As prices continue to rise, more people become frugal. If something goes wrong in the Strait of Hormuz, a vital oil supply, it will further exacerbate price increases. Naturally, people will become more frugal in preparation for the crisis. Shopping will become limited to necessities, reducing spending on luxury goods. Consumers will first focus on reducing their purchases. On the other hand, from a producer’s perspective, frugality reduces sales. Companies will need to develop sales strategies to persuade frugal consumers to buy their products. This time, we considered consumer frugality in response to changing circumstances and corporate responses to this trend.
Road bikes gained popularity from the 2010s onwards. Even during the COVID-19 pandemic, demand surged as a sport with a low risk of infection. Many people were avoiding crowded shopping districts. By emphasizing the low risk of infection, a seller’s market was created. Amidst the tailwinds of the COVID-19 pandemic, demand surged, leading to significant price increases. Furthermore, the industry’s focus on selling high-value, high-priced products targeting road bike enthusiasts also contributed to these price hikes. Even after the pandemic subsided, road bike prices continued to rise due to increased performance, a weaker yen, and rising production costs. Some road bike models saw price increases of nearly 40% between 2020 and 2021. However, this upward trend has now faced headwinds. The number of road bike enthusiasts is limited; supply has become excessive to limited demand. Even prestigious Italian brands like Pinarello and Wilier have lowered prices by about 20%. This price reduction trend has spread to sports bicycles in general, with numerous price cuts on high-end bicycles.
On the other hand, some companies are seeing this difficult situation as an opportunity. Even with the price reductions, sports bicycle prices remain significantly higher than before the pandemic. Some enthusiasts are shifting to the used market or other sports. The boom in sports bicycles has subsided somewhat. There seems to be a growing trend among enthusiasts to seek out inexpensive bicycles. Chinese startups are entering this market. Chinese companies have accumulated the technology to provide products with performance comparable to major US and Italian companies at lower prices. Chinese companies are leveraging the technology they have cultivated through OEM (original equipment manufacturing) for major brands. Products made by startups from China and other countries are gaining prominence among enthusiasts. When bicycles have similar performance, some enthusiasts will choose cost over brand name. In times of crisis, it seems necessary to devise ways to capture consumer needs with products that keep prices down.
