Gobee.bike, Hong Kong’s first bike-sharing company, announced on July 10 that it will end its business in the city, Hong Kong wenhui reported. Gobee.bike, which has yet to turn a profit after more than a year in business, admitted it was “unable to sustain the huge maintenance costs”, but said users would be able to refund their deposits in full and the company would properly handle all applications.
Compared with the failure of the bike brand founder ran away, deposit difficult to refund the meme, Gobee.bike has been a decent exit. Because of the deposit, bike-sharing companies have been unable to get around a high wall.
According to the China Internet Network Information Center, deposits for shared bikes in China totaled 20 billion to 60 billion yuan by the end of 2017. With the withdrawal of several bike-sharing companies, users will lose more than 1 billion yuan in deposits. Over the past two years, many bike-sharing enterprises have been Mired in the dilemma of deposit refund. And the survivors in the market, with ofo, Mobike and other head platform free, also gradually toward the general trend of free.
Following mobike’s doorsilless-free ride in 100 cities in June, mobike announced on July 5 that it will launch a doorsilless-free deposit-free ride across China, where more than 200 million users will be able to enjoy a deposit-free ride, and called on the whole industry to participate. Ofo’s path to waiver has been more tortuous. Ofo previously launched sesame Credit’s deposit-free program in 25 cities across China. In May this year, Ofo reduced the number of cities to five, including Shanghai, Hangzhou, Guangzhou, Shenzhen and Xiamen. And announced the launch of a new generation of credit points system, can be evaluated and graded through user behavior, credit users are expected to reduce the deposit.
In addition, Harrow Bike is the first enterprise to launch nationwide credit free service. Users with more than 650 sesame points can ride Harrow bikes without deposit in 180 cities across The country. Yang Lei, CEO of Harrow Bike, said the strategy is expected to reach 160 million cycling users by the end of this year, with a total deposit exemption of more than 30 billion yuan.
The voice of free betting is very high, but the declining trend of shared bikes has been unstoppable
Early this year, though, the top three bike-sharing companies still showed signs of “recovery” after the cold winter. In March, Ofo announced the completion of an $866 million round of E2-1 financing. In April, Harrow Completed E1 round of financing, with ant Financial and Fosun as the main investors, and the financing amount was close to $700 million. In April, Mobike reached a deal to acquire Meituan for $3.7 billion with an actual valuation of $2.7 billion and $1 billion in debt. However, compared with last year, when a small movement in the bike-sharing sector could have triggered a hot discussion, mobike’s news has not caused much stir in the industry. This may be because bike-sharing has entered a period of weak development and the dividends of the industry have been consumed.
In terms of monthly active users, Ofo, Mobike and Harrow occupied the top three spots in the bike-sharing industry with 28.051 million, 20.8563 million and 7.618,500 million, respectively, according to the China Bike-sharing Market Report in May 2018 released by Analysys Consulting. In addition to the struggles of Ofo, Mobike and Harrow, new entrants are still entering the bike-sharing arena. However, the industry pattern has been difficult to change, the future of the bike how to go on is a lot of people worry about the problem. Nowadays, the industry competition has shifted from the initial movement of burning money and enclosure to exploring sustainable profit model.
But it is clear that in the eyes of public users, the failure of bike-sharing has already begun. From last year, a number of small and medium-sized platforms closed down, ran away, deposit is difficult to return, and then the emergence of shared bike graveyard, and this year, all kinds of chaos is still not solved, and even damaged bikes, roadside accumulation of all kinds of resource waste phenomenon intensified… In short, we do not yet see a mature and healthy functioning model.
The winter of 2017 is a real winter for bike-sharing companies. The drop in temperature led to a sharp drop in the frequency of bike trips, making it the toughest winter for bike sharing. In addition to physical attacks, the bike-sharing industry is also suffering from chemical attacks of varying degrees.
On the one hand, capital remains warm, but it is not far from cooling completely. This year, along with the sharing economy, there is also the block chain, and from the short life cycle of the block chain, we can see the development trajectory of shared bikes. In 2018, bike-sharing companies have begun to draw to a close, and a large round of financing is more like an orgy of doom, but also a desperate bet. In terms of the education level of the market, bike-sharing has achieved success in a sense, but in terms of the stickiness of more users, it is still a very fragile industry.
Not only is the cycling rate affected by factors such as the weather, but with the increasing intensity and depth of regulation, it is not easy for users to use their cars anytime and anywhere.
On the other hand, a batch of shared bikes launched in the early stage have become old, and the cost of repair and maintenance has greatly increased. Old bikes are an inevitable trend, and the only solution is to continuously invest in new cars and strengthen the effect of reform. In this case, more late-entry bike brands will gain an advantage due to newer vehicles. For example, Ofo recently suffered from a large number of damaged vehicles, and its user experience continued to decline. Mobike’s bikes boast high quality, but they have also been criticised for being bulky and difficult to ride.
