Some thoughts on the Cycling Industry in 2023
Just a quick note to share some thoughts about the interesting state of the cycling industry, as we see it.
The market background (well documented)
The cycling industry saw unprecedented demand during lockdown as both beginner and experienced cyclists rode more and stocked up accordingly. At the same point the industry supply chain was buckling, meaning that brands simply couldn't restock their inventory and when that became possible they increased their orders on the expectation of prolonged strong demand. 2022 and 2023 has seen weak trading conditions as individuals have seen disposable income squeezed by higher housing costs and inflation not seen for a generation.
Current state of the cycling industry (how we see it anyway!)
The cycling press has been active recently highlighting the gloom in the sector and from the public sources as well as the grapevine there have been some interesting developments. Firstly, WIGGLE/Chain Reaction Cycles has initiated an administration process on the back of spiralling losses. It's only a personal opinion but as a user of their App and consumer that their offering has become a lot less compelling in recent years and they seem to have stumbled badly in their online offering. Wiggle used to have an almost captive market of App users that were attracted by the low prices, wide selection and frankly minimal competition from other ecommerce retailers. All of those factors have swung against Wiggle during and since lockdown. The rise of Google Shopping as well as BREXIT have exacerbated the problems for Wiggle but it could be argued that Wiggle under its current ownership has contributed to its own downfall.
Secondly, and as an indicator of general performance, recent filings show that Rapha slumped to its 6th consecutive year of losses in 2022, with the loss widening for the year. Obviously, we don't have a crystal ball but it would seem that unless they manage to pull a rabbit from the hat that results are unlikely to improve for calendar year 2023. Other brands have also been reported to be scaling back operations and headcount and you would have to have your own head in the sand not to have noted the dramatic discounting as brands seem to be desperate to liquidate stock. It should therefore be expected that there will be a number of brands restructuring or shutting their doors in the year ahead, so what's behind this? From our perspective it seems apparent that the run up to and sale of Rapha created something of a frenzy with brands and investors who suddenly saw the possibility of growing and then selling a brand for large gains, with the priority given to purely growing sales and market share. This focus on sales rather than profitability may have made it challenging for some brands to continue as they are in the medium term. Will some brands scale down their purchasing or exit, only time will tell!
How does INVANI fit into this?
This piece isn't intended to be patronising towards other brands and we are absolutely in no position to judge, lecture or to criticise different strategies but having chatted with many of you at events you'll know we have only ever tried to grow the company on an organic/sustainable basis rather than ploughing money into marketing to try and achieve market share growth at all costs. As a result we've seen steady growth, but in a way that can be sustained for the next 2, 5 and 10+ years without the need for external capital bail-outs. At the same time we are improving our product line-up and receiving great reviews from both customers and industry reviewers so the company is well positioned, albeit in a market that is very weak.
Against the very weak market conditions and with a sustainable approach it is therefore pleasing to note that our sales will be up rather than down in 2023 compared with 2022, which we suspect will be unusual compared to other brands. That said, INVANI is still a really small company and we will need to see growth year-on-year to make it viable just on the basis of achieving a sensible scale.
While we aren’t looking for any favours and we know we have to really earn your interest and hopefully on occasion your decision to buy something from us, we would absolutely love to think that you can at least think of us and click onto www.INVANI.cc if you're looking for something that we offer. Your support is always hugely appreciated!
In other ways that you can help us without dipping into your pocket, it would be amazing if you can share any content that you like from us with your friends or social media, similarly if you're wearing our kit and posting photos then please tag us to help raise awareness amongst your followers. Also, if you weren't already aware, we run a Referral Programme for our customers whereby your friends can buy kit with a discount and you receive a credit note for a portion of their spend (see details at www.invani.cc/pages/rp ). If you haven't already received your referral code or would like to be reminded then please email us at firstname.lastname@example.org and if you have your code then please share it with your friends in any way you see fit (over a mid-ride coffee, on a group WhatsApp, including the code on your Strava or Instagram profile pages or any other way you think might help get your friends interested!
If you've read down this far then thanks for taking the time and also thanks for all your support to date! The comments section is hopefully enabled so please feel free to share any thoughts you have!