Study of the Impact of Driving and Restraining Factors on Ensuring
the Development Sustainability of the Bicycle Market in Russia
O. V. Astafeva
a
, D. V. Zhatikova and I. A. Osipova
Financial University under the Government of the Russian Federation, 49 Leningradsky Prospekt, GSP-3, 125993,
Moscow, Russia
Keywords: Bicycle market, risks of bicycle production, environmental factors.
Abstract: The aim of the work is to study the factors affecting bicycle manufacturers in order to substantiate the
feasibility of developing domestic bicycle production. The article examines the bicycle market and compares
the key characteristics of the largest domestic bicycle manufacturers, it also analyzes the influence of factors
in the far and near external environment on bicycle manufacturers in Russia and assesses the key risks. The
paper concludes that the Russian market is one of the most attractive from the point of view of the
development of the bicycle business in the world, since it is experiencing a great increase in the popularity of
the bicycle both for sports and for entertainment and also as a means of transportation for the population, the
number of domestic manufacturers is extremely small, and the market development potential is quite high.
1 INTRODUCTION
The worldwide COVID-19 pandemic and the self-
isolation associated with it have made people
appreciate outdoor moments. Since the spring of
2020, borders between countries have been closed,
fitness clubs have suspended their work. Cycling is
one of the few safe ways to relax and exercise that is
left available. The surge in demand for bicycles and
bicycle accessories was noticed by such large online
giants as Ozon, AliExpress, Wildberries and Avito.
According to the press service of the online retailer
Ozon, the demand for bicycles in April and the first
half of May 2020 increased by 36% across Russia
compared to the same period in 2019. The Russian
bicycle manufacturer Forward has also experienced
an increase in demand in the post-quarantine period.
For only five months of 2020, the enterprise produced
90% of the last year's annual production volume
(Interfax, 2020). As a result, it can be assumed that
the development of a project for organizing the
production of bicycles is a promising business idea.
The key research issue of the work is to study the
feasibility of starting up a bicycle production and
assess its effectiveness.
a
https://orcid.org/0000-0001-6445-4456
2 MATERIALS AND METHODS
In order to draw a conclusion about the feasibility and
possibility of effective functioning of domestic
bicycle production, it is necessary to analyze the
Russian bicycle market, identify its growth potential,
and study the key market players. In this regard, in the
preparation of this scientific article, a wide range of
information sources and research tools were used:
- data from Rosstat, Wordstat.yandex.ru,
marketing agencies and large online marketplaces;
- survey of owners and buyers of bicycle shops;
- the information about the activities of bicycle
factories, which is freely available on the network;
- communication with the employees of sports
shops and the use of one’s own knowledge in cycling
topics.
Due to the fact that in the modern world more and
more attention is paid to the issues of a healthy
lifestyle, in recent years there have been many
scientific works and articles devoted to the study of
the problems of cycling and its influence on the
physical activity of the population. Among such
works are scientific articles by Astafeva O. V.,
Nizeev A. D., Osipova I. A., 2020; Bakota D,
Ortenburger D, Płomiński A., 2018; Fiore D.C.,
264
Astafeva, O., Zhatikova, D. and Osipova, I.
Study of the Impact of Dr iving and Restraining Factors on Ensuring the Development Sustainability of the Bicycle Market in Russia.
DOI: 10.5220/0010698300003169
In Proceedings of the International Scientific-Practical Conference "Ensuring the Stability and Security of Socio-Economic Systems: Overcoming the Threats of the Crisis Space" (SES 2021),
pages 264-269
ISBN: 978-989-758-546-3
Copyright
c
2022 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved
Fellows K.M., Henner T.A., 2020; Geurts E., Coninx
K., Hansen D., Dendale P., 2018; Kireeva N.S.,
Slepenkova E.V., 2019; Kolumbet A.N., Natroshvili
S.G., Babyna T.G., 2017; Perfilova I.A., Dyshakov
A.S., Graham C., 2020.
3 RESULTS AND DISCUSSION
3.1 Analysis of the Bicycle Market and
Its Potential in Russia
There are currently a small number of domestic
bicycle factories in Russia. On average, this market,
together with imports, is about five million bicycles
and bicycle frames. The largest part (about 60%) is
imported and 40% of bicycles are produced in the
territory of the Russian Federation. Most two-
wheeled vehicles are assembled on the site from the
parts shipped from China.
