In such a red Sea market, Ofo has survived the most intense war of burning money and the bike-sharing bubble economy, and has become the first tier of bike-sharing enterprises together with Mobike. As their business models mature, Ofo and Mobike have become the most profitable companies in the market.
Ofo’s desire to harvest the market failed after the sharing economy receded
On April 3, 2018, a news spread that Meituan had acquired Mobike for $3.7 billion. As a member of the same echelon as Ofo, Mobike has experienced the same experience as Ofo in the sharing economy market. However, it has become a “puppet” of Tencent capital in the field of transportation at a time when the dawn seems to be coming. Mobike has become another sharing economy laughingstock following the debt-for-equity deal between Ofo and Alibaba Capital.
The acquisition of Mobike by Meituan would have given Ofo a new opportunity in bike-sharing, but its bikes have become the target of much grief.
Mobike, which focuses on product research and development, has invested a lot of energy and capital to create high-quality shared bikes in the early stage, which has reduced the maintenance cost of shared bikes in the later market. At the same time, mobike with lower attrition rate can save more market resources for Mobike and put the saved market resources into future market operation. Meituan’s acquisition of Mobike will enable Mobike to add takeout, travel and hotels and other application scenarios closely related to consumers’ lives in the future bike-sharing market. Mobike has a large traffic platform like Meituan as the basis for its expansion, and the business scenario created by “travel + takeout + hotel” has become a serious threat to Ofo in the market.
Ofo and Mobike have become the first echelon enterprises in the bike-sharing field despite having survived the money-burning war and the bubble economy of bike-sharing in the early stage. However, many problems of Ofo in the bike-sharing field have made it unpopular among many “fans” of the sharing economy.
Internal cause: serious cycle wear and poor experience are criticized
Before opening up new market opportunities, word of mouth among users has become an important factor hindering the development of Ofo bikes in the bike-sharing sector. Among the two enterprises in the first tier, Mobike focuses on product research and development and reduces the maintenance energy of products in the later stage by releasing high-quality bikes. Ofo focuses on marketing. In the past, in the field of shared bikes, it tried to open the user market by mass-producing cheap bikes, and began to meet the needs of different users with various models such as muscle yellow bikes, princess cars and minions, and opened the market through various marketing modes such as celebrity endorsement. These marketing models have helped the number of ofo users rise to 200 million, but in the process of marketing, consumers prefer mobikes with better riding experience and appearance when there is a strong demand for shared bikes.
External cause: the momentum of the full second echelon of the market threat
After Ofo and Mobike ended the war of burning cash first, Ofo is facing competition not only from Mobike in the same tier, but also from bike-sharing companies in the second tier. With the support of Alipay, Harrow Bike has launched a national credit dest-free ride with a wider range of dest-free rides than Ofo. With the heavy capital support of Ali, harrow Bike has entered the market from the third and fourth tier cities. At present, the momentum of the market is directed at the two enterprises in the first tier. With the help of The Didi platform, The Little Blue Car has bypassed the gate of death and returned to the track of the second tier of shared bikes. On one side, Ubike returned to the market through the combination of “blockchain + sharing economy”, trying to subvert the bike-sharing industry…
After experiencing white-hot competition, the operation mode of shared bikes has become a market with highly transparent product information and operation mode. In such a market environment, it is not impossible for capital giants to revitalize the bike-sharing enterprises with lower user reputation and body loss, so that the viable enterprises can avoid detdettions and quickly overtake or even replace ofo’s small bicycles with internal troubles and external problems, thus harvesting the bike-sharing market.
Can the “Golden Globe” blockchain help Ofo out of its revenue dilemma?
In October 2017, Ofo announced that it would enter the profit period ahead of schedule, but in January 2018, it was exposed to a financial crisis in its account. Although Ofo once denied the funding crisis, the recent financing form of “car loan” with Alibaba seems to confirm that Ofo is facing revenue difficulties and capital shortage in the bike-sharing sector. The news of Meituan’s acquisition of Mobike made Ofo founder Dai Wei, who did not want to be a puppet of the giant capital, feel a strong sense of crisis.
Regarding ofo’s existing difficulties, Kuaidi Founder Chen Weixing said, “Ofo’s biggest opportunity is how to blockchain.” It added that Dai had communicated with him several times about how Ofo was going blockchain-based. In the first year of blockchain, can blockchain really help Ofo out?
From the perspective of blockchain technology, blockchain has three characteristics of information immutable, open and decentralized, which can help Ofo solve the problem of industrial innovation and upgrade ofo’s service mode.
First of all, the untampering of information can solve the problem of credit and deposit in the bike-sharing industry. By introducing blockchain into the market operation mode of OFO yellow bikes, the record feature of blockchain can solve the problem of trust mechanism between OFo and users. In other words, the record feature of blockchain can replace the deposit and increase the attraction of OFo to users. At the same time, block chain can be used to establish a credit line for users to use bikes. For users, with blockchain acting as a “guarantor”, there is no need to pay the deposit, and there is no need to worry about the whereabouts of the deposit.
