Will Mobike and Ofo Ride Off Into the Next Mega Merger?

[TaiShang]

Dec 18, 2017 07:03 AM

Will Mobike and Ofo Ride Off Into the Next Mega Merger?
By Qu Yunxu, Zhou Qijun and Han Wei

China’s bike-sharing market grew to 3.9 billion yuan in the second quarter of 2017, with more than 100 million riders, according to iResearch. Above: riders pedal near Tiananmen Square in Beijing. Photo: Kevin Frayer/Getty Images

The fast-pedaling bike-sharing industry in China could be headed for a mega merger, the likes of which hasn’t been seen since the cutthroat price war among car-hailing companies two years ago that created one sector behemoth, Didi Chuxing.

China’s top bike-sharing companies Mobike and Ofo have battled for nearly two years, burning through billions of dollars and forcing into the ditch smaller players who simply couldn’t compete in new fundraising and deep discounts for riders. Now Mobike and Ofo are at a fork in the bike-sharing road: Do they hop on a tandem business model – accepting one company must ride in the front – or continue what has become a two-company race?

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https://www.caixinglobal.com/2017-1...-off-into-the-next-mega-merger-101186216.html

 

[AndrewJin]

Lots of players—two competitors-merging
Another giant monopoly in the making

 

[TaiShang]

Lots of players—two competitors-merging
Another giant monopoly in the making

I think it would be nice. Small players would still maintain their local markets while the new giant would spearhead technology and compete in the overseas markets.

 

[cirr]

Chinese bike-sharing firm faces lawsuit over deposit refunds

2017-12-19 08:34 Xinhua Editor: Gu Liping

Xiaoming Bike, a bike-sharing firm based in south China's Guangdong Province, faces a lawsuit after users have had difficulties in receiving deposit refunds.

The Guangdong Provincial Consumers' Association Monday said it has lodged a civil public welfare lawsuit against the firm's operator, Guangzhou Yueqi Information Technology Co., for its failure to pay deposit refunds and having no third-party supervision over its bank account for the deposits.

The agency said the Guangzhou Municipal Intermediate People's Court has accepted the case.

Since August, the association has received more than 30,000 consumer complaints over deposit refund issues.

The bike-sharing startup has failed to address the complaints in a timely fashion since mid November, the association said.

The association said it hoped the lawsuit will help promote the healthy development of the bike-sharing industry.

Many shared bike users in China have fallen victim to defaults on their deposit refunds, after two operators, Coolqi and Bluegogo, went bankrupt.

China's bike sharing market is expected to rake in 10.3 billion yuan (1.5 billion U.S. dollars) in revenue this year, a 736-percent increase from 1.2 billion yuan in 2016, according to a report from iiMedia Research.

It estimated the number of shared-bike users in China will hit 209 million this year, compared with 28 million last year.

A report issued by the China Internet Network Information Center in August estimated that users may have paid 10 billion yuan in deposits to use shared bikes.

The public has called on regulators to set rules on an unified process and time limit for users to get deposit refunds, and require firms to keep independent bank accounts to ensure they can afford to refund users.

http://www.ecns.cn/business/2017/12-19/284950.shtml

 

[Bussard Ramjet]

Lots of players—two competitors-merging
Another giant monopoly in the making

Yeah, but these players may not be profitable without a merger.

Though I take your point, that China should guard against large monopolies that can decide fate of innovation. Large businesses often kill innovation that competes with their products.

It is not a problem right now, because Alibaba and Tencent are very innovative, perhaps a problem to look at a decade from now.

 

[TaiShang]

Chinese bike-sharing firm faces lawsuit over deposit refunds

2017-12-19 08:34 Xinhua Editor: Gu Liping

Xiaoming Bike, a bike-sharing firm based in south China's Guangdong Province, faces a lawsuit after users have had difficulties in receiving deposit refunds.

The Guangdong Provincial Consumers' Association Monday said it has lodged a civil public welfare lawsuit against the firm's operator, Guangzhou Yueqi Information Technology Co., for its failure to pay deposit refunds and having no third-party supervision over its bank account for the deposits.

The agency said the Guangzhou Municipal Intermediate People's Court has accepted the case.

Since August, the association has received more than 30,000 consumer complaints over deposit refund issues.

The bike-sharing startup has failed to address the complaints in a timely fashion since mid November, the association said.

The association said it hoped the lawsuit will help promote the healthy development of the bike-sharing industry.

Many shared bike users in China have fallen victim to defaults on their deposit refunds, after two operators, Coolqi and Bluegogo, went bankrupt.

China's bike sharing market is expected to rake in 10.3 billion yuan (1.5 billion U.S. dollars) in revenue this year, a 736-percent increase from 1.2 billion yuan in 2016, according to a report from iiMedia Research.

It estimated the number of shared-bike users in China will hit 209 million this year, compared with 28 million last year.

A report issued by the China Internet Network Information Center in August estimated that users may have paid 10 billion yuan in deposits to use shared bikes.

The public has called on regulators to set rules on an unified process and time limit for users to get deposit refunds, and require firms to keep independent bank accounts to ensure they can afford to refund users.

http://www.ecns.cn/business/2017/12-19/284950.shtml

The industry needs consolidation. Now there are too many players now. Maybe it is good for customer and innovation but it also makes regulation more difficult.

