After 200 years of biking, is eBike going to change the game?

200 years ago, Karl von Drais took a first ride on what is considered to be the first bike in history. “Der Laufmaschinen” had two wheels, was powered by two legs, and was supposed to be a good alternative for horse power.

In 2017, we’re massively buying our first eBike. The eBike share in total European bicycle sales is rising, and — in some markets — more than compensates for the decline in sales of our classic bicycles.

The future of eBike seems bright. We have developed a relatively clean, cheap and fast way to move from A to B, accessible for large groups of people, for a variety of purposes. What eBikes will bring to urban mobility and recreation is difficult to predict, but Bosch’s CEO Claus Fleischer is working on a scenario of 65% of bikes being electrified. For the retailers, the emergence of eBikes seems to be a big change. We mention two big challenges:

  • First, eBikes seem to leave a heavy ecological footprint. Batteries life cycle is far shorter than the lifecycle of the bike itself, and the number of eBikers that are looking at bike or battery replacement after 2 years is significant. On top, not all eBike providers and dealers have well-organized battery disposal.
  • Second, bike dealers seem to be to be going through a transformation that is very similar to the one car dealers have witnessed before: electronic engineers rewrite the play, and diagnostic tools more and more dominate the workshop lay out.

What impact would this have on dealers?

  • Follow the pace of innovation. eBike innovation cycles are short and performance standards and benchmarks are continuously changing. Dealers who have been in the eBike market from the start, have seen 4 generations of power pack technologies, and have been dealing with an increasing variety of powertrains (wheel, rear, centered etc). They’ve witnessed the rise of connectivity and sensors, and adopted ABS for bike. We could mention many other eBike innovations that were brought to market in the past year, but it would distract us from the central message: The pace of innovation does not seem to be dictated by the bike producers anymore, but by the providers of the powertrains (Bosch, Yamaha, Shimano, to mention the biggest) and bike ware (sensors, navigators, etc)
  • UpSkill. Cycle menders will enrich their skillset. Individual dealers and workers can only ensure their place on the market by training and certifying on the products, methods, tools and firmware of the providers of powertrains.
  • Deal with maintenance sensitivity. eBikes are maintenance sensitive. Batteries, for example, have a shorter lifecycle than the bike. Also, mileage tends to be higher than traditional bikes. In addition, DIY does seems to be an option for only a very small share of bikers. Maintenance of eBikes, and reliable service delivery is therefore a key differentiator in this market.
  • Manage stock & Supply Chain. New models of bikes, powerpacks, powertrains as well as spare parts become obsolete very soon. On top the unit price of bikes and spare parts raises. To avoid depreciation on the in-store stock, retailers centralize their stocks, or simply order at the purchase.
  • Mind the footprint. The heavy ecological footprint of batteries has already forced battery providers to collect and recycle used batteries. Revisions of the supply chains will make sure that eBikes can be a “green” form of transport.
  • Improve response times. Availability of spare parts determines maintenance delivery time. Too often, delivery times for spare parts have held up menders
  • Deal with Regulations. Companies distributing or selling electric bikes in Europe may get lost in a maze of rules and regulations. The product is new, and countries are not well aligned on adaptions of local regulations. European directives are ambiguous and dealers and distributors are investing in a vaguely regulated arena.

How do retailers adapt?

The mentioned impacts can lead to a shake out. At the same time, these trends offer opportunities

  • Ebikes are a maintenance and service intensive product, trust and intimacy will be a key to an increase of revenues. This might hold back some consumers from buying their bikes online for a while.
  • From multi brand outlet to single-brand partnerships. Whereas retailers would offer a pretty wide range of brands in the past, the rise of eBikes might force retailers to limit the number of brands. In this way they will be able to keep up with the pace of innovation, manage stock and supply chain and invest in upskilling and diagnose tools. Dealers can also stick to their multi brand principle, but focus on bikes with the same powertrain provider.
  • From Sales to Maintenance. As mentioned, eBike is a maintenance and knowledge intensive product. This offers opportunities for dealers to raise revenues and margins in the repair units. The raise of eBikes may indeed come with a professionalization of the in-store repair units

The rising share of eBikes on this market seems to be a true game changer for retailers. Until here, only time can tell how they will be impacted and how they will adapt. But you can place your bet and express your point of view by filling out 7 questions on this monkey survey: