Luxury Bikes for the BRICS!

New format: Idea up front, explanation later.

Idea: Luxury bicycles marketed specifically to emerging economies

Explanation: Anyone who knows me, or who reads my other blog, knows that I will go to great lengths to ride my bike, even if only for short lengths. Because of my appreciation for these machines, I now posit the Maus Hypothesis of Bicycle Appreciation. 

My hypothesis is thus: that the appreciation for bicycles in a given country or society correlates to income along a U-curve. That is, in the poorest of countries, where bicycles are ubiquitous, they are appreciated for their many functions. Here in Uganda, bicycles serve as taxis, pushcarts, and even, as bicycles.

As incomes increase, appreciation of bicycles lowers. Because bicycles are associated with the days of poverty, they are shunned by the new rich who see cars as a status symbol.  But at the highest income levels, bicycle appreciation recovers. Here, people now have time for recreation, and thus view bicycles as fun. Also, in some places, cars have become so passe that they no longer carry value as a status symbol, and in densely populated urban areas, have diminished value as a mode of transport.

Here is how I would visually depict this hypothesis:

Obviously, there would be some outliers on this graph. The US has higher incomes, but lower appreciation for bicycles, due mostly to America’s deeply entrenched car culture, and low levels of physical fitness (although this is perhaps both cause and effect). Additionally, in some poor countries, say Mongolia, cycling has never gained widespread acceptance due to geography or culture. Also, keep in mind that the y-axis plots appreciation not usage of bikes.

It’s mostly in the emerging markets that bicycles face the biggest challenge. I’m thinking specifically of the BRICS – Brazil, Russia, India, China and South Africa, and even more specifically of India and China. The BRICS account for over 40% of the world’s population, a quarter of its landmass and most of its current economic growth. Thus, the transport and lifestyle habits of people in these countries will have a massive impact on the future of the planet.

As I’ve suggested, bicycles are by no means scarce in these countries. But as soon as people have enough money, they usually trade them in for automobiles. There might be any number of reasons someone decides to purchase a car, but I would guess that the main one is status. After all, if you live in China or India, and you’ve ridden a bike your whole life, it’s probably because that was all you could afford. If you continue to ride a bike, people will assume your situation hasn’t changed. But driving a car will make it clear that you’ve done well for yourself.

If 1.4 billion Chinese people and 1.2 billion Indians start driving cars at the same rate as Americans, it’s curtains for those countries’ infrastructure and air quality. As in the US, the individual desire for status will probably trump any feeling of societal obligation.

If I’m correct that people buy cars to display their wealth and status (it’s hard to explain any functional benefit to having a car instead of a bike in Beijing or Delhi), the disadvantage of bikes is that they are associated with poverty, rather than wealth.

But not so for the luxury bike!

How is a luxury bike different from any other bike? In the same way that an Acura is different from a Honda: different branding and nicer accessories. A solid bike with a plush leather saddle, brake and shift levers made of chrome or some other unnecessary metal, and the right brand name on the frame could quite effectively convey one’s status.

Coming soon to a bike near you?

The production and manufacture of these bicycles would be the easy part. The branding and marketing would be more difficult. We could either try to develop a brand from scratch, equating our bikes with power and sophistication and recruiting a celebrity or two to endorse the brand. Or we could licence the name of an existing luxury brand, e.g. build our bikes and then paint the name ‘Gucci’ on then (and then perhaps encrust the name with diamonds).

These bicycles would be marketed to the fast-growing middle classes in emerging economies. This segment has shown a high degree of brand consciousness and is at highest risk of buying a car.

Who wants to go in on this venture???

3 responses to “Luxury Bikes for the BRICS!

  1. The Gucci logo already looks like a bike. It’s a natural fit. I’m in.

  2. I can personally attest to the validity of much of the Maus Hypothesis, nepotistic biases aside.

    As a not-yet-employed youth, the bike was the ticket out of the neighborhood and into the jungles of the Minnesota River bottoms. It was ever-so-appreciated for the swift and free-of-cost change of scenery that was available at the simple push of a pedal.

    This is where the correlation with the MH gets a bit murky. Upon my gaining employment, both a luxury bike and an automobile were purchased, although the beautiful young French Motobecane sported a higher acquisition cost and logged more miles than the tired old Plymouth Fury. Further, a second luxury bike was traded even-up for another car when the number of working bikes exceeded the number of working cars.

    Then, the correlation tightened up once again. With the price of the most desired car hovering at several multiples of that of the best luxury bike, the balance of power shifted. The stable filled with more bikes than cars and remains in a comfortable equilibrium to this day.

    The concept of plastering a luxury brand on hopeful bicycles has a few precedents. In the 1970’s Maserati had a go that failed, and more recently Cadillac did the same, with similar results. Perhaps your idea of the Gucci name, or something in the fashion segment, would be better positioned than a dead-before-it-began direct car-to-bicycle crossover.

    If you’re in need of a premium bicycle constructeur for the venture, I know of a chap, and so, genetically speaking, do you. I, ahem, he, could even source the requisite diamond specks, albeit of an industrial grade. Methinks the covetous BRICs would be sufficiently impressed that they would pony up in droves. To ensure viability however, payment in precious metals would be required, as opposed to any form of paper currency.

    It appears we have at least one investor teed up, so it’s all downhill from here!

  3. Interesting Idea but having just returned from India 1800 new cars are registered every day in Delhi but what became very apparent in most of india is that the new bicyle has become a honda motorbike or vespa scooter which has fit into the frantic pace of life that has evolved as a result of the cell phone . With the mass urbanization that has occurred and distance to work has expanded the utility of biking to work has decreased. Having said that if one assumes that 1/2% of the population could afford the luxury and would want the status symbol in a country where that is important , recognizing that for it to truly appeal it would have to be a tandem bike so that it would employ a driver/security guard it could mean a potential market of 5-6 million customers. If some how one could persuade the population to substitute a white luxury bike for a grooms white horse in the wedding ceremonies it could raise the market size considerably

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