E-bike White paper (2/5)
Component Brands are driving the growth for E-Bikes. Throughout the White paper authors Tomas Vucurevic and Aljaz Urbanc explain how Ingredient Branding can help components manufacturers to extract more value from their innovations by transforming their technologies into brands.
This is the second part of the White paper.
The evolution of E-bikes
Electric bicycles (E-bikes) managed to take a significant part of the bicycle market share in the last 5 years. Interestingly that trend was originally driven by the silver generation and not like usually, by early adopters from younger generations. But now, E-bikes became a fashionable, high quality and distinct asset of modern society and today one out of three bikes sold in Europe is an E-bike!
In this White paper we'll break down the current development of the E-bike market through the lens of Ingredient Branding and discover vital steps that component manufacturers can use in order to scale-up their position in the supply chain. We will also take a look on how the E-bike customer journey has changed and prove that the ingredient is becoming the trigger for the buying decision in favor of the final product.
Ingredient Branding is about creating a brand for an ingredient or a component of a product to project a certain quality or performance of that ingredient. This is typically done via a Multi-Level Marketing effort in order to create visibility, awareness, differentiation and preference in the downstream value chain. Examples in the bike market are Shimano or SRAM drivetrain, Bosch propulsion system for E-bikes and Rockshox or Fox for suspension systems. Other well-known Ingredient Brands are Intel® for processors or Gore-Tex® for protective fabrics. Ingredient Branding is typically vertically orientated and a long-term orientated partnership program.
Co-Branding is defined as the combination of two brands to create a unique product offering. The purpose of Co-Branding is to capitalize on each brand to enhance the performance or attractiveness of the final product. The main difference to the definition of Ingredient Branding is the fact, that Co-Branding is a horizontal orientated cooperation, where two distinct brands, that also can be bought separately, cooperate in a joint marketing program. Co-Branding activities have more a promotional character and are short- to mid-term orientated.
Photo source: Brose
Trends to watch
E-Bikes are becoming a part of a modern lifestyle as a daily means of transport by making the ritual journeys cheaper, faster, easier and as well healthier. They have also established their place in tourism, where they fill capacities in spring and autumn, helping mountain resorts to extend beyond their core summer and winter seasons.
Here are few trends and insights from the market:
- Electric bicycles are already the number one selling electric vehicles in the world. According to a Persistence Market Research (PMR) report on bike-eu.com, E-bikes will become the leading segment of the global bicycle market until 2024 and are expected to account for over 38% share of the market in terms of value. During this time, the E-bike segment is foreseen to reflect a CAGR of 4%, to reach a market valuation of US$ 24.43 Billion.
- The European Commission imposes up to 83% provisional anti-dumping duties on E-bikes imported from China, while U.S slaps a 25% tariff on the same product.
- Governments have imposed regulations to reduce emissions and an increasing number of consumers are switching to electric vehicles such as E-bikes that are pollution-free and keep the environment clean.
- Consumers see the branding of critical components such as propulsion systems from Bosch, Shimano or Yamaha as a quality upgrade, quality seal and an important signal for the selection of their new E-bike.
Photo source: Bicle.com
The online e-mobility dedicated platform Bicle.com shows that for 67% of consumers the brand of e-components is more important than the brand of the E-bike.
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