Emphasis on Reducing Traffic Congestion and Safeguarding Environment to Boost Sales
From the logistics point of view, two-wheelers or bikes have remained the first choice of consumers around the world. Moreover, due to environmental, logistical, philosophical, and economical factors, the demand for bikes has remained consistently higher than that of cars particularly in the developing regions such as Asia Pacific, Latin America, and Middle East & Africa. Cargo bikes have garnered immense popularity in recent years, owing to the high user convenience quotient, minimum need for maintenance, and swelling traffic related challenges, especially in the urban regions worldwide.
As city roads continue to clog up at a rapid pace, cargo bikes have emerged as one of the most efficient and convenient mode of transportation for cargo companies due to which, the demand for cargo bikes has consistently moved in the upward direction in recent years– a trend that is likely to continue over the forecast period. In the wake of ongoing regulatory measures being taken to safeguard the environment, players operating in the current cargo bike market are increasingly focusing on the production of electric cargo bikes. A number of players operating in the cargo bike market is expected to expand their product portfolio in the upcoming years.
At the back of these factors coupled with considerable rise in the number of commercial deliveries in cities of various regions, the global cargo bike market is anticipated to surpass the US$ 6.3 Bn mark by the end of 2030.
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Demand from Developed Region on Rise; Cargo Bikes Gain Popularity as Eco-friendly Logistic Solution
Over the past few years, governments and other governing bodies, mainly in developed regions, are increasingly making efforts to address a range of challenges related to transportation and its impact on the environment. Several government as well as non-government organizations around the world are inclined toward increasing the adoption of cargo bikes as an eco-friendly urban logistics transportation alternative. In Europe, the City Changer Cargo Bike Project primarily aims to boost the usage of cargo bikes as a healthy, space-saving, eco-friendly, and cost-efficient mode of transportation in both, private as well as commercial uses.
A handful of similar projects across Europe as well as the other regions of the world is expected to have a positive influence on the global cargo bike market during the forecast period. The considerable rise in the number of such projects is anticipated to generate notable awareness among stakeholders operating across commercial, public, and private sectors. The surge in the usage of cargo bikes for private & commercial logistics and semi stationary applications is a clear indication that cargo bikes are swiftly gaining immense popularity around the world.
Furthermore, in nations such as Germany, in 2019, the sales of electric cargo bikes surpassed that of electric cars. Many European cities, including Amsterdam and Copenhagen are leading the way in terms of the usage of cargo bikes as a sustainable mode of transportation.
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Market Players Focus on Expanding Product Portfolio to Gain Advantage
Several companies operating in the cargo industry, including DHL, UPS, and Amazon have expressed the desire to test the potential of cargo bikes in New York City, and have introduced a pilot program to minimize the traffic congestion in certain parts of Manhattan. Local government bodies such as The New York City Department of Transportation are increasingly focusing on assessing the safety and feasibility of cargo bikes. Market players operating in the current cargo bike market are increasingly focusing on expanding their product portfolio and launching cargo bikes to strengthen their position in the market.
For instance, in August 2022, Tern announced the launch of a new electric cargo bike that is mainly developed for usage in urban regions. Similarly, in July 2022, Raleigh announced the launch of a new range of electric cargo bikes.
Cities Worldwide Prioritize Low-carbon Transport amid Ongoing COVID-19 Pandemic
The outbreak of the COVID-19 pandemic is anticipated to have a moderate impact on the overall growth of the global cargo bike market in 2022. A number of cities around the world has prioritized equitable and low-carbon transportation solutions, including bicycling and walking to ensure safety of residents. In addition, due to the increasing number of cases around the world, cargo bikes have emerged as one of the safest and the most feasible means of transport to complete deliveries, point-to-point services, and last-mile deliveries. Furthermore, as cargo bikes can be easily sanitized in comparison with cars or delivery trucks, the demand for cargo bikes amid the ongoing COVID-19 pandemic is on the rise.
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Cargo Bike Market: Overview
- The global cargo bike market is anticipated to expand at a CAGR of ~15% during the forecast period, owing to increase in consumer trend toward online shopping across the globe. Rise in the number of delivery vehicles, such as vans or trucks, is further adding to traffic congestion. For instance, statistics by the U.K. Government state that vans accounted for 15% of the total traffic across England in 2019. Traffic congestion causes road accidents and wastage of time and fuel.
