Now that revenue data for 2023 is publicly available, we can see that both 2022 and 2023 were brutal for many cycling brands. On average, 2021 was the peak in terms of revenue with 2022 and 2023 dropping around 20% respectively. This puts most brands’ revenue around 2019 volumes. 2024 is not looking much better.

The cycling industry has faced unprecedented challenges in recent years. From overstock issues to decreased demand and persistent supply chain disruptions, cycling brands continue to face significant headwinds. But there’s hope on the horizon. From what I am hearing, 2025 should mark a turning point for our sector. This is the premise of what I’m calling the “Survive to 25” strategy – a rallying cry for the cycling industry to weather the current storm and position themselves for success in the post-crisis market.

What can we expect in 2025?

Several factors point to next year as a potential inflection point.

Inventory Correction: The current overstock nightmare should FINALLY resolve by 2025, allowing for a return to normal inventory levels and ordering patterns.

Dead Stock Flush: One of the gigantic elephants in the room with regards to the post-COVID dip has been the abundance of overstock or ‘Dead Stock’. In particular with regards to bikes. The amount of product on sale has been massive.

Supply Chain Stabilization: By 2025, we expect the global supply chain issues that have plagued our industry to largely resolve. This means more predictable shipping, normalized raw material supplies, and a return to more efficient production cycles.

Green Shoots

Several opportunities have emerged that point to a more positive outlook for 2025. 

Premium/Enthusiast Bikes – as I wrote in an article earlier this year, the market for high-end road bikes has been solid throughout the post-COVID crisis, with brands like Colnago, and Pinarello showing record growth. This indicates the resilience of the enthusiast category as opposed to entry level bikes which have seen the most significant decline in sales.

CHINA Rising – A “cycling craze” is sweeping through China, with more people embracing this green, healthy mode of transportation. Chinese people are discovering cycling as a path to a more active and convenient way of life. According to the latest data from the China Bicycle Association, in 2023, the production of bicycles priced over 1,000 yuan ($138) reached 12.15 million units, marking a 15.1 percent increase year-on-year. Legacy bike manufacturers are seizing this opportunity, offering a wide array of bicycles and accessories. Although more recent figures have shown that this trend is somewhat slowing, nevertheless it represents a swath of new riders in the market.

Who is Best Positioned? 

Looking back at the casualties of the post-COVID downturn some commonalities appear: Wiggle Chain Reaction, The Pro’s Closet, Vanmoof, were all relatively new entities that relied heavily on a direct to consumer model (D2C). This strategy proved to be fragile once headwinds appeared. These companies relied heavily on performance marketing(Online ads on Facebook, Instagram, and Google) to acquire new customers. This also made things difficult when cash flow was lacking.

Keys to survive

Distribution – despite the sexy nature of Ecommerce, traditional distribution has proven to be a reliable and resilient strategy for the cycling industry. As noted above, many high flying D2C only companies ran into serious trouble in recent years. Investing in a solid distribution network is essential to weather the storm. I have heard anecdotally that shops who pre-ordered for the 2024 season, were seeing the same pricing all year round, regardless of whether or not they pre-ordered. This is bad. Dealers are the backbone of the cycling industry.

Innovate or Die – Innovation has long been a key factor for success in the cycling industry. Innovation helps differentiate brands in a competitive market, attract customers, and push the boundaries of what’s possible. This is more true today than ever before.

WAR CHEST – this may seem obvious but a well stocked war chest is critical to weather any crisis. As an entrepreneur, it’s recommended to keep at least 36 months of expenses in cash at all times, this is also true for brands and shops. 

As we push through to 2025, the cycling industry has an opportunity to not just survive, but to reimagine itself. By focusing on financial sustainability, innovation, and customer value, we can build a stronger, more vibrant industry that’s HOPEFULLY better equipped for future challenges and opportunities. The road ahead may be tough, but for those who navigate it successfully, the rewards promise to be substantial.