Just a few months ago, you would hear Chinese bike sharing companies making announcements here and there, but not see actual bikes being deployed.
Back then, all these public shows seemed to serve only one purpose – to tell the audience back in China (investors, partners etc.) that hey we are global.
However, did you notice that in the past few weeks that they seemed to suddenly accelerate their global expansion?
MoBike launched in Washington DC; while ofo went all over Southeast Asia & Europe, even sending a recruitment team to INSEAD’s Fontainebleau campus in France.
And this week, ofo even announced the entry of the market of … Russia.
What is behind all these?
Well – one key reason is, growth in China is going to slow down. The streets in all the major cities (apart from mountainous ones such as Chongqing) are filled with bikes. The density is so high that often times the whole pavement is taken.
Some government data showed that more than 16 million shared bikes have already been deployed China.
The regulators start taking action on these externalities of competition. In August, Shanghai, Hangzhou and Nanjing have banned new bikes from being thrown into the streets.
More than a dozen cities have followed suit since. And in a press conference earlier this month, Beijing government revealed they were considering putting a limit as well.
So when these companies still need to raise more money, have a long way to make money on their own, and find limited further growth potential in China…
Voila! You have guessed right – they go international!
Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected]