycle commutation. Some of the cities in Asia, such as Tokyo, are known for their lowest accident rates and are hence considered as ideal cities for urban bicycling.
Moreover, Chinese bicycle sharing companies are aggressively targeting, countries, such as India and Australia, to expand their operations. As a result, the demand for bicycles is expected to rise over the forecast period. The European region accounted for the second-largest share of the global market in 2017 and is anticipated to expand significantly at a CAGR of over 5% during the forecast period. Europe is home to some of the cities that are considered ideal for bicycle commutation. European nations, including Belgium, Denmark, France, and Italy, are aggressively rolling out the infrastructure to support and encourage bicycle commutation and are contributing significantly towards the growth of the regional market.
The rising traffic congestion and shortage of parking space, particularly in metropolitan cities, are prompting people to consider bicycle commutation for short distances to save time. At the same time, various governments are aggressively rolling out the infrastructure necessary to support bicycle commutation, thereby encouraging people to opt for bicycles. However, the looming lack of the infrastructure necessary to support and encourage bicycle commutation, particularly in developing economies, is expected to hinder the growth of the bicycle market. Similarly, lightweight bicycles made using composite materials are expensive, which does not bode well for the market expansion.
Source: ITC Trade Map
India has 90 bicycles for every 1,000 people, compared with 149 in China. Hero Cycles, TI Cycles, Avon Cycles and Atlas Cycles are four key players and account for 90% of the country’s total bicycle sales. Around two million units are exported, with West Asia, Africa, US and Latin America as the main export destinations. China’s bicycles industry is worth US$ 9.5 billion and produces 84.5 million units annually. Of the total production, China exports 50.7 million units, compared with India’s 1.8 million units.
The Indian bicycle industry is worth US$ 1.2 billion and annual production stands at 15 million units.According to the industry, the Government needs to consider higher duty drawback from 12.3 % to 15% of FOB price. Alternatively, a bonus incentive of 2% of FOB price, as is applicable to select industries, can be considered for pushing exports. Domestically, aggressive promotion of the benefits of bicycling, as well as building of the requisite infrastructure to make cycling both safe and enjoyable will help boost the demand.