Secondly, the openness of blockchain can facilitate ofo’s global launch strategy. Dai’s vision for blockchainization of Ofo does not say ICO, but how blockchain and tokens can be used to design a new market relationship between Ofo and its users. The introduction of token technology can help Ofo solve the problem of currency conversion among users in different countries, greatly simplifying the settlement efficiency of users after cycling. At the same time, using the data recording function of blockchain, the data can be shared with other sharing economy fields, and the tokens generated by ofo yellow bikes can be applied in multiple scenarios.
Finally, decentralization would allow Ofo bikes to be truly shared. Currently, bike-sharing platforms in the market are obviously centralized organizations. However, the application of blockchain technology in the bike-sharing field can directly connect users with bike suppliers, which can effectively reduce the maintenance and market operation costs of ofo bikes. At the same time, the node consensus mechanism of blockchain can also solve the problem of serious wastage of yellow bikes, and bring users better quality and experience of shared bikes.
Ofo has fallen into a financial “crisis” during the harvest due to bike experience and market operation problems. However, blockchain technology can solve the maintenance problems of ofo bikes through consensus mechanism, allowing it to devote more time and energy to market operation. At the same time, blockchain technology can help Ofo solve the problems of body quality, user experience and funding shortage, making yellow bikes a true shared bike.
How can Blockchain-based Ofo escape the fate of “giant”?
After Didi, Ofo’s largest shareholder, agreed to a debt-for-equity swap of ofo’s bikes with Ali-secured loans, Alibaba became the largest shareholder of Ofo. At this point, the first and second echelons of enterprises in the field of shared bikes have all taken sides, which also confirms the “Founders of shared bikes becoming puppets of capitalists” published by Liu Kuang (wechat ID: Liukuang110) in 2017. The point of the article.
But in ofo: and ali debt convertible issues, it is thought that ofo: founder Dai Wei will yellow car mortgaged to ali is in order to get rid of the control of drops of capital, and official ofo: no data show that ali department occupies ofo: how many shares, yellow car Dai Wei will in the future market weakening ali system control, gradually let ofo: on the road to independence.
But in the current market, Mobike and Ofo have left Didi, making the competition between Alibaba and Tencent in the bike-sharing market. In terms of competition, Mobike in the first tier is fully controlled by Tencent, while Alibaba only holds part of ofo’s shares. Therefore, in the future market, In order to compete with Tencent in the field of bicycle travel, Alibaba will increase its holding capacity in Ofo.
Under such market trend, in order to get rid of the “puppet” fate and prevent Ofo from being giant, the founders of Ofo need to have absolute originality advantage in the bike-sharing field, so as to control the discourse power of future negotiations between Ofo and Alibaba. However, after the acquisition of Mobike, the business adjustment between Meituan and Mobike is not clear, which is a rare opportunity for Ofo. Yellow Bike should seize the opportunity to take advantage of the trend and increase its market competitiveness through innovation.
On the one hand, seek the output of blockchain technology and accelerate the layout of blockchain. Blockchain can not only help Ofo enhance the trust mechanism between users and improve its operation and management capabilities in the bike-sharing market, but also help ofo timely recycle and upgrade bikes and reduce user experience problems caused by product quality between Ofo and competitors. Therefore, during the business adjustment of Mobike, Ofo should look for more influential blockchain technology enterprises and quickly lay out the operation ecology of yellow bikes in the sharing market through blockchain, so as to solve the contradiction between Ofo and users.
On the other hand, cooperation with b-end merchants is reached to realize the scenario of cycling income. In terms of cycling income, Ofo bicycles have formed a cooperative mode with Alipay’s Ant Forest to obtain energy by cycling. However, in the competitive market of obtaining energy by cycling from Ant Forest, Harlow bicycle’s entry into the market has divided Ofo’s market share on Alipay, and the development space of bicycles has been compressed. On the other hand, Ofo can find a new way to find b-end merchants and reach cooperation with them. According to users’ cycling distance and location, it can recommend nearby merchants with preferential prices for users to promote their consumption at merchants. In this way, it can not only save operation and promotion costs for itself, but also help merchants attract customers, increase merchants’ income and form a cooperative mode of sharing and symbiosis.
Generally speaking, after the tide of sharing economy recedes, most shared bikes survive with the support of giants, but what capital values is whether shared bike companies can create value in the market after the tide goes out. In order to get rid of the total control of alibaba and Tencent and realize free operation in the future development, the founders of Ofo need to focus on user experience and interests, constantly innovate to increase their competitiveness in the market, attract more capital to enter, and solve the crisis of “magnification” through capital competition.
Article/Liu Kuang public account, ID: Liukuang110