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​Bike-sharing battle accelerates

Xinhua Financein www.cfbond.com
2018-06-06 10:26

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The battle for China's cutthroat bike-sharing industry is escalating, with major internet titans becoming strategic investors and investing billions in the emerging sector.

After the recent years of rapid growth, the bike-sharing sector in China is now embracing a new era of stable growth, requiring players to shift their focus from rapid market expansion to refined management and operation, said industry experts.

Zhao Xiang, an analyst at Beijing-based internet consultancy Analysys, said the competition will intensify as the two tech giants behind major bike-rental firms, Alibaba Group Holding Ltd and Tencent Holdings Ltd, seek larger market share in the industry.

"China's bike-sharing industry now enters a new stage of integration. Bikerental firms need to expand their business in an orderly way, improve the way of operating bikes and increase their profitability," said Raymond Wang, a partner at Roland Berger China.

Ant Financial, Alibaba's financial unit, has invested 2.06 billion yuan ($321 million) in second-tier bike-rental player Hellobike, giving the latter a unicorn valuation of $1.47 billion.

The new investment will make Shanghai Yunxin Venture Capital Co, a subsidiary of Ant Financial, the biggest shareholder with a 36.7 percent stake in Youon Low Carbon Technology Co Ltd, the company behind the Hellobike brand, according to its official statement.

The move came after Tencent-backed on-demand online services provider Meituan-Dianping announced in April it had gained full control of leading Chinese bike rental firm Beijing Mobike Technology Co Ltd.

Statistics from App tracker Analysys Qianfan shows Hellobike ranked a distant third in terms of active user numbers, attaining more than 6 million monthly active users in April this year. Mobike and its arch rival Ofo Inc took the second place and the top spot on the list, respectively, both reporting tens of millions of monthly active users in April.

Zhao Xiang said while Ofo and Mobike have a better presence in the large cities, Ant Finanical-backed Hellobike will focus on second and third-tier cities.

Unlike Mobike and Hellobike, which have gained strong support from internet giants, Ofo has reportedly got itself into trouble.

Chinese business news platform Huxiu.com reported on Monday that Ofo is laying off around half of its employees. Huxiu also said Ofo's overseas department had been disbanded, with three high-level executives leaving the firm. Ofo's co-founder Yu Xin responded on his WeChat account that the information was untrue.
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