Bike-sharers apply the brakes


When we profiled Mobike in September 2016 WiC was one of the first English-language media to focus on Chinese bike-sharing apps (see WiC339). We were soon writing about its main rival Ofo too and the struggle between them to win market share, first in cities across China and later in urban areas across the globe.

However, the breakneck pace of their battle soon had municipal authorities in China irate, with fleets of orange Mobikes and yellow Ofos piling up on the streets, disrupting traffic and becoming an unsightly public nuisance. Several cities ordered a freeze on new bikes.

New data now shows how Alibaba-owned Ofo has been impacted by the regulatory crackdown. According to the South China Morning Post, Ofo had signed a deal with Shanghai Phoenix Bicycles last May to buy 5 million bikes in the year ahead. However, the bikemaker announced in a stock exchange filing that Ofo had purchased just 1.86 million bikes for Rmb637 million ($100 million) over that 12-month period.

It is thought that the number of app-controlled rental bikes in China peaked at 16 million in September last year. Ofo’s founder Dai Wei has said the company is now “transitioning from a phase of rapid growth to a stage of high-quality development,” reports the SCMP.

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.