Coming from a background in brick and mortar retail, Yelp has been an omnipresent consideration since they rose to the top of review sites. Many retailers complain about the challenges of working with reviewers, and the semi-opaque rating system. As I’ve pivoted to focus on the data side of retail, I became curious what data there is to substantiate or refute some of the claims of retailers. Thankfully, Yelp provides a well documented API for interacting with their services.
Methodology
After signing up for Yelp’s API access, I was able to check for batches of bike shops in cities around the country. Overall, I checked the top 1,206 most populous cities in the country, looking for the key work “bike shop” within 25 miles of the central coordinates. By approaching it this way, there is a lot of overlap, so I then filtered for duplicate listings.
However, since in the US, Yelp’s categorization does not break out bicycle shops as a dedicated category, I looked in the general “bicycle” category, with the stated keyword. In total, I found 7,654 unique listings. There may be some businesses operating multiple DBA’s, but the total number is close to the figures reported by Georger Data Services of the number of bike shops in the US.
Insights
Within these numbers, we can see some interesting niches within their names:
261 references of rent or demo ( 3.4% )
73 references of tour ( 0.9% )
179 references of repair or service ( 2.3% )
480 references of ebike, e-bike, or electric ( 6.3% )
53 references of mobile ( 0.7% )
163 references of Pedego ( 2.1% )
289 references of Trek ( 3.8% )
Overall, most of these businesses are highly regarded on yelp, with nearly two thirds of shops being rated a 4.5 or 5 stars. If we bring in rating of 4, we exceed 80% of all businesses. This flies somewhat in the face of conventional wisdom that yelp is challenging to navigate with customer reviews. Very few shops are rated at the bottom of the yelp scale (2.5 or below). Overall, this shows an alignment between the consumer perception of the importance of these ratings to businesses, and the scores that are used in these calculations. It should be noted that Yelp does have a business friendly policy when it comes to removing listings. In particular, references to employees individual names often fall under their privacy guidelines.
Ratings by State
The following map shows the average rating of these businesses around the country. Originally, I had the lower bound in red, but when this turned out to only be slightly below 4.0, it felt disingenuous to show it in red, as it might mislead people to think they are worse than they are. Nearly all states fall within a narrow range between 4.2 and 4.4. The outliers below 4.1 and above 4.6 generally have lower numbers of bike businesses, indicating that as the number of businesses increases, the average rating regresses to the national mean.
Overall, it seems that Yelp can be a good source of finding bicycle businesses in the United States. In addition, most of these businesses are highly regarded on the platform, with only limited outliers. For the genuine frustrations that retailers feel with ratings systems like Yelp, they may not deserve the villainous light that people often cast on Yelp. At least not in aggregate.
October saw declines in both electric and traditional bikes in US shipping manifest data. This is a normal seasonal decline that lines up with holiday imports. Any new imports in October and November will need to be rushed through supply chains, so most brands aim to have imports arrive at ports in September.
However, as seen below, electric bike imports have seen less of an import bump in 2023 compared to 2022. This is likely due to headwinds in 2023 for general bicycles, which has affected electric bikes in tern. The downtrend in imports we are seeing in Q4 is likely the result ordering decisions made in Q1/Q2
Even with the declines in electric bike imports, the substantial declines in traditional imports has allowed the ratio of electric to traditional imports to maintain above 20%. As a reminder, this figure provides a ceiling for the maximum ratio of imports of electric to traditional bikes. It is likely lower due to many small children’s bikes being imported in bulk packages, without internal quantities disclosed in shipping manifests.
The chart above shows monthly imports of ebikes comparing the last two years. We can se there is a seasonal increase in units, which declines as we move into Q4. This is likely to be in anticipation of holiday sales, as it may take a bit of time for the products to work their way through the supply chain within the united states.
A note on specific import quantities
When comparing our dataset to data from the USITC tarrif data, there are notable differences. 2023 H1 data matches well at ~1.4m units, but 2022 H1 data is divergent quite a bit. As reported in Bicycle Retailer and Industry News, average bike prices jumped 60% in H1 2023, indicating that the bikes imported last year were of lower value (~$140/bike). Many of these bikes are likely to be smaller children’s bikes, which are easier to group together into bulk packages. Although we can expect that most brands will report accurate bike quantities to government authorities, they may only report bulk grouping quantities on shipping manifests.
