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.
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.
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.
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.
With our research into electric bicycles, we regularly come across brands who also produce other micro-mobility devices. Specifically, our interest is piqued by electric scooters, which are as close to an electric bike as these devices get. Furthermore, these consumers may overlap and data on scooters may represent an adjacent indicator to keep on our radar.
Similar to the electric vs. traditional import data we publish, the following data is pulled from shipping manifests and has been cleaned within reason to remove mopeds, which are sometimes referred to as scooters. This first chart shows the first 7 months of each year in blue, and the whole year in red. There are naturally two outliers:
Early 2020 data was heavily impacted by the uncertainty driven by the COVID-19 Pandemic, hence it’s substantial reduction.
For 2023, we currently only have data for the first 7 months. However, the trend indicates, we should expect a down year relative to 2022, which is similar to what we are seeing in electric bikes.
This next chart shows how imports varied throughout the year over the past four years. Here we can see some more detail on the 2020 drop to near zero imports and a spike in November. Similarly interesting is how the imports of these units fall in the holidays. It may be that retailers are expected to already be stocked with the product by this point in the year. 2023 appears lower than the past couple of years, but not dramatically so, reflecting that these products are likely still popular for long term use. If we can draw parallels to the ebike market, there may be excess supply in the US, pushing down new imports.
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.
Electric Import Share
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.
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.
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.