India’s Bicycle Craze Spikes, Then Hits A Bump During Pandemic

Looking to pick up cycling to avoid public transport or get back in shape during the pandemic? Chances are, you will have to wait for the bike you like or settle for whatever is available.

Demand spiked after India eased the world’s strictest Covid-19 lockdown allowing cycling in May. Stores quickly ran out of stock soon after. With factories still not operating at full capacity, fresh stock is taking much longer to arrive.

“This is unprecedented,” Rakesh Malhotra, 53, owner of Durga Cycles store in Delhi, told BloombergQuint over the phone. “Demand has gone up by 10 times in the last three months,” he said, adding that he’s forced to close his shop for one day every week to restock supplies. “If you visited a store three weeks ago, you could find a bike,” he said. “Right now, their shelves are bare.”

India is the world’s second largest producer of bicycles with 2.2 crore units sold every year, according to All India Cycle Manufacturers Association. The craze for cycling has been on a steady rise in the South Asian nation but that was largely limited to the metropolitan cities. Rural areas accounted for nearly half of the cycle sales even as people there were migrating to scooters, a faster mode of transport. The pandemic seems to have enhanced that appeal in the absence of gyms or buses and metros.

“I haven’t been on a bike since school,” Ramita Arora, a 26-year-old chartered accountant in Delhi, said. “I wanted a bike to be able to step out of the house and remain fit at the same time.”

Arora planned to buy a basic model worth about Rs 10,000 but ended up spending Rs 16,000 because of fewer options. “I was told there’s no clarity on availability of the specific bicycle I was looking for as Decathlon, a sports goods retailer, was quickly running out of stock.”

The industry, which was growing at 5-7% annually, is now expected to grow at 15-20%, led by a surge in first-time users, KB Thakur, general secretary of All India Cycle Manufacturers Association, said.

Sales of kids’ and geared bicycles, which account for 45% of sales, is expected to rise to 55-60%, following demand from larger towns, Thakur said.

Demand has nearly doubled for India’s largest maker of bicycles. Pankaj Munjal, chairman and managing director of Hero Cycles Ltd., said while they sold 2.75 lakh bikes this time last year, they’re now prepping for 4 lakh.

Decathlon Sports India, the French sporting goods retailer, said its cycle distribution has more than doubled from pre-pandemic levels, with “bike” being the most-frequently searched keyword on its portal. The firm has seen a growth of over 50% at the country level in the last two months, a spokesperson said in an emailed response to BloombergQuint.

Empty Shelves

The rise in demand, however, couldn’t have come at more inopportune time.

The sudden spurt and that too in a new category—sports and geared bikes or fancy bikes—has led to a severe shortage as supply chains were disrupted by the Covid-19 outbreak.

Thakur said the cycle industry is operating at about 75% of pre-panedmic capacity as workers, who returned to their homes over fears of contagion, are hard to get by.

“Supply concerns are big,” said Pradeep Aggarwal, director at Spark Engineering Pvt. Aggarwal’s company, which has been making bicycle gears for more than three decades, said demand has gone up by nearly 40% for domestic and export markets compared to pre-covid levels. Capacity utilisation, however, stands at two-thirds.

For Avon Cycles, one of India’s largest bicycle makers, demand has risen by nearly 20% compared with the pre-covid period, according to Omkar Singh Pahwa, chairman and managing director. But it’s also short of nearly a third of its workers.

Outside Shanti Dass Cycle Works—a store-cum-repair shop—in Faridabad, the line of customers waiting to buy new bikes or have old ones repaired is stretched. “It’s a packed day for us,” Shanti Das, the proprietor, said. “The shortage is such we have waiting period of up to 2.5 months.”

Decathlon Sports India, too, is facing shortages. “Our store layouts are empty and our supply chain is coping with the increased demand,” a company spokesperson said. “96% of our cycle quantities are made in India so we are hopeful to meet the demands on time.”

China Hurdle

Rising anti-China sentiment has led to bottlenecks in imports from China, the largest bicycle market. A global surge in demand, too, has left supply chains scrambling to make ends meet.

India imports bicycle parts worth about $72.14 million annually, according to data provided by Agarwal, who’s also chairman of the bicycle panel of Engineering Export Promotion Council.

Out of every 100 parts in a cycle, 15 are imported, according to Thakur, mostly from China. There are also 8-10 lakh premium bicycles that are imported every month, largely from China which has also tapered. “Slowdown in availability of imported raw materials, components and bikes is hindering the capacity expansion by manufacturers and component makers, leading to supply vacuum,” he said.

Geared segment and above—in which India relies on China for components—is one of the fastest growing category. In the sports segment, Decathlon said it’s seeing sales grow by over 150%.

Amardeep Singh Sahni, owner of Mumbai-based Amardeep Cycles, a dealer for Hero, Firefox and Montra cycle brands, said key components of premium bicycles like gears, shifters, derailleurs and frames come from China. Cost dynamics, he said, will change following imposition of trade curbs with Asia’s largest economy.

There’s one question everyone’s asking: Is this a fad or will it last?

Decathlon Sports India says it’s here to stay. “We think that people are now more aware of bicycle commuting, its benefits, its contribution to the environment and cleaner air,” the company spokesperson said.

Malhotra isn’t too certain. “Cycle isn’t a necessity. Right now, people are buying it as a trend,” he said. “No doubt everyone is shocked at the drastic surge. But we will have to wait and see if this settles as the new normal.”