Rebounding Traditional Bikes
Last month we reported on a precipitous drop in traditional bike imports due to a major importer pulling back. This number has rebounded slightly to similar levels seen in January. However, this drop combined with the gains seen in electric bikes have pushed the monthly ratio to 27% electric bikes. Traditional bike imports YTD appear to be up slightly at 1.3% in our data set
In this series, we will explore what insights can be gained by reviewing public company disclosures and results. We’ll focus on the indicators that provide the most insight into the broader market. Naturally, these documents are written with the intent of communicating an individual company’s performance and there is a base level of bias to be aware of. However, as will be seen, we can still find quality indicators in the data.
Introduction
KMC (Kuei Meng) International Inc. is the self claimed largest chain manufacturer in the world. In this post, we will explore their investor disclosures, which can be found on their website. Their primary business line is bicycle chains, which accounts ~75% of their revenue, with Auto, Motorcycle, and Garage Door units accounting for the remainder.
Within bicycles, they sell both through OEM channels for new complete bicycles, as well as aftermarket replacement chains. These two distribution channels represent different places in the market. OEM sales are much farther up the supply chain, as they are a production input to complete bicycle manufacturing. As such, this business unit is likely reflective of lagging demand from bicycle brands. We say lagging, because orders will slow from bicycle brands when they see demand from their consumers falling, relative to their inventory levels, resulting a slowing of orders to OEM bicycle assemblers, and in turn a slowing of input demand. On the other hand, aftermarket sales are a more direct measure of end consumer demand. This division sells both direct to consumer, and through bicycle retailers.
Bike Sharing
From 2017 through 2022, KMC tracked sales into OEM bike sharing partnerships. This was during the aggressive boom times of bike sharing expansion throughout the world. Many of us in the industry are aware how this story played out with bicycle graveyards of discarded bike-share bikes showing up around the world. Large capital investments pushed supply up substantially, while downstream obstacles, such as competition and local regulations slowed efficient utilization. As a result, many of the aggressive players in the market have pulled back, leaving a more stable and established landscape for this channel.
As seen in the above chart, bike-share was a significant source of demand for KMC for four years. However, in line with the general fervor surrounding the bike share boom, this appears to be more representative of a short term supply push, rather than a long term sales channel. KMC, being the largest manufacturer of chains is likely to be a bellwether for the bike share segment. Does this falling supply indicate that bike share has failed in general? We don’t think so. We see this chart as demonstrating that the wasteful oversupply of has subsided, and this market channel can resume stable growth.
Internal Inventory
The chart above shows quarterly inventory snapshots since 2019, when KMC first started including the data in their quarterly reports. In 2022, they only reported inventory as a year end number, so we assigned that amount to all quarters in that year.
It is interesting to note that the overall inventory is pretty stable given the substantial inventory swings in US wholesale inventory throughout the pandemic. This may be a reflection of the quality of KMC’s management, supply flexibility, or may hide some product mix challenges due to its aggregate nature.
At Bicycle Market Research, we have tools to infer inventory and sales data from some individual web pages. Using this proprietary technology, we took a snapshot of kmcchain.us, which implies roughly 680,000 units and ~$2.8m in US inventory if assuming keystone margins at landed cost. This gives us a reasonable idea of their US aftermarket relative to the global reach of KMC overall, at roughly 8% of current inventory holdings. This business is smaller than OEM, but has higher gross margins for KMC as their quarterly reports have indicated.
Ebike Premium Chains
KMC has published reports on High End Ebike chains for nearly a decade now, which gives us a unique view on the global growth of the ebike market. We should note here that hub driven ebikes do not benefit from a premium chain, as their torque is not translated through the chain. In stead, all of their torque goes straight into the wheel and tires. However, mid-drive motors, which are prevalent in many higher end ebikes, do benefit from added chain performance. As such, the following charts are indicative of the global mid-drive ebike market.
The dramatic chart above shows a substantial slowdown in these premium ebike specific chains. Although most of the bicycle industry is bullish on ebike growth globally, it may be that oversupply of premium ebikes has led to cut backs in orders from brands. In addition, the pandemic induced purchasing by bike shops may have left the aftermarket channel similarly saturated with product.
