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Mobike eyes British market in global competition with rival ofo

A man uses a smartphone as he rides a Mobike bicycle through an intersection in Beijing on October 19, 2016. Photo: Getty Images

China's leading bike-sharing firm Mobike will make inroads into Britain on June 29, a latest push in its global expansion that started with the service launch in Singapore in March.

Mobike plans to initially deploy 1,000 bikes in Manchester and Salford, its first destinations outside of Asia, where users will be able to pick up and ride bikes by scanning a QR code through the Mobike app, according to a statement released by the Chinese company last week.

Mobike aims to provide its affordable, environmentally friendly and socially beneficial bike-sharing service in about 100 European cities over the next few months, the statement said.

Steve Pyer, general manager of Mobike UK, revealed that negotiations with several other cities in Europe are in the pipeline, hailing the pilot in Britain as the first of many partnerships that allows the bike-sharing firm to make cycling the most convenient and affordable choice for people in the European cities.

Just days after the announcement about the service launch in the two British cities, Mobike raised more than $600 million in a new fundraising round led by China's technology giant Tencent to fuel its global expansion.

Mobike's foray into Britain intensifies its international competition with ofo, another well-funded Chinese bike-sharing startup endorsed by many heavyweight investors such as Didi Chuxing, the country's biggest ride-hailing company which bought Uber's China operation last year. Ofo has stolen a march on Mobike by launching a trial in Cambridge, Britain in April with 500 bikes.

Ofo is also planning to run business in three more British cities by the end of the year, Joseph Seal-Driver, ofo's UK operations officer, said, according to a Guardian report.

Mobike now has more than 5 million bikes in 90 cities globally, claims to provide 20 million rides every day at peak hours and plans to expand to 200 cities by the end of the year, while ofo operates 6 million bikes in 100 Chinese cities and offers service in the US, Britain and Singapore with a goal to enhance presence in 20 more countries including Japan, Spain, France and Germany.

Problems down the road

However, the development prospects of the Chinese bike-sharing companies doing business in the developed foreign countries remain uncertain because their national situations are different from China where the population is large, the regulations are loose and the public transport system is defective.

Mobike might find it harder to create a market for the last-mile transport in the developed countries as these countries have much smaller populations and relatively perfect public transport system, leading to the lack of demand for the bike-sharing business.

There have been media reports that in Singapore people showed less interest in Mobike bicycles than those in China because of the Southeast Asian country's developed public transport system and its hot weather.

In Europe, many governments have regulations which require bike operators to have fixed parking lots to manage random bike parking. But in China, one of the key advantages of Mobike and other bike-sharing service providers is that users can leave their bikes wherever they want, aggravating traffic problems.

This has caused a public nuisance in some Chinese cities, and forced Mobike to develop a smart parking system which uses advanced micro sensing devices to monitor whether the riders are parking the bikes in the designated parking bays. And in Manchester, Mobike will take a cautious approach to its rollout by starting with a six-month trial period in order to make sure that its service can operate in a way that does not disturb other road users and pedestrians.

Another problem that should be taken into consideration is about the high operating cost in the developed countries. It reminds us of Uber, which spent billions of dollars during its operation in China to gain more market share only to get it bought by the domestic rival Didi Chuxing.

Ofo CEO Dai Wei has said that the production and operation cost per bike in the US is about $300, lower than that in Europe. According to a report published on the, a famous technology news provider in China, Velib, a large-scale public bicycle sharing system in Paris, France, has to pay around 750 euros for a bike. Mobike needs to consider the high cost of making bikes overseas or the high tariffs it has to pay if it wants to transport bikes to the foreign countries where it wants to do business.

Even in China, some small-scale bike-sharing platforms are facing death. Last week, Chongqing-based Wukong Bike announced the end of its bike-sharing service only six months after its official launch. The company attributed the business suspension to strategic adjustment in a statement published on its Sina Weibo account.

There are two reasons behind Wukong Bike's downfall as reported: most of its 1,200 bikes in the western city of Chongqing were lost because the company did not equip the bikes with GPS devices; and Chongqing's mountainous geographic feature is not suitable for cycling.

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