Russian bicycle market faces price hikes and goods shortage dilemma

Russian bicycle market faces price hikes and goods shortage dilemma

Influenced by the Russian-Ukrainian war and Western sanctions, Russia’s international trade has suffered a considerable impact, which has also led to tensions in Russia’s foreign trade relations and trade blockages.

In the current situation, the development of the bicycle industry, which relies heavily on imports, has also been hindered, with problems such as supply shortages and soaring prices.

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    Many brands left, disrupting the market balance

    Before the outbreak of the Russian-Ukrainian war, Russia’s bicycle market was booming.

    According to statistics, the country’s bicycle market grew at an annual rate of 7-8%, making it one of the fastest growing segments of the outdoor sports market. However, the outbreak of war and Western sanctions have reversed this trend.

    Before the war, the Russian bike market sold more than 3 million units, according to the country’s RBC analyst agency. Two-thirds of these came from imports, although from 2022 onwards many Western brands began to withdraw from the Russian market.

    These include US brands SRAM, Trek and Specialized(top 20 electric bike manufacturers in the world), along with others such as Scott, Merida and Cube. The withdrawal of a large number of brands undoubtedly had a huge impact on the market.

    Many brands left disrupting the market balance

    In this context, the Russian bicycle market is facing a serious shortage of bicycles. At the same time, the prices of many models have risen sharply as demand for some products exceeds supply.

    According to information from the Russian Ministry of Trade, retail prices of different models increased by 15-30% last year.

    Independent analysts believe that the actual increase could be even higher, especially for products from top manufacturers such as Specialized, Scott, Merida, etc., and could even reach 60%.

    And under the double impact of high inflation and difficult logistics, the retail price of bicycles is still rising.

    Cross-border transactions face payment barriers

    Adding to the woes of the Russian bicycle industry is the issue of payment.

    Many of the country’s major bicycle brands, such as Stels, Stark and Forward, rely on imported parts to produce their bikes, mainly from the European Union(top 10 electric bike manufacturers in Europe), the United Kingdom, Taiwan and other countries.

    While Western sanctions have not restricted the supply of bicycles and parts to the country, there are serious payment problems with such imports. Most Russian banks are on the EU and US sanctions lists.

    According to Eurostat, the number of bicycles imported into Russia from the EU fell sharply from 22,272 in 2021 to 6,710 in 2022, and to 1,043 last year.

    Cross border transactions face payment barriers

    In response, Russia has chosen to increase support and investment in its domestic industry.

    With the withdrawal of Western brands, many consumers are turning to more affordable domestic brands such as Stinger, Stels and Format, which are also relatively inexpensive and in line with the current purchasing power of Russian consumers.

    Some Russian bicycle manufacturers are beginning to take advantage of this opportunity to increase their market share.

    China could become an important source of supply

    In addition, some Russian agents are actively looking for new sources for supply chains, and some of them have managed to find suppliers in China, which, despite some problems with payment transactions, still provides a new sourcing channel for the Russian bicycle industry.

    And because Russia has always been one of the largest importers of Chinese bicycles, China is likely to remain an important source of supply for the Russian bicycle industry, with the blank market left by the withdrawal of a large number of brands in Russia gradually being replaced by local, Chinese and South African brands(top 10 electric bike manufacturers in Southeast Asia).

    Although the volume of the Russian bicycle market is not as large as that of Europe and the United States, the market is developing at a faster pace.

    China could become an important source of supply

    In addition, the Russian government is actively promoting the popularization of electric bicycles, and through a series of policies and measures to encourage consumers to buy electric bicycles, the bicycle market is still a bright prospect.

    At present, Russia’s bicycle industry in the Russian-Ukrainian war and the impact of Western sanctions, brand withdrawal, supply shortages, soaring prices and payment barriers and other issues are intertwined, making industry development difficult, but for Chinese manufacturers(top 10 electric bike manufacturers in China) it is not a good opportunity to enter.

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    Chocolatezhu
    Chocolatezhu
    Hi, I'm an experienced writer about mechanic and an expert on bike and e-bike tech who appreciates practical, beautifully-engineered things. And of course, I love cycling.
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