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This is Story in the Story.
Following a year of explosive growth, China's bike sharing businesses went silent in 2019.
No more new investments, and several bike sharing companies went out of business – fewer than 10 remain in China now.
The hot year for bike sharing was 2017, with more than 70 brands popping up all over China, and some moving abroad as well. But only two years later, most of them have disappeared as fast as they arrived.
Despite an increase in charges at the beginning of the year, making money has remained a headache for the bike firms – and investors disappear pretty quickly if you can't make money.
Today’s Story in the Story looks at the rise and rise of bike sharing which has now levelled off.
Mobike, a dominant bike-sharing company in China, is known for its orange bicycles. (Photo: AFP)
"It's hard for bike sharing companies as individual firms to turn profit because the repair and maintenance of the bikes are very costly," said Yang Zhongning, an investment consultant at Industrial Securities.
Yang said as the ride fees cannot cover the costs, the "reckless expansion of the industry" has gone – investors are calming down and the business is becoming more planned.
Those that still survive are backed by large firms. Hello Bike, for example, pledged all its bikes to Ant Financial, getting one step closer to completing its reliance on Alibaba.
After being bought by Meituan last year, Mobike's deficit narrowed in the third quarter of 2019, but it's still not making any money.
But despite the problems, experts are not saying that shared bikes will be disappearing any time soon – the demand remains huge. Data from research company iiMedia says the number of registered shared bike riders in China now exceeds 230 million.
Cui Lili, executive director of Institute of E-commerce at Shanghai University of Finance and Economics (SUFE), thinks that the only hope for bike sharing companies may lie in figuring out how to use the big data that their new owners can provide.
"For example, if 5G and the Internet of Things can be popularized, companies can use these technologies to lower their operational costs. They could also rely on them to accumulate big data such as customers' credit ratings, transportation habits and riding areas.
This could bring more values to the bike firms," Cui said.
A visitor sits at Didi Chuxing's booth during an internet expo in Beijing. (Photo: China Daily)
Bike-sharing startup Hellobike, which was rebranded as Hello-Chuxing, was the first off the block when it launched a new cab-hailing function for its mobile app users in September 2018, as it stepped up its competition with ride-hailing giant Didi Chuxing.
The company said at the time the new services would be available in 81 cities across the nation, including Beijing, Shanghai and Hangzhou in Zhejiang province.
Unlike other bike-sharing giants like Ofo and Beijing Mobike that focus on bigger and key cities and overseas expansion, HelloChuxing has a greater presence in second and third-tier cities in China, where it gained more than 200 million registered users in less than three years.
The Shanghai-based company also partnered with ride-hailing providers Shouqi Limousine & Chauffeur, Dida Chuxing and digital mapmaker AutoNavi Software.
"We have been focusing on how to better serve our clients and satisfy their commuting needs, in an effort to create a highly-efficient, convenient and friendly transportation environment for the public," said Yang Lei, CEO of HelloChuxing.
The bike-sharing hype also caught the attention of investors, who poured hundreds of millions of dollars into the major startups.
Ofo raised $866 million in a funding round led by tech giant Alibaba. Its competitor Mobike was acquired by China's largest provider of on-demand online services Meituan-Dianping, while Chinese ride-hailing leader Didi Chuxing launched its own bike-sharing service.
Data from global consulting firm Roland Berger estimates that the global market for bike sharing could reach $6.1 billion by 2020. Although China's bike-sharing market has grown rapidly over the past few years, as part of a booming digital economy, it will encounter challenges and bottlenecks, experts said.
(Produced by Nancy Yan Xu, Brian Lowe, Lance Crayon and Elaine Yue Lin. Music by: bensound.com. Text from CGTN and China Daily.)