Despite the growing demand every year, the
number of bicycle brands is growing at a very slow
pace In Russia. At the moment, the main bike brands
on the domestic market are Stels, Forward and
Stinger, as well as small sub-brands of the same
manufacturers, but with a narrower segmentation,
such as Altair and Format - from a Perm
manufacturer, children's bicycles Novatrack - from
Kaliningrad Stinger bicycle manufacturers. Stern
bicycles are produced for Sportmaster, a large retail
sporting goods store. The main parts are imported
from China, but the assembly and engineering are
entirely carried out in Russia. The key competitors
today are Velomotors (Stels bicycles) and Forward,
which divide the market geographically: a home
region for Stels - is Central Russia, that is why their
bicycles are most often bought here, but in the Urals
the situation is different, and the number of Forward
bicycles is prevailing. In general, the bicycle market
is poorly represented by the strong authentic brands
with a good reputation, while the demand for bicycles
of good quality with a stable and strong image is
growing.
In parallel, new Russian brands of bicycles are
developing simultaneously with them, which make
both design and engineering in Russia, while the
production of spare parts and components is
completely imported from China. One of the brightest
and rather successful representatives of this group is
the Shulz bicycles from St. Petersburg. These
bicycles have become very popular in different
regions of our country, mainly for their lightweight
and comfortable folding frames and an adequate
price. A little later, this manufacturer also launched a
line of children's bicycles, which a lot of buyers
throughout the country took a liking to. Another
brand from this category is Stark bicycles, which are
the result of joint work of Russian and German
specialists. Their production is located in Taiwan.
This brand offers budget-friendly, but quite high-
quality models. Let's compare the listed bicycle
manufacturers according to certain parameters in
table 1.
Table 1: Comparative characteristics of Russian bicycle manufacturers.
Brands /
Parameter
s
Stels Forward Stinger Stern Shulz Stark
Forward Format Altair Adult
Stinger
Child
Novatrac
k
Types of
bicycles
sold
Urban,
mountain,
children's,
road, folding,
racing, cargo,
BMX
Mountain,
urban,
children's,
road, folding,
racing,
electric
Mountain,
urban,
children's,
road,
BMX,
racing
Mountain,
urban,
children’s
Mountain
, urban,
road,
BMX
Children'
s,
folding
Mountai
n, urban,
children
’s
Folding,
children’s,
road
Urban,
mountain,
children's,
folding,
BMX
Target
audience
Couples with
children;
residents of
megalopolises,
medium-sized
cities and small
settlements
Couples with
children; aged
people who
care about
their physical
condition
Profession
al athletes,
young
people
aged 20-
35 years
old
Students
aged 18-
26;
families
with
incomes
below
average
and
average
Professio
nal
athletes;
residents
of
medium
and small
towns
Couples
with
children
buying
bicycles
for their
children
Middle-
income
families,
male
half of
the
populati
on
Students
aged 18-26
years old,
young
people aged
20-35 years
old, families
with
children
Young
people
aged 20-
35 years
old,
students
aged 18-
26 years
old;
residents
of
megalopol
ises
Study of the Impact of Driving and Restraining Factors on Ensuring the Development Sustainability of the Bicycle Market in Russia
265
Table 1: Comparative characteristics of Russian bicycle manufacturers (cont.).
Sales
market
Stels dealer
network
throughout
Russia (mainly
the central
part),
specialized
sports retail
stores, online
stores and
marketplaces
Specialized bike shops both online and
retail, Forward dealer network throughout
Russia (most of it is in the Urals)
Stinger dealer
network throughout
Russia (mainly the
northern part),
specialized bike
retailers, online stores
and marketplaces
Own
network
of chain
retail
stores
Sportma
ster
through
out
Russia,
specializ
ed
online
stores
Sportma
ster and
Stern
Dealer
network of
specialized
bicycle
stores, own
branded
retail stores
Shulz
(Moscow,
St.
