Still space for competition in China’s bike-sharing frenzy: Hellobike

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Bicycles from Chinese bike-sharing companies like Ofo, Mobike and Hellobike

While Ofo and Mobike have a heavy presence in China’s top cities, Hellobike is trying to take market share in the country’s smaller, more rural cities. The start-up says it is present in 300 Chinese cities and claims that users take around 20 million rides on their bicycles daily.

He explained the decision to move into the smaller cities was motivated by the fact that Hellobike was a lot smaller than its rivals. “It’s actually less competitive to do business in the lower-tier cities, when Ofo and Mobike were pretty much concentrating in the tier-one cities,” he added.

As the other two companies make their push into China’s lower-tier cities, Chen said that Hellobike has “huge advantages” in areas of daily operations, maintenance and capital deployment efficiency. The company also does not charge users a deposit to use its bike-sharing service which, Chen explained, was “one of the key things” people think about before deciding on whether to hire a bike.

To be sure, despite the lucrative nature of the industry, both Ofo and Mobike have struggled in recent months as a result of vandalism, theft and poor maintenance of the bicycles. The Financial Times reported that Ofo has been burning about $25 million a month, while Mobike loses about $50 million monthly. Ride-hailing platform Didi Chuxing is reportedly in talks to buy Ofo, according to the FT.

Chen declined to comment on any potential merger between Ofo and Hellobike, which are both backed by Alibaba.

“Anything is a possibility but, basically, we’re competing with Ofo the way we are competing with Mobike. Simply because we have overlapping masters doesn’t mean that we don’t compete,” he said.