It's a chain reaction as masses shell out for shiny bikes

LIKE Mulga Bill from Eaglehawk, we have caught the cycling craze.

And like Mulga Bill, many of us are buying the latest shiny machine. Revenue in the bicycle industry is set to grow by 17.2 per cent over the next five years, topping a staggering $3.2 billion, according to the research analysts IBIS World.

More than 2 million Australians now ride regularly and while many are giving their old bikes a squirt of WD-40 and getting back on the road, a large slice are spending up big in cycle shops.

The average price of a sports bike in Australia is $2800, says IBIS World's senior analyst, Ian MacGowan, who says really serious enthusiasts may have several sets of wheels.

About half the market is for children's bikes but that has declined significantly due to the financial downturn.

"Kids' bicycles have struggled in the last couple of years, particularly with the GFC with consumers significantly cutting back on spending over that Christmas period," Mr MacGowan said, while "a lot of [the resurgence in sales] has come from the commuter market: people who are picking up the bike and using it as a regular form of transport commuting to work, or school or uni or whatever the case may be."

Kane McLachlan, of Ashfield Cycles, confirms both trends in his store. "For us here in Ashfield, to the city it's 10 kilometres. It just makes sense - more people are becoming aware that the journey on a bike is definitely a better option. There's more bike paths coming around and it's getting a bit more bike friendly as well."

More bike paths as well as the growing cost of fuel and a general sense of becoming more environmentally aware are all factors in the growing trend.

Mr McLachlan said not all aspects of the craze was translating into revenue for the shop as he could not compete with websites selling accessories for up to 20 per cent less than he can. He focuses on service that keeps customers coming back.