Petersburg)
and online
store
Shulz.ru
Stark
dealer
network
throughou
t Russia,
specialize
d sports
retail
stores,
online
stores and
marketpla
ces
Price
category
3000 – 66000 4200 – 37000 13000 –
230000
3600 –
23000
18000–
104000
4000 –
20000
2500 –
52000
8000 –
64000
7300 –
86000
Competiti
ve
advantage
The widest
range of
bicycles within
one brand,
affordable
price, the
oldest factory
with the
maximum
degree of
localization
and production
automation
High
manufacturab
ility of
production,
development
of new
models in
accordance
with
international
standards
with the
involvement
of
professional
athletes
The only
brand of
Russian
origin,
positionin
g itself as
a
manufactu
rer of
premium
bicycles, a
profession
al bicycle
team of
the brand
Affordabl
e cost of
bicycles,
high-
quality
Russian-
made steel
frames
In the
basic
segment,
well-
adjusted
geometri
es and
designs
of
bicycles
Wide
range of
children'
s
bicycles,
safety,
the best
value for
money
in its
segment
Good
brand
represen
tation in
its own
Sportma
ster
network,
large-
scale
advertisi
ng
campaig
n
Compact
design and
lightness of
frames, ease
of
transportatio
n and
storage; a
variety of
colors of
models and
the use of
design
solutions
Robust
frame
constructi
on; a high-
quality
line of
bicycles
for
extreme
riding,
performin
g tricks of
varying
difficulty
Let's also compare how the market share is
distributed between the top 5 largest Russian bicycle
manufacturers by distribution base - revenue for
2020. According to SPARK, the total revenue of the
main companies registered in Russia is
11,699,787,000 rubles. The largest market player at
the moment is “Velomotors+” LLC, which has two
more plants – ZhVMZ LLC in Zhukovka (Bryansk
region) and KVMZ LLC (Krasnodar Territory),
producing Stels bicycles, with a revenue of
8,892,319,000 rubles. The second place is occupied
by the company "Forward", its revenue –
2,358,579,000 rubles. The third place on the market
is occupied by LLC "TK Ateil", with their Stark
bicycles, their revenue - 254,379,000 rubles. The
fourth group is “Shultz” LLC (revenue – 191,938,000
rubles), which produces folding bicycles and
children's bicycles. And the fifth place - LLC
"Velobalt” Production Association" (Stinger
bicycles) with a revenue of 2,572,000 rubles, which
however, over the last year have somewhat lost their
positions in the market.
3.2 Assessment of the Impact of
Factors of External Environment
on Bicycle Manufacturers
The success of bicycle production depends not only
on the availability of demand in the market, but also
on many other factors in the far and near external
environment.
The external distant environment exists
independently of the project itself but has an indirect
effect on it. It primarily includes the authorities, the
public, the political and economic situation in the
country as a whole. Depending on the policy of the
state, customs conditions can be improved, domestic
producers can be supported, for example, with the
help of protectionist policies, tax legislation can be
tightened, subsidies and special economic zones can
be canceled. It is necessary to cooperate with the
Administration of the city where the production will
be located, to pay attention to the current policy of the
Government of the Russian Federation. The
economic situation will determine the solvency of the
population, the level of prices for the components and
equipment, as well as the wages of craftsmen. The
public will form an opinion about the company, it will
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include the cycling communities of Russia ("Let's
bike it!"), accounts on social networks of bicycle
viewers, creators of bicycle parades and bicycle
masters, exhibitions of bicycle industry goods (Bike-
Expo 2021, Velo (bike) Park 2021), transport and
educational magazines (Velomoskva). Also, the
project will be influenced by the cultural component.
As of today, the fashion for healthy lifestyle is only
gaining momentum, and the bicycle as a means of
transportation and walking is becoming more and
more popular, therefore, the cultural environment is
undoubtedly an important element of the external
environment. It is necessary to take into account the
relationship with the coordinating and control bodies
(ministries, services, inspections), such as the fire
inspectorate (Ministry of Emergency Situations of
Russia), which monitors fire safety at the enterprise;
tax inspection; the labor inspectorate, together with
the Pension Fund of the Russian Federation and the
Social Insurance Fund, regulate the observance and
compliance of labor legislation and the correct
calculation of benefits; Rospotrebnadzor (Russian
Federal State Agency for Health and Consumer
Rights), which will control everything related to the
quality and safety of production areas (lighting, areas,
sanitary and epidemiological situation) and the
products themselves - bicycles; Rosprirodnadzor
(Russian Federal Service for Supervision of Natural
Resource Usage and Ecology) - compliance by the
enterprise with the norms of emissions of harmful
substances into the atmosphere, waste disposal;
Roskomnadzor (Russian Federal Service for
Supervision of Communications, Information
Technology, and Mass Media) - checking the
collection, storage and processing of personal data; as
well as the prosecutor's office, which exercises
general supervision over the activities of the
enterprise.
The external environment has a direct impact and
includes the areas of finance, sales, supply and
infrastructure, buyers, investors and competitors. The
sphere of finance will include: the Entrepreneurship
Support Fund, the Export Support Center, a soft loan
for business from a bank, subsidies from the budget
for the development of domestic production. Sales
sphere: own branded bike shops, specialized bike
online stores (velosite.ru, velosklad.ru, velostrana.ru,
bike-center.ru), large marketplaces (wildberries.ru,
ozon.ru), specialized dealer bike shops countrywide.
The scope of supply: partners in the supply of bicycle
frames made of aluminum alloys and carbon in China
(goldenwhelgroup.com, trinx.com), leading suppliers
of parts and components such as Shimano (gearshift
clutch/derailleurs), Sram, Tektro, Kenda, Maxxis,
Suntour. The infrastructure: brand stores, corporate
cars, provision of Russian cities with bike paths, bike
parking lots, special road signs, bike zones in parks.
