How big is the e-bike business opportunity on your market?
Electric bike sales skyrocket, and the market predictions vary. So what is the truth behind this business? How many e-bikes can you sell now and in the future? How can you take advantage of this opportunity? You can sell much more in your local area than is predicted globally.
I will tell you what’s going on in the electric bike market and how you can grow much faster in your local or niche market than the global predicted growth.
Let’s start with some basic data. The graph below shows that:
- the European market is supposed to grow from 4 to 18 million units
- the US market is supposed to grow from 0.5 to 2 million units
But this is only one of many predictions. For instance, other predictions say that the market will grow 4 times in the next 5 years or 15 times in the next 10 years.
I think it’s tough to predict the future, especially with today’s business and technology’s fast pace.
Let’s look at the same data from a different perspective. Europe can sell from under 1% to more than 3% of the population per year. So on average, Europe can sell to 2% of the population per year. In the US, the average is 0.34% of the population.
So we can see that the US is selling five to six times less than Europe.
Why is that? The American market is approximately five years behind the European market. But what can happen now, if the US market takes the knowledge from Europe and applies it to the US market, it can grow much faster in the upcoming years.
And what this data means in your local market? For instance, if you take the European 2% number, you have to sell 20 e-bikes to 1,000 people; if you take the US number, you have to sell 3.4 e-bikes to 1,000 people.
The question is: can you sell 4 e-bikes to 1,000 people?
I think you could do this anywhere in the world. Or can you sell 4,000 e-bikes in a city with 1 million inhabitants? So the question is for you — how many can you sell directly on your market?
Let’s take a look at a different graph. These two curves represent 10% and 20% yearly growth. Let’s say that everybody expected the electric bike market to grow at a 10% rate (the black line). So the production, let’s say, works at a 10% growth rate. But the demand on the market is much higher, and it’s growing at a 20% rate.
The green line with arrows is an exponential growth surprise factor — this is the difference between prediction and reality. In other words, this is the opportunity for new businesses or different business models. That could be an opportunity for you. So think about that.
I made a comparison of the global market growth with the local market growth. By local market growth, I mean the growth of a local company selling ebikes (or in other words — regional sales). I didn’t put there for 10 years because I think it’s too way ahead. Five years is the best time frame for this from my point of view. So if the global market is growing 20% per year, it means that, for instance, from 1 million revenue, you can grow to 2.5 million revenue in five years. If the company is growing at a 70% rate, you can grow from 1 million to more than 14 million.
You might ask if this is real. Yes, this is real. Local companies specializing in selling e-bikes can grow yearly from 50% to 100%, or even more (especially in the first years). Many of them hit some limits in the third, fourth, fifth, or sixth year. For instance, you hit the boundary with your team, supply, process, or you don’t have enough money to grow, and you’re unable to open new branches. Or you are unable to train new employees fast.
So what it means for the US market? The sooner you start selling e-bikes on an empty (or low developed) market, and the sooner you get the knowledge and grow your customer base, the better off you will be in the third, fourth, and fifth year. The “last” years make the most significant difference in your revenue. So think ahead, use the knowledge and grow fast on the market when it is the right time.
What are the critical factors of the local market growth?
First, you need to understand your area:
- What’s the population density
- Is the city or the place hilly or flat?
- Are there any bike lanes?
- What’s the behavior of the inhabitants and the city culture?
- Is somebody or some organization actively supporting cycling, or is not supporting cycling?
- What are the distances between key points in the city
- and so on
After understanding your area, you have to supply the right product — the suitable types of e-bikes. So, for instance, if you’re in a city landscape, you want to sell more city electric bikes. If you’re in the mountain regions, you want to sell more e-mountain bikes (eMTB’s). But for instance, if you’re in the mountain region, which also has a big city, with high sales of e-mountain bikes, you can also sell some or a lot of city or cargo bikes.
The third important point is what kind of organization you are. Are you a specialized electric bike sale shop, or are you a regular mechanical bicycle shop? What is the difference? For instance, specialized e-bike shops can sell 10 to 20 times more electric bikes than typical bike shops. Or are you another type of shop, for example, a ski shop looking for more revenue in the summer, or are you a power sports shop looking for a new opportunity? Or a lifestyle brand wanting to bring your branded ebikes to your existing customer base? You need to know your stuff.
Finally, the important thing is, what’s your know-how, how can you make moves on your market, and what’s your activity and speed. If you’re not active enough, you just open the shop and wait (and hope) if somebody comes around your location, you might not get enough sales. You have to be proactive and build your pipeline. Go actively for the new types of customers because electric bikes are for many new kinds of customers. And especially in the first years of developing the new market, it is essential to move fast.
As I wrote before, and I showed you on the graph, the first years during the most extensive growth are super important. You need to establish yourself on your market and take your share to grow further in the following years.
I will give you a few examples. For instance, if you’re in a high-density city area, like New York or Paris Region — you want to sell many city electric bikes. But if you’re in a mountainous region like Colorado or Dolomites, you know that the potential is much higher for electric mountain bikes. So there you want to sell more eMTB’s.
Let’s give an example — for instance, take Boulder, Colorado, with 100,000 people. With an average American market yearly sales number (0.34%), sales should be only 340 units per year. With the European number (2%), the sales should be 2,000 units per year. So can Boulder inhabitants buy 2,000 units per year? Yes, I think it can be done easily. Even more. But you can do this math for yourself in your region.
To summarize, global statistics are, from my point of view, only informative. And the local game is played entirely differently. There are much more sales in some regions than in others. And it depends mainly on the sellers — how good and fast they are.
So if you are in the right market with the right product, and if you’re a proactive and fast specialist for selling electric bikes, your growth potential is nearly unlimited. Your success depends primarily on you.
If you want to jump into the electric bike business and take this opportunity, or if you need help with your market or finding the right products, training your team, or deploying your branches fast, contact me. Write me an email or visit my website www.ebikesteve.com
About the author: I am Ebike Steve Ceman. I have been riding bikes for more than 35 years, racing for 15 years, and running my own business with electric bikes since 2012. I have been selling, servicing, and renting electric bikes — I have sold e-bikes for millions of €/$ and serviced thousands of them. I have learned a lot in my business, and now I help others to do it better and faster. I advise business owners to set, grow, or optimize their e-bike companies. I also work with bigger companies on product and business model feedback and development — ebike brands, models, drive systems. I help companies not only from the bike industry but also from entirely different industries and experiences. I am super passionate about the ebike future; that’s why I created the Ebike Future Conference, where we gather people who are creating and redefining this industry. For more information visit www.ebikesteve.com