China’s bike-sharing battle ratchets up a notch as Didi Chuxing enters the fray
The two most aggressive Chinese bicycle-sharing apps look to their bigger backers for support – Didi Chuxing for Ofo and Tencent for Mobike
Didi Chuxing, the Chinese answer to Uber Technologies, is doubling down on the country’s red hot sharing economy by offering one of the largest bike sharing providers in China its most valuable asset – access to its 400 million users.
The dominant player in China’s ride-hailing industry said on Thursday that it has added Ofo’s bike-sharing service to its app in a move that will promote the start-up “progressively across China”.
Didi’s 400 million users across 400 Chinese cities, who have already used the app to hail taxis, private cars and even for car-pooling, will have direct access to Ofo’s signature bright yellow bikes in the app.
The move is a major step towards “more extensive collaboration” after Didi last year became an investor in Ofo and is seen as a counter punch against the partnership between Ofo’s arch-rival Mobike and its heavyweight backer Tencent Holdings.
In March, Tencent’s popular app WeChat integrated Mobike into its wallet interface, giving the bike-sharing service access to its more than 800 million monthly active users.
Neil Wang, greater China president at Frost & Sullivan, said the rivalry in China’s bike-sharing battlefield is moving beyond competition for investment. “More importantly, it is about resource sharing in the long run,” he said.
Around 30 start-ups in China are betting big on the app-enabled bike-rental business to grow themselves into the next Didi in a sharing economy that has seen colourful bikes crowding the sidewalks of major cities thanks to capital injections by venture capitalists.
The Beijing-based Didi, which drove Uber out of the China market in 2016 after years of cash-burning competition, is reported to be raising another US$6 billion in a new funding round, which would push it into the ranks of the most valuable tech firms in the world.
The Beijing-based Ofo and Mobike are taking the lead in the bike-sharing sector with the most funding and the most prominent backers. By renting bikes at 1 yuan (14 US cents) per hour, the three-year-old Ofo has already been able to raise a total of US$650 million at a valuation of more than US$2 billion from investors including DST and Ant Financial, the internet finance major controlled by Alibaba Group’s Jack Ma Yun. Alibaba also owns the South China Morning Post. Rival Mobike has landed big name investors, such as Temasek Holdings and Hillhouse Capital.
“The fragmented time people spend on mobile devices is the next battleground for companies. Super apps, such as WeChat, Alibaba’s Taobao and Didi have gained a significant part of [people’s] time. Newcomers like Ofo or Mobike can either build from the scratch or borrow the time from the existing powerful players,” she added.
