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China's shared charger sector to witness survival of the fittest
Before even yielding any returns, the shared phone charger sector is going through a big shakeout, with the strongest companies surviving while the weaker ones retreating from the market. Recently, the news about businesses closing down, downsizing and overdue payments have continued to spread, while on the other hand, active players remain sanguine about the market. Half a year after the news about investors rushing into the sector, the emerging “industry” aiming to provide a solution to mobile phones running out of power at all times and places, has once again come under the spotlight.

China's booming sharing economy has made “shared charger” the second-most pursued project after bicycles which have swept the country and even gone beyond national borders. But the industry seems to be shrouded in gloom half a year since the first round of investments rushed in this April. It's known some small companies have gone out of business.

Last Thursday, LeDian, a shared charger brand based in eastern China's Hangzhou, announced to cease operation through its WeChat public account. LeDian, generally regarded as the first player to bow out, did not disclose any reasons for the decision. Some industry insiders confirmed with the National Business Daily that LeDian is actually not the first, given that several smaller companies had left without being noticed before this.

“When a company doesn’t fare well, it goes bankrupt. It's quite natural,” Liang Kia, the CEO of SD Battery, said, noting even the best business models could not save a team from operating with low efficiency.

Ren Mu said things had gone wrong with LeDian's operation, analyzing its rout may be caused by blind expansion and wrong decisions to share profits with commercial stores where installations with shared chargers were set up.

The industry is staging mixed performances. It is known XiaoDian Technology is expected to gain over 0.5 billion yuan in its new round of financing; meanwhile, another player Chong Company acquired a financing of 0.5 billion yuan in August from investors including the Will Hunting Capital.

And some companies are stepping up efforts to expand into overseas markets. LaiDian Technology recently announced to work with 8pig.com, a travel app with offshore business activities to enter foreign markets including Japan, France, Australia and Canada. Anker Box, the company boasting huge amount of investment from Chen Ou, a high-profile E-shop entrepreneur, are building up installations in over 130 cities in the country recently.

Based on a Top 100 list of small programs on the WeChat platform by aldwx.com, the Anker Box tool is now taking the 19th place among the most popular, next to the JD.com tool. Ren Mu predicts the polarizing situation would continue and become even more prominent.

It is known that numerous power share companies including HiDian, LaiDian, Anker Box and XiaoDian had successfully raised funding since March 31. It is reported that within 40 days, a dozen of companies totally received financing of approximately Rmb 1.2 billion, and among the investors there were many renowned investing companies like IDG, Sequoia Capital China, Tencent, and Shunwei Capital.

According to some industry analysts, major players like LaiDian, Anker Box and XiaoDian have already occupied the most frequented offline scenes by potential customers, making it difficult for other players to enter. Despite that, some companies keep dipping their toes until this September.

“For the first half year, all companies had sped up to expand. Now it's time to test out the technologies,” said Ren Mu, noting technology could help surviving companies build stronghold, and resist competition.

Based on data, as of the end of September, the number of IP litigation cases involving shared charger technology amounted to 45. It's known that since this March, LaiDian has made 30 accusations against Anker Box, which involve six patents, with a compensation demand exceeding 66 million yuan. LaiDian provided proof to the media, indicating it has totally acquired 85 patents at home and abroad.

Responding to people's fear of cell phones running out of power, the charger sharing companies have found themselves a market. Still, some observers see the core competitiveness could only be gained through penetrating as many spots frequented spot by potential users and signing in as many shops as possible.

The remaining companies now are believed to be mainly focusing on three kinds of spots: the big ones such as airport, train station and metros; medium-sized ones such as shopping malls, theaters, restaurants and bars; and the small ones featuring all kinds of table boards.

 


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