As we can see from the following chart, although premium ebike chain sales contribute significantly to KMC’s overall sales, they are not perfectly coupled. The pandemic induced purchases from KMC started in early 2020, while the most significant growth in premium ebike chain shipments did not take off until 2022.
In our opinion, we expect KMC overall quarterly revenue to reach a local minimum in the coming quarters and subsequently stabilize in 2024 in line with a market recovery predicted by the People for Bikes S&P Global quarterly report. In addition, we expect high end ebike chain shipments to continue trending downward, with a lagging recovery by one quarter to return to the longer term growth trajectory seen prior to 2022.
August import data showed Electric bikes remaining flat at -1% over July, while the average month over month variation since 2019 was 7.6%, and a standard deviation of 20%. Those figures are simply to point out that a small fluctuation in the fat of 1% is in itself unusual. This is further punctuated by the dramatic drop off in traditional bicycles where we are seeing a drop of 49.95% over July. Naturally, this required some investigation. I double checked there was not an issue with the data export, then started looking for which brands may be most highly correlated with this drop off.
These three brands topped the charts by volume, with Huffy by far leading the way. Of course, there are a lot of other brands moving, but they net out to nearly 0 compared to the shift seen from Huffy. Dynacraft showed up only in July, then dropped off. There are some heuristic improvements we can make to fine tune the model in order to identify brands more specifically. However, this data still serves as a valuable indicator of movements in the US bicycle market. An additional interesting trend seen when finding this data is from the three largest brands by retail value, Giant, Trek, and Specialized.
It is important to note the scale that we are comparing, where huffy imported 100,000+ bikes in a month, these three are showing much lower, at less than 5,000. Again, the specific number is not precise, due to the nature of the method used for gathering the data. Clearly, however, Specialized has had many more imports though Q2, while trek has either flown under the radar, or imported very little this year. NOTE: Electra does not show up in the data as a sub brand of Trek.
Electric Bike ratio
Due to the drop in imports of traditional bikes, the ratio of ebikes jumped, but still tracks at a rolling average of 20% of unit imports. The trend of 50,000 units per month has held pretty stable, and is the same rate of imports in 2022. The stability of these imports may reflect a general bullishness on the ebike category.
July saw shipping manifest data for both traditional and electric bikes increase. The larger increase in traditional bikes is reflected in a decreased share of ebike imports at 18%, though still in line with the annual trend of approximately 20%. Also of note is that both categories of bikes hit their peak import level of the year. This makes sense in a historical context as it typically coincides with peak bicycle sales a retail.
Month
Electric
Traditional
Electric Import Share
Jan 2023
50,560
179,678
28.1%
Feb 2023
46,132
205,907
22.4%
Mar 2023
35,999
195,368
18.4%
Apr 2023
37,656
216,028
17.4%
May 2023
31,613
272,576
11.6%
Jun 2023
52,733
253,823
20.8%
Jul 2023
56,053
311,869
18.0%
Shipping Manifest Import Data by Month 2023
This data falls in line with the annualized information presented by Steve Frothingham in Bicycle Retailer and Industry News. The article is full of interesting information and insights. The data used for that report is more precise than the shipping manifest data we present here, but almost entirely misses electric bikes, due to the way they are categorized.
A recent webinar hosted by the NBDA had Bob Margevicius, Executive Vice President of Specialized Bicycle Components, on to explain some of the supply context. In the webinar, Bob referenced how the product we are receiving now into the US were ordered upwards of 12 months ago. Since then lead times have plummeted, but it will take some time before we will see a normalization of supply. He pegs the inventory in the US at ~14 months worth of sales.
June shipping manifest data reverses some of the shifts seen in May, with increased Ebike imports and slightly declined traditional imports. Nonetheless, traditional bike imports continue to be at elevated levels, putting strain on a market struggling with sell through constraints. For those paying attention to wholesale inventories reported by People for Bikes, and publicized by Bicycle Retailer, this pain will be little surprise.
As we can see from the following chart, the ratio of Ebike to traditional bicycles on shipping manifests appear to be converging on 20%. We will likely continue to see fluctuations in both the absolute quantity of imports and the ratio of Ebikes as the industry struggles to work through the inventory challenges currently faced throughout the US.
