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Mar 23, 2017,  by Allianz Partners Business Insights

Shared, trendy and eco-friendly bikes put the Chinese back in the saddle

Rent a bicycle via a mobile application then leave it anywhere near your destination, and all for less than 20 cents per hour: this new breed of bike-sharing is booming in large Chinese cities. The ambitious promoters of the concept, who highlight its cool and eco-friendly aspect, are now hoping to launch their idea abroad.

 

 

 

The concept has given the lowly pushbike – long seen as a symbol of poverty in China – a new, hip image. Its creators claim that it can reduce congestion and limit pollutant car emissions. "We are focused on how to make the small bicycle have a big impact," explains Davis Wang, CEO of Mobike, the bike-sharing company that was launched in Shanghai in April 2016.

 

The end of fixed racks

 

In under a year, Mobike was established in thirteen Chinese cities. Like Ofo, its Beijing-based rival, it relies on the 700 million Chinese people who surf the internet and pay using their smartphone. The concept is a small-scale revolution: Mobike and Ofo have removed the shackle of collecting and dropping off the bikes at a fixed station.

In just a few seconds, via a mobile application, the user can release the lock on a shared bike left on the street and can then ride that bike for a Yuan an hour (around €0.17). Once they have reached their destination, they lock the bike and the corresponding amount is debited from their mobile account. The user can leave the bike wherever they like, ready for its next user.

 

 

 

15 million bikes between now and the end of 2017

 

Its simplicity is the key: the streets of Beijing and Shanghai are awash with Ofo and Mobike users. The system allows them to reduce their transport costs while limiting pollutant emissions. "An increasing number of people are prepared to ride a bike," says Hu Hong, age 29, who uses the system. "Young people are also looking to adopt a certain lifestyle," remarks Lin Chen, from the China Europe International Business School in Shanghai.

Ofo claim to have 10 million users and their yellow bikes are ridden in 33 cities. Their goal is to have 10 or even 15 million bikes in their fleet between now and the end of 2017, affirms managing director Zhang Yanqi. The company now has its sights set on the United States and Europe. Mobike hopes to break into the Singapore market in the near future, despite certain obstacles: the different regulations in other countries, the relatively low use of mobile payment methods outside of China, and the theft or damage of the bicycles.

 

 

 

 

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