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December 7, 2017

chinese bike sharing unicorns Ofo and mobike sets their Indian target

Alibaba-backed Chinese bicycle sharing unicorn Ofo  to enter india

Chinese Unicorns Ofo and Mobike promises to shake things up in the Indian Bike Sharing Space

Alibaba-backed Chinese bicycle sharing unicorn Ofo , which is one of China's hottest startups, the bicycle-sharing venture Ofo that is valued at $2 billion, aims to enter the Indian market by the first half of 2018,according to economic times. Ofo spokesperson said in an emailed response that the company’s strategy was in line with the growing interest in bike sharing as part of the smart mobility initiatives in India. “We hope to bring our globally proven technology and operational excellence to help this sector grow.” Social media posts by its senior executives also suggested that Ofo’s first port of call in India will be Chennai. The company has also been laying the foundation and building teams for a full-fledged launch in several other cities, including Coimbatore, Indore, Ahmedabad and Bengaluru. 

According to Chinese state news agency Xinhua ,Ofo will import bikes into India and proposes to offer its services for free and waive deposits till the year-end.Ofo's app allows users to track where its bicycles are parked as well as unlock and lock the two-wheelers. Users pay $1 an hour for the bicycles."Ofo's model would need to be tweaked and localized for the Indian market. 

Ofo operates in 200 cities across 19 countries, including China, Australia, Singapore, Japan and the UK. It has a fleet of 10 million bikes, powering 32 million rides a day. The company’s entry into India is a significant development given that it is the first foreign player in the segment. In its home market of China, Ofo competes with Mobike for the pole position. Both companies are valued around $1.5 billion, and there has been speculation that the two companies were exploring a merger to bring down cash burn. Mobike is backed by Alibaba rival Tencent. In July, Alibaba Group, along with cab aggregator Didi Chuxing and DST Global, had invested $700 million in Ofo.

Meanwhile, Ofo’s entry in India coincides with Zoomcar and Ola launching their operations in different locations. Zoomcar had announced its entry into app-based bicycle sharing in mid-October and had launched its services in select locations in several cities. Meanwhile, as we mentioned in our recent post former Inmobi founders are among the latest entrant in the bike sharing platform called "Yulu, Yulu is starting off with Bangalore as its test market with regular, dockless bicycles that people can rent using their iOS or Android phone. The bikes unlock via QR codes and bill the rider for every 30 minutes of use.

However if Ofo is here.. can its Chinese rival Mobike be  far behind? With Hyderabad Metro Rail deciding to set up dedicated parking space for bicycles, Mobike dockless bike-sharing app is hoping to set up its first bicycle sharing operations in the city. The China-based start-up is trying to get the first mover advantage by being the first of the three major dockless bike sharing startups trying to enter Indian markets in recent times.

In China, dockless bike-sharing has become so popular, that there were more bike-sharing rides in China in the first quarter of 2017 than the total number of on-demand trips in India in that same period. The problem, however, that many of these bike-sharing systems have come across is its bikes stacking up and congesting sidewalks and pedestrian roadways. That’s become a central concern for local regulators in the U.S. as dockless bike-sharing companies just beginning to take off.

With the Indian government investing heavily in developing infrastructure including new Rapid mass transits systems and Metro Rails, Bike sharing can help being a  part of the " last mile " connectivity  problem.