The global bicycle industry has experienced significant fluctuations in recent times, with imports being a key indicator of market trends. In this blog post, we will delve into the latest import figures, focusing on traditional bikes and electric bikes. Although disruptions to supply chains have somewhat skewed the comparison data, the numbers still provide valuable insights into the current state of the industry.
Traditional Bike Imports on the Rise:
Over the past month, imports of traditional bikes have seen a notable surge, increasing by 26% month-over-month (MoM) and an impressive 38% year-over-year (YoY). These figures may appear substantial at first glance, but it’s important to consider the backdrop of recent disruptions in supply chains, which have affected the availability of traditional bikes. As a result, the comparison data should be viewed with caution.
Understanding the Distortions:
Supply chain disruptions caused by various factors, such as the waning global pandemic and trade restrictions, have created challenges for the bicycle industry. These disruptions have led to inconsistencies in manufacturing, shipping, and distribution processes. Therefore, while the increased import numbers are positive for traditional bikes, they must be interpreted in light of the distorted comparison data resulting from the recent industry upheavals.
Electric Bike Imports Experience a Dip:
In contrast to the upward trend seen in traditional bike imports, electric bike imports have experienced a decline. Import figures show a decrease of 16% MoM and approximately 22% YoY. This decline has resulted in the lowest monthly import number for electric bikes since April 2020. Consequently, the proportion of electric bike imports relative to traditional bike imports has fallen to 10.4%.
Factors Influencing Electric Bike Imports:
Several factors may have contributed to the recent decline in electric bike imports. Firstly, the disruptions in global supply chains have impacted the availability of components necessary for manufacturing electric bikes, leading to production delays and reduced imports. Additionally, market saturation may have played a role in dampening demand growth for electric bikes. In response, brands may be adjusting their inventories to revised projections.
Conclusion:
The import trends in the bicycle industry provide valuable insights into the current state of the market. While traditional bike imports have seen a significant increase, it is crucial to consider the distortions caused by disruptions to supply chains. On the other hand, the decline in electric bike imports can be attributed to a combination of supply chain challenges, changing consumer economic sentiment, and potential temporary market saturation. As the industry continues to navigate these challenges, it is essential for businesses and consumers alike to stay informed and adapt to the evolving dynamics of the bicycle market.
As we enter the fifth month of 2023, it’s evident that this year continues to be far from ordinary due to the ongoing pandemic-induced challenges. While wholesale inventories continued to climb into 2023 , traditional retail inventories have remained stagnant. Analyzing the import data from Bills of Lading, we have observed a slowdown in bicycle imports since late 2022, but unfortunately, it hasn’t been sufficient to prevent the accumulation of wholesale inventories mentioned earlier.
Taking all this into account, we now have a reasonably clear picture of how inventory moves into the US market before purchase. However, there appears to be a bottleneck in the flow of inventory from retail to consumers. Several factors are likely contributing to this bottleneck:
Broad economic pressures, such as high interest rates, debates over the government debt ceiling, and a record-high consumer credit card debt.
The pandemic has caused a surge in buying, resulting in accelerated purchases from 2023 being pushed back to 2020-2022.
Intense competition and low purchasing power are leading to a constricted market for used bike sales. Consequently, consumers who prioritize selling their existing bikes before buying new ones are facing reduced liquidity.
There is also a surplus of second-hand trade-in partners, such as Pro’s Closet and Bicycle Blue Book, which further adds to the inventory buildup.
By addressing these factors, we can gain a better understanding of the challenges impacting the inventory flow from retail to consumers in the current market.
Used Bike Listings
For quite some time, we have been diligently monitoring used bicycle marketplaces. Recently, we have redoubled our efforts to assess the exact extent to which these sales channels contribute to the overall bicycle sales system. However, our findings have been inconsistent across various marketplaces.
Craigslist
Craigslist has established itself as a longstanding and relatively informal marketplace for the sale of used products. When comparing the first half of 2022 to the year-to-date figures of 2023, we can observe a similar trend. There has been a consistently noticeable decrease of approximately 16% in the average number of daily listings on the platform.
This decline in average daily listings on Craigslist implies a potential shift in consumer behavior or market dynamics. It could indicate a decreased supply of used bicycles available for sale on the platform, which might be attributed to various factors. One possibility is that more people are holding onto their bicycles due to the ongoing pandemic, limiting the availability of second-hand options. Another factor could be the rise of alternative platforms or channels that offer a more streamlined and user-friendly experience for buying and selling used bicycles.