It is a stage the industry needs to go through.

 

[AndrewJin]

The industry needs consolidation. Now there are too many players now. Maybe it is good for customer and innovation but it also makes regulation more difficult.

It is a stage the industry needs to go through.

I like mobike...their bikes look cooler

 

[TaiShang]

I like mobike...their bikes look cooler

Someone told me that each mobike costs about 3000Yuan whereas each Ofo costs about 300Yuan. I am not sure the difference is so big, but one can easily tell the quality of Mobike. I have ridden Ofo several times in the Mainland but no chance yet to ride Mobike.

I think the two business models complement each other.

 

[sinait]

Someone told me that each mobike costs about 3000Yuan whereas each Ofo costs about 3000Yuan. I am not sure the difference is so big, but one can easily tell the quality of Mobike. I have ridden Ofo several times in the Mainland but no chance yet to ride Mobike.

I think the two business models complement each other.

3000yuan is around sgd$600.
That's more than the price of my branded much lighter all alloy 21 speed hardtail bike with superior ride comfort and speed.
I don't think it cost that much.
.

 

[TaiShang]

3000yuan is around sgd$600.
That's more than the price of my branded much lighter all alloy 21 speed hardtail bike with superior ride comfort and speed.
I don't think it cost that much.
.

Indeed, most likely, I am mistaken.

But their bikes are really well-built. By the way, I made a typo, the cost of Ofo is 300Yuan (not 3000元), others say it is actually 200Yuan.

I know that in Taipei City, each UBike (built by Giant) costs 5000NT (which is about 1000RMB). Mobike should not cost more than that.

 

[sinait]

Indeed, most likely, I am mistaken.

But their bikes are really well-built. By the way, I made a typo, the cost of Ofo is 300Yuan (not 3000元), others say it is actually 200Yuan.

I know that in Taipei City, each UBike (built by Giant) costs 5000NT (which is about 1000RMB). Mobike should not cost more than that.

I agree the bikes are well built to take all that misuse.
The ride is real hard on tubeless skinny tires, and those springs under the seat are just spring looking solid plastics.
My area is hilly and the 3 gears change that come with some bikes are inadequate.

That aside, the bike sharing service is a boon for last mile travel especially when there is no time to waste even for a short walk.
I always had this fear of having my bike stolen or cannibalised although the possibility is minimal now with electric bikes and now this bike sharing service.
Lets hope it will be successful and here to stay.
.

 

[TaiShang]

I agree the bikes are well built to take all that misuse.
The ride is real hard on tubeless skinny tires, and those springs under the seat are just spring looking solid plastics.
My area is hilly and the 3 gears change that come with some bikes are inadequate.

Yes, UBike also comes with three (rear) gears and disk brakes. The tires are not solid.

But Ofo comes with solid tires (at least the ones I tried back in fall in a Mainland campus). And it does not have gear.

This picture I took this fall in the Mainland. They made the bikes look cute

That aside, the bike sharing service is a boon for last mile travel especially when there is no time to waste even for a short walk.
I always had this fear of having my bike stolen or cannibalised although the possibility is minimal now with electric bikes and now this bike sharing service.
Lets hope it will be successful and here to stay.

I also still prefer to have my own, but, sometimes the shared bikes are just too convenient to ignore.

 

[sinait]

Yes, UBike also comes with three (rear) gears and disk brakes. The tires are not solid.

But Ofo comes with solid tires (at least the ones I tried back in fall in a Mainland campus). And it does not have gear.

This picture I took this fall in the Mainland. They made the bikes look cute

View attachment 443896

I also still prefer to have my own, but, sometimes the shared bikes are just too convenient to ignore.

That looks like a good place for me to race down the road.
Singapore not the best place to ride bikes except for short distances, but its getting better.
So far I only see Mobike have the 3 geared bikes.
I think it's a planetary geared drive, so not cheap.

Ya, our bike is the best, we are so used to it, and these shared bikes are real heavy.
.

 

[GS Zhou]

That looks like a good place for me to race down the road.
Singapore not the best place to ride bikes except for short distances, but its getting better.
So far I only see Mobike have the 3 geared bikes.
I think it's a planetary geared drive, so not cheap.

Ya, our bike is the best, we are so used to it, and these shared bikes are real heavy.
.

shared bicycle is mainly used for short distance ride, e.g. within 1~2 km. The most common user case in China (at least in my city Shanghai) is
on the morning: ride the Mobike/Ofo home to metro station; and then metro station to working site.
on the afternoon: ride the bicycle working site to metro station; and then metro station to home

Shanghai, or other key cities like Beijing, Shenzhen, is built upon a plain area, so geared bicycle is not necessary.

 

[AndrewJin]

Indeed, most likely, I am mistaken.

But their bikes are really well-built. By the way, I made a typo, the cost of Ofo is 300Yuan (not 3000元), others say it is actually 200Yuan.

I know that in Taipei City, each UBike (built by Giant) costs 5000NT (which is about 1000RMB). Mobike should not cost more than that.

Standard Mobike costs 2000-3000yuan, you are not mistaken.
Lite version costs just several hundred yuan.