Buyers will have a key influence on the product, as
the supply of bicycles will depend on the demand and
their preferences. Investors are needed to launch the
project itself and to ensure its normal functioning.
Competitors that already exist on the market occupy
a certain share, they have their own competitive
advantages, presented earlier in paragraph 3.1.
3.3 Risk Register of Bicycle Production
in Russia
Before launching production and starting its
activities, it is necessary to assess all kinds of risk
events that may arise at any stage of the project
implementation, in order to be ready for them and
know how to act in a given situation. The risks of a
bicycle production project can be divided into 4 main
blocks: technical, organizational, external and project
management risks (table 2).
Table 2: Risk register.
Risk category Description of the risk and
the consequences of its
realization
Possible consequences of
risk realization
The
likelihood
of a risk
even
t
Risk reduction measures
Technical risks Non-compliance of the
product with quality
standards
Quality: the end product
is virtually useless
0,4 Constant control over all production
processes, careful selection of suppliers
Equipment malfunctions Timing: increase in time
- by 10-20%
0,42 Timely accrual of depreciation charges
for equipment, subsequent repair or
replacement of equipmen
t
The complexity of building
a continuous production
process
Content: Main content
areas are covered
0,2 Competent planning of production areas,
building the production cycle based on
the principles of lean production
Lack of production and
storage facilities
Timing: increase in time
by 5-10%
0,12 Assessment of the need for the number
of square meters for the production of a
unit of production at the planning stage
Study of the Impact of Driving and Restraining Factors on Ensuring the Development Sustainability of the Bicycle Market in Russia
267
Table 2: Risk register (cont.).
Purchase of defective
equipment
Cost: increase in cost by
20-40%;
terms: increase in time
b
y 10-20%
0,56 Purchase of production equipment only
from verified and certified importers
Purchase of low-quality
components
Cost: increase in cost by
10-20%;
terms: increase in time
b
y 5-10%
0,3 A careful approach to the selection of
suppliers of components
External
environment
risks
Changing the system of
product quality indicators –
GOST (State Standards of
quality)
Content: Minor areas of
content are slightly
covered
0,02 Development of a system for rapid
response to changes
Tightening of customs
legislation
Cost: cost increase by
10-20%
0,12 Search for alternative suppliers in the
domestic market
Strengthening the
competition
Content: Minor areas of
content are slightly
covered
0,1 Identifying the strengths and weaknesses
of competitors, strengthening one’s own
competitive advantages
Failure by contractors to
perform preparatory repair
wor
k
Timing: increase in time
by 5-10%
0,12 Finding reliable contractors at the
planning stage
Disruptions in time and
volume of supplied
components
Timing: increase in time
by 10-20%
0,54 Conclusion of contracts with trusted
suppliers, fines for violation of the
specified deadlines
Organizational
and managerial
risks
Lack of funds Timing: increase in time
> 20%
0,72 Thorough preparation of the project plan
and assessment of all incidental costs
Breaking partnerships with
spare parts suppliers
Timing: increase in time
b
y 10-20%
0,28 Conclusion of agreements on mutually
b
eneficial terms
Failure to comply with the
planned deadlines for the
performance of work and
the sale of goods
Content: Main content
areas are covered
0,42 A more thorough study of each moment
at the stage of project initiation
Insufficient qualification of
hired production workers
Quality: Downgrade
requires investor
approval
0,42 Continuous training and retraining of
personnel, sending personnel to
complete retraining courses
4 CONCLUSIONS
Based on the conducted research, it can be concluded
that the greatest risk for the company is borne by
organizational and project management risks: lack of
funding, disruptions in time and volume of supplied
components, purchase of defective equipment.
Without money and without spare parts for
assembling the main manufactured product –
bicycles, the operation of the enterprise is impossible.
Defective equipment will negatively affect the
deadline for the implementation of the plan and will
not allow the enterprise to carry out the production
process as a whole. The least probability of
occurrence and minimal damage are suggested by the
following areas: changes in GOST quality standards
(an unlikely event), insufficiently effective
interaction between top management and the project
group (project team members are professionals in
their field, they will not enter into conflict with their
employers) and increased competition (enterprises,
producing bicycles on the Russian market have been
around for many years and have a clear positioning,
which makes it possible to assess their future policy
in advance). Great attention should be paid to the
selection of suppliers, it is necessary to carefully
check the quality of the supplied equipment, to
establish cooperation with state business support
centers to obtain additional funding.
At the same time, it is profitable in Russia to open
the production of bicycles and develop cycling, which
is not only a convenient way to travel around the city,
but also supports the physical activity of the
population and contributes to the development of a
healthy lifestyle in the country.
The results of the study can be useful both for the
developers of programs for the development of small
and medium-sized businesses in the national
economy, and for organizations supporting healthy
lifestyle initiatives.
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