The Problem with the Bike Industry

Imagine if the Bicycle Had Never Been Invented
A recent address to the bicycle industry by Mark Sanders entitled: Imagine: the Bicycle as a Consumer Product really struck a chord with me.  Mark Sanders is a world famous industrial and bicycle designer and most likely a person many in the US have not heard of.  Two of his most famous designs are the Strida and the IF Mode.  The article articulates what many people have thought before but which they could never really articulate.  The main issue brought up is that the bicycle industry has only captured 20 percent of the available market and needs to capture the remaining 80 percent.  The basic summary of the most compelling argument made by Mark Sanders is:  "What if the bicycle had never been invented? And one day Apple released a new groundbreaking product called the bicycle, what would it look like?"


The Tapped Market
The problem of course is that the current industry players market to only enthusiasts.  These enthusiasts then try to convince other folks to buy into the system.  But this is not the way other markets work.  Sanders presents the case of the iPod.  Apple shoots for 100 percent of the marketplace when it markets its mp3 player.  It doesn't settle, so why do the players in the bike industry?  Most industries attempt to tailor their products to ever widening groups of consumers.  Yet in the bicycle industry we see no tailoring or effort to court those who are not hard core bicyclists.  Simply put, most of the people that the industry markets to are those who see bicycling as a lifestyle.


The Untapped Market
There are millions of people, heck billions, without bicycles.  Yet the bicycle should be every bit as practical and popular as a cell phone.  On paper, the bicycle is an amazing product: you can go 5x as far as on foot, no more waiting for the bus, it requires minimal upkeep, and is extremely affordable.  Yet, not many companies can seize on these 4 simple facts and make a compelling reason why we should all be salivating for bicycles. 


The Causes
If we look at the major players in the bicycle market we can see the giant collection of Taiwanese OEM's and name brands that dominate production.  Along with them there is the component monopoly of Shimano.  This maker of bicycle parts and fishing rods controls 75% of the bicycle component market.  Look at your bike and most likely there will be Shimano gears, and shifters.  Without competition there can be no innovation.  And due to the lack of competition we as consumers see no flow of high end technology to an affordable price point.  Instead, we have a components industry that is over 75 years old that makes very little advances with steady prices, while we have a computer electronics industry that is about 30 years old that has produced increasingly complicated microprocessors at exponentially decreasing costs.


The Hope
The increasing popularity of the bicycle as a viable mode of transit is important.  The more people who go to buy a bicycle and don't find the current market satisfying the better.  There are many promising designers that have been showcased at international bicycle shows, and their designs are now entering the market.  The traditional road racers are fading, while the market shifts to e-bikes and commuters.  The swing in the market from recreation to realism is due and many people who never thought they would be riding a bicycle will be.  The bike they hop on may no longer resemble the 10-speed they remember from their youth, or the beastly mountain-bike of their adolescence—instead it may not even be a true bike, but an actual innovation, one long past due.