These findings on Craigslist underscore the need for a comprehensive analysis across multiple marketplaces to gain a comprehensive understanding of the current state of the used bicycle market. By exploring different platforms and their respective trends, we can paint a clearer picture of how consumer behavior and market dynamics are evolving in the realm of used bicycle sales.
Pinkbike
A striking departure from the gradual decline observed on Craigslist is the remarkable surge in listings on Pinkbike, a popular platform renowned for its focus on enthusiast mountain bikes. Beginning in early 2023, the volume of listings on Pinkbike experienced a substantial explosion, showcasing a significant deviation from the trend seen on other marketplaces.
The surge in Pinkbike listings can likely be attributed to two distinct parties vying for attention within the platform. Firstly, there are the passionate enthusiasts who are eager to sell their existing bikes, possibly to take advantage of retail discounts or upgrade to newer models. These individuals recognize the appeal of Pinkbike’s target audience, consisting of fellow enthusiasts who share their passion for mountain biking.
Secondly, retailers have also recognized the potential of Pinkbike as an effective advertising channel to address their stagnant inventory concerns. By leveraging Pinkbike’s dedicated user base, these retailers hope to generate increased interest and sales for their stock. Utilizing the platform as a promotional outlet allows them to target a niche market segment that aligns with their offerings, thereby maximizing their chances of finding motivated buyers.
The contrast between the decline witnessed on Craigslist and the surge observed on Pinkbike highlights the nuanced dynamics at play in the used bicycle marketplace. It underscores the importance of understanding the unique characteristics and preferences of different platforms to gain a comprehensive overview of the overall market landscape. By considering the motivations and strategies of both individual sellers and retailers, we can better grasp the evolving trends within the Pinkbike marketplace and the impact it has on the wider used bicycle sales ecosystem.
“Trade-In” Aggregators
In the past decade, there has been a notable rise in bicycle liquidity facilitated by enterprises such as The Pro’s Closet and Bicycle Blue Book. These organizations play a crucial role in the ecosystem by purchasing used bikes through trade-in partner retailers. The liquidity generated from these transactions helps consumers in acquiring new bikes from retail establishments. However, it’s important to recognize that these businesses are not impervious to the economic challenges faced by the wider market.
Taking a closer look at the chart provided, we can observe the inventory trends of both The Pro’s Closet and Bicycle Blue Book. Interestingly, neither of these entities is experiencing a significant increase in their inventories. In fact, The Pro’s Closet seems to be actively focused on reducing their stock. This could be indicative of several factors at play, such as the impact of market conditions and the need to manage their inventory levels efficiently.
The chart provides insights into the average daily inventory listed on various public-facing platforms. It allows us to gauge the overall availability of bikes through these key market players. By examining this data, we can gain a better understanding of the current state of inventory in the used bicycle market and how it is being managed by prominent businesses like The Pro’s Closet and Bicycle Blue Book.
Considering the role these organizations play in facilitating the trade of used bicycles and the implications of their inventory trends, it becomes increasingly important to monitor their activities and assess their influence on the broader market. By doing so, we can make informed decisions and predictions about the availability and liquidity of used bicycles in the industry.
The disparities found in the datasets mentioned above are indicative of the variability in the availability of underlying data. Addressing this issue could be a potential area of focus for future development, as it would enhance the accuracy and reliability of our analyses.
Upway, a relatively new player in the trade-in market, has recently emerged with a distinct emphasis on low mileage electric bikes. As a consequence, their current inventory in the United States is somewhat constrained. However, this unique market positioning presents an opportunity for Upway to leverage the existing market conditions to their advantage. With the current state of the market, they may capitalize on the opportunity to acquire lightly used bikes at more favorable valuations. This strategic move allows them to build up their inventory of desirable electric bikes, catering to the growing demand in this particular segment.
Conclusion
Examining the dynamics of the used bicycle market reveals a complex landscape influenced by various factors. The analysis of different platforms and marketplaces provides valuable insights into the trends and challenges impacting the industry.
While traditional platforms like Craigslist have experienced a consistent decline in daily listings, Pinkbike has witnessed a surge in volume, likely driven by both passionate enthusiasts and retailers aiming to capitalize on the platform’s dedicated user base. This divergence emphasizes the importance of understanding platform-specific dynamics when assessing the overall market.