Another detail is that Ofo’s yellow and Mobike’s orange bikes are warm colors, while from top to bottom the newer Harrow bikes and the new Green Orange are cool colors. Over time, the cool color bikes have the advantage of being fresher and more popular. As can be seen from the gender ratio of shared bikes, Harrow has a higher percentage of female users than Ofo and Mobike.
The plot is complicated by the battle over giant payouts
Shared bikes have a remarkable effect on solving the “last kilometer” of urban life, greatly facilitating people’s lives. But from a corporate perspective, it seems impossible to meet the huge profit demands of both the market and the enterprise. Capital is the survival medicine of a single enterprise, and the payment war of giants is the key to the survival of the entire bike-sharing industry.
With the entry of Alibaba and Tencent, deep pockets are a sign of their viability, while both companies are trying to use their investments and acquisitions to funnel the huge user base of bike-sharing into their ecosystems. The mobile payment wars are already rattling the bike-sharing industry.
For the giants, bike-sharing has three scarce resources. One is massive user travel data. Travel can be said to be the lifeblood of half of new retail. As an online and offline retail form, new retail is an important branch of urban life service and the main destination of citizens’ “last mile” of travel. Cycling data is even as important as data from ride-hailing companies such as Didi, where retailers or small vendors can rely on cycling to provide timed services at crowded spots. Retail is also a battleground for Alibaba and Tencent. Therefore, mastering users’ travel data is crucial for the competition of the retail market, and also indirectly affects the mobile payment market.
The second is the supplement of user credit data. Whether It is Harrow Bike’s choice of Sesame Credit as a no-charge voucher or Ofo’s intention to establish an independent credit system, it demonstrates the importance of credit data. With the real name system of Internet users and all kinds of users’ online operation, the construction and improvement of China’s credit investigation system is imminent. The establishment of credit society is also promoted by all kinds of Internet enterprises. At this stage, whoever has more comprehensive and abundant credit data can have a solid foundation stone.
The third is the portrait of user consumption habits. The development of shared bikes tests the payment, risk management and mobile platform technologies of online platforms. The travel consumption data can reflect the consumption habits of users, benefiting from the data set of travel routes and destinations, but also inseparable from the participation of AI, big data and other Innovative Internet technologies. Based on a series of intelligent data algorithms, the user consumption profile will become more accurate, indirectly promoting the development of new retail and payment markets.
Ultimately, the success of China’s O2O business world, whether bike-sharing or anything else, will depend on scale, said Sundeep Gantori, an analyst at UBS Global Wealth Management. “The two main barriers to becoming a successful O2O player in China are access to large amounts of data and the deep pockets to continue to invest. In this regard, we believe the larger players have a unique advantage and consolidation will continue to increase.”
Therefore, no matter from which Angle, the participation of giants will bring a huge shock to the bike-sharing industry, and the industry competition will rise to a new latitude. On the one hand, bike-sharing enterprises rely on the competition of giants to survive, on the other hand, they can only become chips in the competition of giants.
Besides payment, the giant also values the data of shared bikes
At this stage, bike-sharing has entered the stage of profit model exploration. It is inevitable to reduce costs and reduce expenses under the refined operation mode. For example, Ofo recently announced the progress of cost reduction and efficiency improvement, saying that the operating cost of a single yellow bike has been reduced by 80%, and the comprehensive operating cost of each yellow bike has been reduced from 1.5 yuan per day in 2017 to 0.2 yuan per day.
Or venture into new areas and develop new businesses to make breakthroughs. For example, Didi launched its own shared bikes, cross-border cooperation between shared bikes and shared cars, and Meituan acquired Mobike to combine O2O urban life services with “last mile” bike travel demands… The crossover of many Internet companies has given the bike-sharing industry more opportunities.
For the whole industry, shared bikes can carry greater value. At present, the policy and regulation system of shared bikes still needs to be improved. Facing the market that has been educated and mature, and the user group that has formed the habit of traveling and riding bikes, shared bikes are coming to an important period of regroup and adjustment.
In addition to the direct realization of cycling cards and other hardware products and services sold, the data value of bicycles has greater potential to be tapped. As a new form of business under the spotlight, shared bikes should also shoulder certain social responsibilities. Every disorderly image is the consumption of brand reputation, dry ze and fishing, to the short-term value of maximum reclamation will only outweighed the loss.
In general, entering the second half of bicycle competition, the market pattern tends to be stable, and the giant’s entry into the situation will break the calm lake, to bring new vibration to the industry. It is certain that all bike brands are bound to be risk-free, wear and tear costs will continue to be compressed to a stable value, and shared bikes will officially enter the profit stage.
Article/Liu Kuang public account, ID: Liukuang110