Business history is littered with stories of boom and bust cycles, from the tulip fever of 1630s Holland to the Y2K dot-com bubble. Today, the cycling industry is going through one.
You might not have heard about it, but the Canadian biking world has been struggling through a rough patch going on four years now, with independent bike shops shuttering, bike manufacturers filing for creditor protection, and industry outlets publishing headlines like “The mountain bike industry is in free fall — and no one knows where it’ll land.” So, what happened?
During the pandemic, cycling took off like a BMX rider hitting a mega ramp. Urbanites looking for ways to commute that didn’t involve crowded transit options started buying road bikes to get around. Meanwhile, other people bored at home looking for something, anything, to preoccupy their time (besides binging Tiger King) spent a little bit of CERB money on a mountain bike and took up a new hobby.
Statistics Canada retail data during the spring, the peak sales season for bike shops, paints a clear picture. In the second quarter of 2019, Canadians made 455,104 purchases related to bicycles, biking equipment, and biking accessories. Then, in Q2 of 2020, when the pandemic was in full force, that number exploded to 699,657 — a staggering 53.7% increase. Purchases stayed elevated over the next two years, peaking in Q2 of 2022 with 729,942 such sales.
But in 2023, the smoothly paved asphalt suddenly turned into a rocky, tire-popping off-road. Supply chain snarls meant that many bike shops, which were already struggling to maintain inventory levels, simply didn't have the supplies they needed ahead of peak sales season. By the time those delayed shipments came in the fall, shops had missed out on sales opportunities, and the biking boom had started to fade.
“There was a complete under-supply during the pandemic,” explains Trish Merino, the parts lead and co-owner of Urbane Cyclist, a worker-owned co-op bike shop that’s operated in Toronto for almost 20 years. ”Then they had compensatory production, and there was way too much.”
Years later, bike shops are still dealing with the ripple effects and a market that’s now drowning in an oversupply due to the emergence of Asian D2C bike brands. Many stores now resort to price-slashing deals during peak sales season — which once would have been unthinkable — just to offload old models. At the same time, there continues to be a chronic supply shortage for bike parts. That’s a major problem considering parts and accessories are historically how shops do the bulk of their business.
“There’s a hesitance of vendors to dig in and buy the parts we need because shops are spending less money in response to people spending less money,” Adam Myers, another worker-owner at Urbane elaborates, “I don’t even blame the vendors. They don’t want to be stuck with excess inventory.“
Urbane has always been a commuter-focused bike shop rather than one dedicated to mountain biking or road racing, but it narrowed its focus even further upon moving to a smaller location last year after its old lease ran up. Urbane used to have its own line of bikes, with the basement filled to the brim with vehicles; that’s not the case anymore. “What we sell now is less spatially demanding,” Myers says. “We switched focus from more conventional bikes to oversized cargo bikes. Historically, we have way less than we used to.”
Many of these cargo bikes are e-bikes, a relatively new development in the cycling world, which also played a role in the COVID sales bumps as they were adopted en masse by the food delivery industry. It’s a product category that Urbane has seen an "exponential uptick” in interest and could be a path forward to reviving the industry, but only if it can clear some serious hurdles.
“When I rode my first e-bike, it was a transformative experience, like it is for many people,” says entrepreneur and urban mobility advocate Kevin McLaughlin, “[They] make it super easy to go places, in terms of not feeling tired or old or whatever.” In 2019, inspired by his first ride and looking for a new business venture, he founded Zygg E-Bikes, an e-bike seller and renter that bills itself as “the largest used e-bike retailer in Canada.”
However, much like their Luddite counterparts, e-bikes have fallen on hard times since pandemic highs. Over the past few years, some of the most popular D2C e-bike brands including Vanmoof, Rad Power, and Cowboy either went bankrupt or came perilously close to going bankrupt before being acquired, as they were unable to scale up at a sustainable rate. There are also persistent concerns about batteries catching fire (Rad Power in particular has been dinged for spontaneous combustion issues).
Today, Zygg is feeling the pressure to slash bike costs amid a wave of oversupply. It also found itself victim to supplier-related issues, plus changes to Canada’s education visa system ending the temporary policy that afforded international students unlimited off-campus work hours. This affected clientele in the food delivery sector, a major customer segment for Zygg.
“We have shrunk our own business considerably,” McLaughlin says. “We had a very expansionist, ambitious outlook, and have gotten small and focused on some of our core things. We’ll see how this year goes and what a future for us in the business looks like.”
Bottom line: The cycling industry is particularly cyclical — there’s a whole Wikipedia article dedicated to its various booms and busts — so it’s possible that a rebound is just around the corner. Still, it’s unclear if the bottom has fallen out, or if there’s further to go. If there’s a silver lining, many of those people who picked up cycling during the pandemic have kept on pedalling. “There are people who stuck with it and are really excelling at things like racing,” Merino says, “I find it inspiring.”—QH