Furthermore, the role of businesses like The Pro’s Closet and Bicycle Blue Book in enhancing bicycle liquidity cannot be understated. These entities have played a significant role in facilitating the trade of used bikes, offering consumers an avenue to acquire new bikes while reducing inventory levels. However, their inventory trends, as seen in the provided chart, indicate the need for effective inventory management amid the market’s economic challenges.
Moreover, emerging players like Upway, focusing on low mileage electric bikes, have entered the trade-in market. Although their current US inventory is relatively limited, they can leverage the market conditions to acquire lightly used bikes at favorable valuations, positioning themselves strategically within the growing demand for electric bikes.
Overall, analyzing these various aspects of the used bicycle market highlights the importance of comprehensive data analysis, platform-specific insights, and adaptability to navigate the evolving landscape. By understanding the interplay between consumer behavior, market dynamics, and the strategies of key market players, industry stakeholders can make informed decisions to address challenges and capitalize on emerging opportunities. As the market continues to evolve, it remains crucial to monitor and adapt to the changing trends and developments in order to thrive in the dynamic world of used bicycle sales.
This post marks the beginning of our monthly report series, where we break down US container ship imports using Bills of Lading (BOL) data. Our primary objective is to provide electric bike import data, which has been lacking in public discourse due to inconsistent use of the proper Harmonized Tariff Schedule (HTS) codes. But before we delve into the methodology, let’s whet your appetite with a chart showcasing electric and traditional bike imports since 2019.
Initially, the volume of traditional bicycle imports dwarfs that of electric bikes. However, when we examine the import share of units, a trend begins to emerge. The unit share of electric bikes follows a seasonal pattern and is trending upward. The latest peaks in late 2022, reaching 30%, are somewhat surprising but may be slightly misleading, as they coincide with a substantial decline in traditional bike imports in the fourth quarter of 2022. To gain a grounded perspective, it’s important to pay attention to the longer-term trend. Electric bike imports are increasing as a proportion of the overall inflows and are likely to continue doing so in the foreseeable future.
Where does this data come from?
All importers of goods are required to fill out bills of lading (BOL), which document the imported items and the applicable Harmonized System (HS) codes. These bills of lading are consolidated by a vessel into a shipping manifest, which must be transmitted to US officials at least 24 hours prior to loading on the vessel. This shipping manifest data serves as our primary source of information on US imports. Once the shipment arrives in the US, a tariff invoice is compiled for each specific item in the shipment. This invoice is what informs the US ITC Dataweb Service.
However, there are some challenges associated with this data. Firstly, the HS code is not the same as the US government’s HTS codes, and only one code per shipment needs to be applied, even if it is a blended container. As a result, sometimes the codes will be for entirely unrelated products. Secondly, value declarations are not provided with the BOL.
Isn’t this data public?
While this data is technically in the public domain, it is not as readily available as the aggregate invoice data released by the government. US officials make import data available through three methods: 1. Direct sharing with specific partner companies such as S&P Global (Panjiva) 2. Aggregate statistics released through the USITC website. 3. Freedom of Information Act requests.
Is the data accurate?
When we talk about accuracy, we refer to the repeatability of a result. Since we use the same dataset and model for each report, the resulting data is accurate. Even as we adjust the model, we will do so retroactively, ensuring that subsequent posts reflect the newly adjusted figures.
However, it’s important to note that these numbers are NOT precise. For example, the estimated 151,349 bikes delivered in January 2019 is very likely not the exact figure. This discrepancy arises from how this data is loaded into BOL databases. Undercounting may occur when bikes are grouped into larger quantity units, such as pallets or larger boxes, which is particularly common with small balance bikes or children’s bikes. On the other hand, overcounting of units may occur when a bicycle shipment is blended with other items that may not all appear in the “product description” field of the BOL data.
Should we trust this data? Absolutely. It serves as an indicator that was previously unavailable, contributing to a better understanding of emerging trends. Just as with visitors to a brands website, this is just one of many indicators that should be used to inform our perspective.
Where do we go from here?
We aim to establish Bicycle Market Research as a consistent source of this import data by providing aggregate-level information for free on our website. We analyze this data using a model that is still in development. As both the data and model are updated, we will continue to post refined data.
