Beijing-based bike-sharing start-up 3Vbike announced that it had halted operations as of June 21 after losing thousands of bikes in some cities, media reports said Monday. It was the second company to leave the sector after Wukong Bike, which closed on June 13.
There is now only one function in 3Vbike's WeChat official account, which tells users to claim their deposits as soon as possible. There are 11,000 registered users on its platform, Wu Shenghua, the founder of the start-up, was quoted as saying in the Legal Mirror.
So far, 95 percent of deposits have been returned to customers, Wu said.
In the statement announcing its closure, 3Vbike said that the main cause is that most of the bikes had been stolen.
"Without results in the first round of fundraising, I purchased 1,000 bikes on my own. Now, there are only tens of bikes left. In some areas, we have none left. We can't survive like this," Wu said on Monday.
With investment from Huayaodi Technology, 3Vbike targeted third-tier cities. It tried its luck in Baoding, Langfang and Qinhuangdao in North China's Hebei Province as well as Putian, South China's Fujian Province.
It took Wukong Bike five months to fail, while 3Vbike operated for just four months.
There are many bike-sharing companies in China and it has been obvious all along that tough competition is inevitable.
Major players include Mobike, with 57 percent of the market in the first quarter of 2017, followed by its rivals such as ofo, which holds 30 percent, according to a market report released by Beijing-based consulting service platform sootoo.com on April 22. Other brands like Bluegogo and Kuqi together hold for about 14 percent.
Analysts said that more competition is likely between Mobike and ofo, and smaller players might face more challenges, the report showed.
To avoid fierce market competition, 3Vbike chose third-tier cities but the reality was more challenging than expected.
Problems included limited resources and the lack of support in some administrative departments.