Asia Minute: Backpedaling from a Chinese Bike Share Company
For a little more than a year, Honolulu has had a bike sharing program on the streets. A similar program has been on the Big Island for even longer. But in parts of Asia, it’s a business that’s going through a lot of changes.
One of the largest bike-sharing companies in the world is about to pull out of South Korea. That’s the word this week from the Korea Herald — quoting sources familiar with the matter.
The Chinese company Ofo has been in South Korea for less than eight months. It’s one of several Chinese bike-sharing companies that burst onto the scene with global aspirations, and is now in fairly rapid retreat.
In the past two months, Ofo has pulled out of India and Israel. And has reduced operations in Australia and Germany. Ofo has also scaled back in the United States — pulling out of Seattle, Dallas, Chicago, Washington D.C., and New York.
The company has mentioned business trends and in some cases, city regulations.
But there’s also a basic issue of its business model that appears to have been lost in translation. Ofo operates a dockless bike-sharing program — which can lead to complications including bicycles being piled on sidewalks or being clustered in just a few locations.
There’s also consumer demand, and saturation.
The Financial Times this week reported that a bicycle factory outside Tianjin is suffering from a lack of demand from bike-sharing companies. The FT quotes a factory manager as saying that even last year orders were busy—but now there’s a new item that’s heated up – electric scooters.