Brand review E-bikes: which brand is pedaling its way to higher market share?

Brandreview is an initiative of Validators in collaboration with VU Amsterdam and Dynata, aimed at gaining insight into brands and their mental market share in the consumer’s mind. Each month, we take an in-depth look at a specific industry to familiarize brands with this approach. The previous analysis focused on energy providers. This time, we’re sharing the findings from our research into the e-bike market.

Popularity of E-bikes continues to rise

The fast, electric version of the faithful steel steed has become indispensable on the streets. Since 2013, after several years of decline, the bicycle industry has seen an increase in total sales again. And the role of the E-bike has been decisive in this. Whereas in 2010 only 14% of newly sold bicycles were electric, in 2022 this will be as much as 57%. This trend also ensures that the average spending on a new bicycle increases year on year. After all, an electric bike is a lot pricier than a muscle-powered one. This immediately raises the question for us, how do consumers choose a brand and which parties are well represented in the minds of potential buyers. We set out to investigate.

Everyone looks for convenience, young people also look for speed

To effectively build your brand, mere top-of-mind awareness is not enough. As a brand, you must understand what needs and reasons a consumer has for choosing a brand within an industry at the time of orientation and purchase. Within those needs, you must be considered as a brand to achieve growth. For the E-bike market, 16 needs were examined. Through qualitative research, these needs were identified and then a quantitative study was conducted to measure how relevant these needs are and which brands connect to them. The greatest need an E-bike fulfills is to make cycling easier and more efficient. This is the most relevant Category Entry Point (CEP) for choosing an electric bike (79%). The electric two-wheeler is also a motivator to cycle more (69% relevance). E-bikes are also chosen as an alternative to the car (63%) and for daily transportation (62%). Among the younger group (18-34), besides convenience, it is highly relevant that the bicycle gets them from A to B quickly (80% versus 42% among 55+).

Dutch Batavus claims the Dutch CEP

The relevance of a CEP is an important metric, but it is essential for a brand to know the extent to which it is considered within a particular need. In the E-bike industry, few needs are really claimed yet. Only Batavus has a strong claim to a need, the good price/quality ratio. Thus, should a consumer be looking for a good affordable E-bike, Batavus will occupy a prominent position in the brain. Otherwise, no clear claims can be observed within the industry, which presents opportunities for brands to commit more to a CEP.

Looking at specific age groups, we see that Stella has a strong position among young people on "Easy and efficient cycling," the most relevant CEP among this group. Stella also scores well on "Price." Competition comes mainly from Sparta, which also has a good position on "Price" but is also pre-eminently the brand "For daily use."

Another striking difference is that young people have relatively high reach for many brands but low network size. This means that young people consider many brands, but the

average number of reasons to purchase an E-bike is low for them. The older target group, on the other hand, is considering fewer brands, and thus has lower reach, but higher network size. This shows that there are opportunities for increasing reach among the older group. Consider the use of ATL materials.

Gazelle and Batavus mental market leader

Within the growth market for electric bikes, Gazelle and Batavus lead the way, claiming the highest mental market share. This means that in the 16 needs, they are the most considered. But competition is lurking. The mental market share of both brands is lower than the real market share. This means that the brand is thought of less often in a need situation than it is bought. In the long run, this is a threat because other brands are more often considered and, as a rule, more likely to be bought. So, for Gazelle and Batavus, the key is to nestle more prominently in the minds of consumers for higher mental availability.

Demand for E-bikes stagnates, opportunities for strong brands

After several years of growth in the industry, after a wet spring and an economically depressed summer, it looks to be a down year for electric bike manufacturers. After VanMoof's bankruptcy last July, Dutch company QWIC was also declared bankrupt on Nov. 21. Stella also recently went through a reorganization. After the peak in sales during the corona pandemic, it is increasingly important to be considered as a brand when consumers are looking for an electric bike. Here a good mental position is vital. If you are not considered when the need is highest, the brand is less likely to be purchased.

That means brands that have a higher mental consideration than real market share can start to benefit. Sparta and Giant score well on this and should start converting this to real market share. Lesser brands like Amslod and Veloretti are also on the right side of the line and have pole position to grow in the coming period. The established brands, Gazelle and Batavus, also need to get going. They need to make sure they are no longer considered just for general awareness but start building relevance on specific CEPs. Batavus scores well on "Price" among the 55+ group but claims no need among the younger group. A potential risk for the future.

For the youngest group, speed is very relevant. Currently, this CEP is not claimed by any brand. Who is going to capitalize on this? Or will this go entirely to the hugely popular fatbikes? It will be an interesting period for the industry that we will obviously follow closely.

Do you have any questions about this study? Please feel free to contact martin.leeflang@validators.nl.

Collaboration with Vrije Universiteit Amsterdam

In 2018, VU Amsterdam and Validators launched the Institute for Brand Analytics. The goal of this collaboration is to make brands steerable and market share measurable in the minds of consumers. After four years of research on over 300 brands, we arrived at a method that could measure the strength of brands and make predictions about market share.