Bike Sharing in China: Will the Impending War between ofo and Mobike Help the Rest of the World Rethink Bike Sharing?
Two months after Didi Chuxing finalized the deal to acquire Uber’s business in China and reinforcing its leading position in China’s ride-sharing market, the company diversifies its portfolio by investing in ofo, a bike sharing startup that has launched its service in 20 cities in China.
Although China had a “bike culture” in the past decades, with the majority of the vast working class people using bikes as their primary way to commute in the last century, Chinese people now prefer alternatives such as motorcycles and electric bikes for their efficiency. Severe air pollutions certainly does not help maintaining the bike lovers from choosing healthier ways to commute or exercise. In some cities, governments determine that motorcycles and electric bikes worsen the already chaotic traffic and forbid them from entering the inner city. Bikes are mostly allowed, but bike riders often find their safety threatened by cars that violate their right of way.
Despite the unfavorable conditions for biking in cities, ofo (it’s not a typo because most bikes has two wheels in the same size), a company by Peking founded University Alums, saw the niche market in college campuses. Over the past two years, the company accumulated a large amount of users in some of the major universities, and began its expansion into the broader cities.
Bike sharing is not a new concept in China. According to a 2011 article by ACCESS Magazine, “Hangzhou has the largest bikesharing program in the world”. The service that the Hangzhou Public Bicycle system provides is similar to the ones that we see and use in the U.S.: stationary bike dock and locking facilities and pay stations in various designated locations across the urban area. Few cities followed Hangzhou’s path in providing low-cost public bike sharing services to residents and tourists.
ofo employs a more flexible way in bike sharing. Users only have to unlock the bikes on their smart phones, and, when they finish the ride, stop the bike in the bike parking area. With the popularity of smartphones and mobile payment in China, the service that require much less application procedures was soon adapted by many college students.
ofo is not alone in China’s bike sharing market. Mobike, a ride sharing service provider that also owns a production line in East China, is poised to facing the upcoming competition. Mobike requires less maintenance. The bike itself is designed and produced as a unit, and its solid tires does not need refilling. However, some users are complaining that Mobike is so heavy that they feel more tired than walking for the same distance when riding Mobike.
Mobike is backed by several active Chinese venture capitals, as well as China’s tech giant Tencent, a company that developed WeChat, the most popular instant message app in China. Tencent certainly hopes that Mobike could bring more leverage in its war in mobile payment against Alibaba’s Alipay.
It looks like a war is inevitable between these two companies. ofo started early and already proved its ability in acquiring users from the young generations. Mobike has launched in Beijing and Shanghai, and is rumored to be entering Guangzhou, China’s third largest city. ofo could be incorporated in Didi’s app, which would allow hundreds of millions of users to get to know ofo’s service when using the ridesharing app.
With both sides raising funds rapidly, I don’t worry about not getting their ads on my internet browser or push notifications on my Chinese social media accounts. I wouldn’t be surprised if the public see their advertisements on the national television.
I certainly look forward to something other than another Uber-Lyft type of market competition in China’s bike sharing landscape.
Despite the sharp decline in bicycle consumptions, China is still a major bike manufacturer and exporter. As mentioned before, Mobike has its own factory, and it would not be hard for ofo to purchase if they think it is necessary. They have the money and facility to experiment innovations and improvements in bike sharing, and lots of users to test the new ideas. How about incorporating a workout summary by the end of every trip like we see in those exercise bikes we see in the gym?
At least they have already got rid of the dock and pay stations.
