Growing demand drives investor sentiment

Updated 2016-10-26 10:52:34 China Daily

Mobike is just one of a number of private companies focusing on public bike-sharing platforms in China.

It's major competitor is OFO, which mainly concentrates on university campuses. OFO claims to cover 200 colleges and universities in 20 cities nationwide. Accumulated orders have surpassed 10 million, with daily user numbers of more than 7,000.

In October, OFO expanded outside of campuses and started putting its bikes in public spaces.

Similar programs, owned by private companies such as Ubike and Ming, have also entered the market, or have announced that they will enter it soon.

The rising demand has attracted interest from private investors.

On Oct 13, Mobike confirmed that it had received funding from venture capitalists at home and abroad, including Hillhouse Capital Group, Warburg Pincus, Tencent and Sequoia Capital. The company declined to reveal how much it received through VC channels, but industry insiders said the sum was approximately 0 million.

OFO has also announced a new round of financing, valued at 0 million. The lead investors include Coatue Management, the electronics manufacturer Xiaomi, Matrix Partners China and the cab-hailing company Didi Chuxing.

Even new arrivals Ubike and Ming recently received investment, with Ming attracting 100 million yuan (.7 million).

"From the investment perspective, no apps are more frequently used than those related to transportation," said Xiao Min, a partner at Matrix, which invested in OFO because it has an on-campus presence and its bikes are cheaper to use than Mobike's.

Xiao said that once the original companies have gained market share, there will be little profit left for latecomers.

Raymond Wang, a partner at international business consultancy Roland Berger, said some companies will fail.

"Public bike-sharing has long existed in China, but this upgraded product has excited investors. Mobike has sparked a carnival this time round, and its free-floating base and transaction services have improved the user experience," he said.

The development of information technology also supports the birth of new products, according to Wang: "Investors have high expectations of the on-demand economy, and the public bike-sharing sector happens to have had a few breakthroughs. Just as investors rushed to pour money into car-hailing business, they are now rushing into public bike-sharing companies."

He believes opportunities exist for players to improve their products and the user experience.

"Innovation drives possibilities. Uncertainties about products and the market mean competition will be fierce within two years. That's because a growing number of people will realize that they have a new choice when they want to go out, and heightened awareness will increase the size of the market," he said.

"However, once the market is saturated, what happened in the car-hailing sector may happen again and end the battle."

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58June 24 2018 02:01:05

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16June 24 2018 02:01:05

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18June 24 2018 02:01:05

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

Most Watched

China World Business Sports Showbiz Audio
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
China World Fun Travel Entertainment Sports
Beijing Shanghai Guangzhou
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords