The recovery for the bicycle market has been slow and painful. The largest brands on the market are grinding through their warehouse stocks with deep discounts while pulling back assortments for future ranges. In March Trek announced that they would reduce their catalog by 40% in order to ‘Right Size’ their business. LINK to the story.

The Taiwanese mega brand Giant reported a drop in sales of 20% in the first quarter of 2024. According to the brand, inventory issues that have arisen in the post-Covid era are largely to blame for the drop off. Comparing its figures to the same period in 2023, the Taiwan-based company also announced that its net profit dropped 37.8%. Yikes.

So bike brands are suffering across the board right? Not everyone. 

Italian road bike brand Colnago reported €55.7 million in sales for 2023, showing steady growth and a profit of around $15 million despite industry challenges. Since its acquisition by Chimera Investments LLC in 2020, annual turnover has tripled. Cicli Pinarello posted annual revenue of 102 million Eur in 2023 an increase of 41% versus the previous year. It seems that there is room at the top for growth.

How are these brands continuing to grow amidst so much turmoil? It seems that the market for premium bikes is as strong as ever. Some of the sales can be attributed to people who began riding during the pandemic and are now looking to upgrade. Premium brands like Pinarello and Colnago are also much more focused compared to the large brands like Trek, Specialized and Cannondale. This allows more compact brands to craft a clear value proposition and provide premium service every step of the way. A brand like Trek is required to sell hundreds of thousands of bikes each year, in highly differentiated categories, where Colnago only sells around 10,000 nearly all in road cycling. 

What has become increasingly clear is that when it comes to bicycles, there is still lots of room at the top end of the market. This has become so clear that the french 500 pound gorilla of sporting goods Decathlon has launched their own premium bicycle brand Van Rysel. They have even invested in a world tour team. In November 2023, Decathlon was announced as the co-title sponsor of the team in a five-year deal. The team is Decathlon–AG2R La Mondiale from 2024. Decathlon replaced BMC as the bike supplier of the team, with the team using Decathlon’s Van Rysel bikes with Shimano components.

What’s the lesson here? The huge spike in volume during COVID brought loads of new customers to the market, some stayed and some left but the ones that remained are trading up in droves. The enthusiast market remains solid regardless of market fluctuations. Above all the focus and premium positioning that top end bike brands command is unique in the current market. While most brands are scrambling and focusing mainly on price, top end brands can surgically drive home their story of quality and excellence. 

Positioning, it’s always about positioning.