Hellobike plans to lead China’s two-wheeler transport market as bike-sharing rivals struggle

Shanghai-based firm will offer a range of two-wheeler options, including bicycles as well as electric bikes and scooters

Bike-sharing services

Zen Soo

Published: 5:00am, 14 Jul 2019

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China’s bike-sharing craze may have cooled considerably, but Hellobike has no plans of letting up as its competitors struggle.

The Shanghai-based start-up, whose fleet of bicycles sport a blue-and-white livery, became one of the biggest bike-sharing services provider in the country by focusing on smaller cities. In contrast, market leaders Mobike and Ofo battled in larger cities like Beijing and pursued international expansion.

While its two rivals have since beat a hasty retreat from overseas markets and laboured with the wide-scale contraction in their industry, Hellobike’s position in China could grow stronger as it plans to dominate the market segment for two-wheeler transport services, which include traditional bicycles as well as electric bikes and scooters.

“An average Chinese person uses many different types of transportation, depending on where he’s going,” said Hellobike chief financial officer Fischer Chen in an interview. “We want to offer different two-wheeler methods of transportation to better serve their needs.”

Fischer Chen, chief financial officer at Hellobike, says the two-wheeler transport market has been widely ignored in China. Photo: Twitter

That strategy shows how Hellobike will leave behind the brutal bike-sharing wars in China, which saw the top two players Ofo and Mobike spend billions to stay in the game amid cutthroat pricing and a government crackdown on bikes clogging up streets.

Bike-sharing took off in China in late 2016 with dozens of start-ups deploying millions of bicycles on city pavements, funded by billions of dollars in venture capital money. This market growth, however, cooled down as dozens of Chinese cities – including Beijing, Shanghai and Shenzhen – barred operators from putting more new bikes on the streets, which led to a swift consolidation.

The scaled down operations of its bike-sharing rivals have opened the opportunity for Hellobike to expand in the larger, first-tier cities. It is now operating in Beijing and Shanghai, and recently entered the southern city of Guangzhou. The start-up has plans to enter Shenzhen next.

“We started from lower-tier cities because, at that time, our competitors were already strong players in first-tier cities,” Hellobike’s Chen said.

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The three-year-old start-up’s investors include Alibaba Group Holding affiliate Ant Financial Services and Primavera Capital Group. New York-listed Alibaba is the parent company of the South China Morning Post.

The refocus on a range of two-wheeler transport methods, including bicycles and e-bikes, is expected to provide Hellobike users with more economical alternatives to booking a car ride. It would also enable the company to get higher usage frequency, more platform stickiness and wider brand recognition.

Chen said the company, which has a user base of 230 million, currently offers e-bikes in more than 200 cities. E-bikes enable users to travel further distances, while bicycles are ideal for trips of between 1 to 3 kilometres.

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Hellobike, Ant Financial, and Chinese battery maker Contemporary Amperex Technology Corp announced in June that they would form a joint venture, with an initial 1 billion yuan (US$145 million), to operate lockers equipped with fully charged batteries that e-bike users can pick up on the go.

Compared to the ride-hailing market, the two-wheeler market has been “widely ignored”, Chen said.

He attributed Hellobike’s success so far to efficiency, whether in deploying bicycles, capital or implementing cost controls. Unlike rivals who at the peak of the bike-sharing craze were deploying an excessive number of bicycles, Hellobike has always carefully controlled the number of bicycles deployed in a city.

“For us, it’s very clear how we’re differentiating ourselves from the others,” he said.

This article appeared in the South China Morning Post print edition as: Hellobike targets leadership role in two-wheeler sector

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