The bike is back! 30 years after China started to switch two wheels to four, people are starting to use again bikes but today it is all about bike sharing. Indeed, one of the first pioneer in this project was Mobike financed by Tencent and Chinese investment firms. The competition in the market is quite fierce. Another major actor is Ofo that is banked by the drive APP Didi.
However, these two competitors are not targeting the same market. In one hand, Mobike is a high-end branding segment with flashy orange wheels, incorporated satellite navigation. At the beginning the production cost was around 6,000 CNY but now there is a lighter version with a production cost between 200 and 500 CNY per unit. In the other hand, Ofo is focusing on students with their yellow bikes and cost around 250 CNY. They have a sharing economy model.
A funny fact about Ofo is that you can share your own bike. You can offer its services from one to three years and the company is going to repaint it in yellow and put an Ofo lock and plate on them.
Another competitor in this market is Xiaoming bike. The color of their bike is blue.
How can we compare these three actors?
Let’s compare these three actors on different characteristics:
They are not the only competitors in the market. Another actor is Bluegogo:
- Presents in Chengdu, Guangzhou and Shenzhen, their bikes weight 15kg, they have a GPS for localization and use QR code to unlock.
According to the latest news about this market, we were able to count around 17 other companies that offer the same service. It is possible to explain the market trend thanks to the governmental and private investments they offer for that kind of service. There are other companies such as HelloBike, 1 Step Bikes, Uni Bike…
How is it going so far for these companies?
So far they could not really complain. Everything goes smoothly, they have more and more users even if the competition is quite fierce between the different actors in this market. The latest numbers told us that Ofo has reached 20 million users and they have 51.2% share of the market for 40.1% for Mobike.
However, there are some downsides. The users of these bikes are leaving them a bit everywhere… They are even on communal parking spots. That is why the police is doing some heaving lifting with governmental trucks to move the bikes from these specific spots because it can be a burden for the residents, the shop owners and even those who own a bike or a scooter.
Another problem has appeared… These companies will have to face some challenges about the maintenance, management and also the existence of unscrupulous users who damaged or disappeared with the bikes. We have found some bikes being sold online. This problem is better supported by the actors with big investments (Mobike and Ofo) than the small companies that can be a life or death struggle for them.
As we can see, the competition in the market is quite fierce. The major actors try to have more and more investment from external parties. For instance, Ofo has just secured 430 million USD in its Series D financing and a few days earlier, Mobike received as well a new investment from Singapore based Temasek Holdings. It seems to be the main strategy to conquere the market and we can clearly see there is an intense competition between Ofo and Mobike to see which company will get more investment than the other.
Finally, you can see that even for these companies there are some cities in China that are not really bike-friendly… Let’s take the example of Chongqing called “Mountain City”.
What are the objectives of this new trend in China?
The main "official" objective of this new trend in China is:
- Reduce the pollution: transport officials in Beijing want to reach 18% of commuters riding to work by 2020.
What is their plan in the future?
A long term vision of the Marketing Director of Ofo is to export their bikes to other countries and cities such as London, Singapore and Los Angeles. And of course be the major player in their own country.
What is your next move?
If you are a two wheeler enthusiast like us and would also like to get a piece of the clean transportation action, you know what to do! Just choose the supplier that you prefer. Either because you like the color, it is cheaper or you like these or those characteristics… Then it will be your choice and we are glad that we helped you to make the step to use a cleaner transportation. But do not forget to watch your surroundings it is not because you have chosen the bike that you will have a special treatment on the road! Moreover, if you have any question about it do not hesitate to contact us.