The Bicycle Industry in Australia 2011/12 A national snapshot by Bicycle Industries Australia, Cycling Promotion Fund and the Retail Cycle Traders Australia Industry Contents Overview Industry Overview 1 The bicycle industry in Australia is a diverse Key figures summary 2 and ever changing industry providing our 1 Trends in Australian Cycling 4 customers with a wide range of quality Participation 4 products and services. Sales, imports and the LVIT 5 Taskforce and Productivity Commission 6 This report provides a snapshot of the Electric Bicycles 6 cycling sector in Australia, an overview Australian Standards 7 of the trends and developments over the Trade shows 7 last year which impact on the industry Bicycle Industries Australia Ltd 9 and an outline of the initiatives, programs Overview 9 and services provided by the two industry Aims of the BIA 10 associations and the Cycling Promotion General Manager’s Report 10 Fund. Industry engagement 11 Australia has two distinctive bicycle industry Data collection 11 member associations: Representation 11 Bicycle Industries Australia Ltd. (BIA Ltd) Lobbying 12 n represents the wholesaler supply companies Training 12 BIA Office 12 n Retail Cycle Traders Australia (RCTA) supports and represents the independent bicycle Retail Cycle Traders Australia 14 shops. Overview 14 In an environment of constant change and Australian bicycle retail sector 15 uncertainty it has been essential that both Value of the industry 15 associations work together to optimise outcomes Employment 15 for their members and the sector overall. Training 16 Both associations are committed to providing the Imports 16 best possible services to their members as well Technology 17 as ensuring that the interests of the industry are Trade & Consumer Shows 17 represented. The RCTA 17 Decisions which impact on the industry are made Cycling Promotion Fund 19 at a range of levels including economic and trade Overview 19 policies, industrial relations, taxation, urban Emerging Crisis Summit 19 planning and design, transport policy and resource allocation, road safety, environment, tourism, sport Active Travel for Australian Cities 19 and recreation. The complexity of the external National Urban Policy 20 environments which impact on the sector remains Moving People 2030 Taskforce 20 the biggest challenge for the industry associations. Federal Budget 2012/13 21 Partnerships are vital and critical to our success. It Active Transport for Sustainable Cities 21 is vital to nurture these relationships and to build Asia Pacific Cycle Congress 21 alliances and partnerships to ensure that the sector CCCLM Roundtable 22 is well placed to respond to the challenges of the Parliamentary Sports Festival 22 future. Riders on the Hill 22 Visionary companies within the bicycle industry ARA Conference 22 have helped to create the Cycling Promotion Cycle Tourism Conference Key Note 22 Fund (CPF). The role of the CPF is to provide the Australian Bicycling Achievement Awards 23 sector with a collective voice to promote cycling Corporate visits 23 and work for improved conditions for bicycle riders. Government Relationships Manager 24 2011/12 Report – Bicycle Industry in Australia Industry overview Location of stores Australian by percentage Bicycle Industry > The industry employs WA NT QLD ACT The Australian bicycle industry, approximately 10 1 19 2 like all Australian industries is 10,000 people affected by the current global financial situation, and with the 2 purchase of bicycles considered Staff are employed discretionary spending, we are > in 1,052 shops and reflective of Australians spending 432 wholesale habits. businesses This financial year the industry has seen a fall in bicycle imports, dropping by 4% SA VIC TAS NSW 9 27 4 28 from 2009/10 and 13% since the peak financial year of 2007/08. Value of industry > sales: The downward trend of imports over the last three years is significant, but the ten $1.1 billion year trend does reflect a 38 % increase since 2001/02. Population per store The reality is that the bicycle industry will Number of bicycles WA NT QLD always face challenges; there always will > imported in 2011/12: 22952 23240 22341 be issues which will affect bicycle sales. 