China’s smaller bike-sharing firms bow out of top cities, blaming ‘saturated’ market

The Chinese bike-sharing market is undergoing consolidation as smaller players turn away from big cities dominated by the two leading brands, to focus instead on opportunities in smaller urban areas.

Shanghai-based bike sharing company Mingbike, has gradually bowed out of Shanghai and Beijing in a strategy shift towards third, fourth and fifth tier cities, a move that drew complaints from some first-tier city users that signed up for its app.

Mingbike chief executive Chen Yuying said that the company began focusing on smaller cities in May, conceding that China’s first and second tier cities have become saturated.

She added Mingbikes recently stopped stocking new bikes in big cities, in an effort to wind down operations. She acknowledged there had been refund squeezes and payment delays, a reference to complaints filed by some users who said they’ve had trouble reclaiming their 199 yuan (US$29.87) deposits.

Other bike-sharing companies are weighing up plans or have already withdrawn from major Chinese cities. They cite a duopoly dominated by the signature orange and yellow coloured bicycles operated by Mobike and Ofo, which have a combined 90 per cent market share.

Hellobike, another bike-sharing start-up in China, switched focus to China’s smaller cities in October. The company’s co-founder Li Kaizhu said direct confrontation with the two leading brands in Beijing and Shanghai was unlikely to yield good results for the smaller players.