Russia; bicycle market wobbles yet becomes more fashionable

Springtime began early in 2018 in Russia and Central Europe with the CEE experience temperatures higher then southern Europe throughout April and May, this helped boost sales of summer sporting goods, particularly bikes, scooters, roller blades, roller skates, climbing and hiking equipment. However there was a lack of inventory choice especially with higher end bikes leaving customers disappointed choice. 

In contrast to recent years because of springtime being normally cold and wet with typical warmer weather normally starting out in June, 2018 was the longest selling season on record for summer sporting goods so almost everything proved helpful to acquire more significant product sales as well as, overall buyers satisfaction. However, the bike industry in Russia is undoubtedly confronted by multiple levels of risks which in turn create bike distributor and dealer reluctance to stock higher priced models.

Marketplace information

Initially the bike market conditions of Russian appear to be very good not just weather-wise but also owing to inflation of the Russian ruble stands presently at a historical low of about 2 to 3% in comparison to 5.4% during 2016 and 12.9% in 2015). Furthermore, wages happen to be up by about 7% in 2017, so extra euros can be exchanged for Russian Rubles helping bicycle importers.

The effect coming from all of this within the Russian bike industry is difficult to understand. The sole indicator available in the market is on bike and bike product imports. This confirms in 2017 Russia imported 1.9 million cycle products at a total import value of USD 80.4 million. 88% most imported from China (83%) and then Taiwan (5%). As indicated by an industry investigation by BusinesStat (https://businesstat.ru) with the import of high end bikes from Europe (mainly from Germany, Italy and Poland) as well as from U.S. manufactures this makes up just over 50,000 units. The bike research report confirms the fact that total imports feature an increase of 2% in 2017. Near, close to this import of some 2 million bikes were manufactured in Russia.  Yet taking these kinds of quantities into account, the fact that import and local manufactured volumes may possibly overlap. The main reason for this is the fact that Russian companies, in order to satisfy their local tax and financial goals, are inclined to inflate and improve their data around the quantity of imported bikes so declaring them as their own production.

Tax effect

Government legislation had been but still will be the leading origin of concern in the Russian bike market. Following the U.S. and EU sanctions implementation, federal government authorities shifted towards improved overall administering of Russian tax laws. This has left most importers with fewer opportunities for ‘tax optimization’. A number of them decided to take a break to find out what lengths the federal government would go to. Unless an unspoken comprehensive agreement can be reached capital could possibly be briefly} removed from the Russian market.

A Key point worth considering has origins in the 2014 ruble devaluation. In the following years the mean mark- decreased.  Companies offloaded previous years older stock practically at costs prices and occasionally below them. Once retail prices yet again reach normal levels have made buyers frustrated many people considered this as a short term marketplace blip resulting in the postponement of new bicycle and bike equipment purchases or just simply buying from the second-hand market. Public bikes and rental services profited from all this.

Cycling in Russia

Despite most of these bike product sales issues, cycling is definitely on the increase in Russia. Bike paths and cycle lanes have grown to be pretty mucha necessity right now in reconstruction strategies meant for recreational and leisure areas. Not only in Moscow and large cities can you take a |enjoyable bike ride segregated from a variety of modern traffic? Even in several smaller sized regional towns such as Klin; the birth place of composer Tchaikovsky.

Moscow is very eager to host major bike expos. There are two annual exhibitions which are organized inside the Russian Capital; VeloPark at the beginning of February and Bike-Expo in September. They tend to be mostly targeted B2B events with 1 or 2 days for customers. Business programs incorporate a range of meetings, work classes meant for startup companies, distributors’ seminars, dealer meetings and bike industry announcements.  They can indeed be very popular even though conducted mainly in Russian without native speakers so translation support is key to results in the Russian bike market. Numerous companies in the bike industry are planning to set up retail business in Russia. Classes and seminars are actually about sales strategies, trends as well as the mixture of off and online sales has grown to be a crucial business factor in Russia.

Product sales of electric bikes have not taken yet on a considerable level in Russia. Due to average buyers searching for a brand inside the budget range of about 300 to 350 euro, possibly low priced manufactured in China e-bikes will not be with in their target price range. There are many firms marketing e-bikes. With an average e-bike sells for some 1,000 euro retail.