- Urbanization is rising across various regions globally. In May 2018, the United Nations stated in a press release that 55% of the global population resides in urban areas, which is anticipated to reach 68% by 2050. This increase in urbanization has boosted the number of vehicles on streets and construction activities, which has led to congestion and traffic jams.
Drivers of Cargo Bike Market
- Rise in transport emissions is a major concern across the globe. Increase in the number of cargo delivery trips is further contributing to emissions levels. For instance, the European Union states that delivery trips account for almost 15% of all urban trips in countries across Europe, which results in high amount of fuel consumption and emissions.
- Several government disaster relief agencies including Arlington Office of Emergency Management are using cargo bikes to transport goods where other transport vehicles are unable to ride during hazards. Moreover, European Cyclists’ Federation promotes use of cargo bikes during emergency or natural catastrophes. Thus, increasing non-conventional applications are fuelling the demand for cargo bikes globally.
- Governments across the globe are initiating programs to reduce the negative impact of growing urbanization and the number of vehicles on the environment. Governments are encouraging people to adopt these solutions as an alternative to traditional delivery trucks, owing to the advantages offered by cargo bikes such as reduction in traffic congestion and tail pipe emissions.
Challenges for Cargo Bike Market
- The COVID-19 pandemic has caused a majority of businesses across the globe to crumble, owing to the forced shutdown of production and manufacturing activities. This has led the global economy to contract to its lowest growth rate. Majority of businesses in every industry is codependent and are a part of major supply chain in the market. Disruption in supply chain attributing to stoppage of transportation and shipping services and reduced demand for vehicles across the globe is likely to cause the global automotive industry to contract in Q1 and Q2 of 2022.
- Technological limitations of cargo bikes hamper their performance, thus hindering their adoption for heavy and long-distance freights. Electric cargo bikes have smaller batteries, which limits their range and requires frequent charging. The underdeveloped infrastructure for electric vehicle charging makes electric cargo bikes unusable for long-distance transportation. This creates a demand for advanced battery technology, which is likely to extend the range of cargo bikes.
Cargo Bike Market Segmentation
- The global cargo bike market has been segmented based on number of wheels, application, propulsion, ownership, and region
- Based on number of wheels, the three wheeled segment dominated the global cargo bike market. Three wheeled cargo bikes offer a highly stable ride, as compared to that offered by two wheeled cargo bikes. Additionally, the balance provided by three wheels enables minors to drive the cargo bike as well. Followed to three wheeled, the two wheeled segment is also estimated to hold a major share, in terms of revenue, during the forecast period.
- Based on application, the courier & parcel service segment held a major share of the global cargo bike market. Increase in preference for eCommerce shopping is a key factor boosting the courier and parcel service segment. Customers can have their online purchases delivered via cargo bicycle or rent cargo bicycles; therefore, several online retail stores and companies are focusing on business expansion in various regions to boost their global business reach.
Cargo Bike Market: Regional Analysis
- Based on region, the global cargo bike market has been segregated into North America, Asia Pacific, Europe, Latin America, and Middle East & Africa
- North America and Europe are projected to be highly lucrative markets during the forecast period. The U.K. Government invested in multiple ways to support the distribution of cargo bikes. Moreover, the demand for cargo bikes is increasing in France, Spain, and the Netherlands, which is likely to propel the market. Rise in awareness about cargo bikes across North America is projected to fuel the cargo bike market in the region.
Cargo Bike Market: Competition Landscape
- Key players operating in the global cargo bike market include
- BMW Group
- Butchers & Bicycles
- Cezeta, Douze Factory SAS
- Energica Motor Company, Govecs Group
- Harley Davidson
- Hero Electric
- Johammer E-Mobility GmbH
- KTM AG
- Mahindra & Mahindra Ltd.
- NIU International
- Rad Power Bikes LLC
- Riese & Müller GmbH
- Vmoto Limited
- Yadea Group Holding Ltd.
- Yuba Electric Cargo Bikes
- Key players operating at the global level are expanding their footprint by engaging in mergers and acquisitions with several players in the industry. In September 2019, Mahindra & Mahindra opened a new plant in Washington D.C., U.S., to strengthen its presence across the U.S., and the company invested about US$1 Bn for expansion of its production facility in the U.S. Niu International generates majority of revenues from sales of e-scooters to distributor’s offline or directly to individual consumers online. The company adopts an omni-channel retail model, integrating the offline and online channels, to sell e-scooters.
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