1,126,000 ACT As an industry, we need to be able to 16850 take advantage of new opportunities and markets, be adaptable to change and to deliver outstanding customer Import value service. > of bicycles: $194,450,183 % of bikes sold in SA VIC TAS NSW 18277 18832 23259 > 2011/12 that were 24568 adult sizes: 66% % of bikes sold in Location of wholesalers > 2011/12 that were by percentage children sizes: 34% WA NT QLD ACT 4 0 22 2 Number of bicycle > stores online: 39% of Australian stores have online sales capacity while 77% have a store website SA VIC TAS NSW 5 38 0 29 Bicycle Industry in Australia – 2011/12 Report 3 2011/12 Report – Bicycle Industry in Australia Trends in Australian Cycling 4 2011 Cycling participation rates Trends of use of bicycles are constantly changing, shaped by a range of factors. Cycling was once a means of transport for millions of people around the world. The expansion of the motorcar and its popularity resulted in the decline in sales and production of bicycles. But over the last few decades the bicycle has seen a real revival in interest as people seek ways to become more physically active, beat congestion in cities and find a personal physical challenge. In Australia the popularity of cycling is undergoing Adult cycling participation significant growth. According to Government 2,500,000 statistics there has been a 45% increase in 2,500,0002,000,000 participation in the past ten years to identify as the 3rd most popular physical activity in Australia, 2,000,0001,500,000 behind aerobics/gym/fitness and swimming and 1,500,0001,000,000 ahead of running, golf and tennis. 1,000,000500,000 The national increase is also supported by some 500,000 significant site specific increases such as the Sydney Harbour Bridge which has seen an almost 130% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 increase in bicycle traffic in 5 years and Perth’s Principal Bike Network usage has increased 490% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 in the past 25 years. Cycling is most popular with people aged between Participation by 5 to 14 year olds 25 and 44 years, the generation also most conscious of the need for healthy lifestyles. 1,000,000 Given Australia has an ageing population, and 1,000,000800,000 people over 55 constitute 21% of the population, there is considerable potential for the bicycle 800,000600,000 industry to ensure both that the people already 600,000400,000 cycling maintain their interest beyond 55 and 400,000200,000 attract new people in this age group to cycling. Seniors Australia calls those born between 1946 200,000 and 1964; “at the top of the hill, not over it”. 2001 2004 2008 2008 This age group is critical for the long term health of 2001n 5–8 YO 2004 n 9–11 YO 2008 n 12–142008 YO the industry and the entire sector. n 5–8 YO n 9–11 YO n 12–14 YO This increase is however offset by the alarming downward trend in children’s participation. 250,000 Since 2000 we have seen a fall across all categories and as a sector we need to be aware that to 250,000200,000 ensure an continued increase in cycling, engageing 200,000150,000 and developing children cycling will be a critical 150,000100,000 challenge in which we must invest. 100,00050,000 50,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Bicycle Industry in Australia – 2011/12 Report Trends in Australian cycling Bicycle imports vs bicycle usage A Quantium report at the beginning of the 2011/12 financial year indicated that 16% of all bicycle related purchases made through electronic means (credit card/ 2,500,000 Usage eftpos/direct debit) came from foreign online stores. 2,000,000 This data has been used to further push the need to 1,050,000 5 lower the Low Value Import Threshold. 1,000,000 Imports 500,000 Bicycle imports Recent trends have seen a reduction in 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 bicycle imports since the 2007/08 year. This fall continued in 2011/12, but only 4% from The industry the previous year and 13% from its peak in 2007/08. The greatest reduction came in and bicycle sales children’s bicycles which have fallen 18% Although participation has gone up during this period. significantly over the past 10 years, import Importation rates, although falling over the past three data has shown that sales increased at a years, are still 54% higher than importation rates in similar rate until 2007/08 but since that time, 1995/96. as participation has continued to grow, sales have started to fall providing the industry with the challenge of translating increasing Annual bicycle imports usage into greater sales. 1,400,000 Offshore online retailing and the 1,200,000 Low Value Import Threshold 1,100,000 800,000 As many bicycle related products are light weight, easily 600,000 transportable and valued under $1000, the industry is 400,000 acutely aware of the impact of the current threshold on the Australian bicycle retailer. This point has been 200,000 reinforced by offshore online retailers who have openly targeted the Australian market due to our economic 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/01 01/11 11/12 stability and tax regimes benefiting foreign retailers.