Bluegogo teams up with Alipay
As the battle for market share among Chinese bicycle- sharing companies heats up, one competitor Bluegogo announced Wednesday that it’s teaming up with the financial arm of Alibaba Group Holding, so riders with good credit ratings won’t need to pay a deposit to use Bluegogo’s bikes. Under its arrangement with Zhima Credit, a social credit scoring system developed by Alibaba affiliate Ant Fi-
nancial Services Group, Bluegogo won’t require deposits from users with credit scores above 700, Bluegogo CEO Li Gang said in a conference held in the Beijing 798 Art District on Wednesday.
The system will also help track users’ behavior, as companies have been struggling to prevent damage, dumping and theft since shared bicycles began to flood the country’s streets.
“By ending the deposit of 99 yuan ($ 14.38) per bike, it will be more convenient for people to use our bikes,” Hu Yufei, vice president of the company, told the Global Times after the conference.
Three major players in the industry require different amounts of deposits from their users. For instance, ofo requires 99 yuan as a deposit after users download its app on their smartphones. They then pay 1 yuan per hour when users ride the bikes. About 20 million people were using bicycle- sharing platforms as of 2016 thanks to the penetration of the Internet and smartphones in China.
Major participants in the sector have conducted several rounds of financing since 2015, Beijing- based industry research firm BigData- Research said in its annual report on the domestic online cycle market for 2016, which was released in February.
Aiming to solve the “last mile problem” for commuters, companies have put an increasing number of bicycles onto the streets. Ofo has put about 800,000 bicycles out, the most in the industry, the report showed.
“In terms of entering the market, we were late, which does not necessarily mean we are lagging behind,” Li of Bluegogo said during the conference. He noted that since it launched operations in November 2016, the company has had 6.25 million users and tapped into six cities, among which Shenzhen, South China’s Guangdong Province, has the highest number of cycles.
The battle for riders will continue to heat up this year, as companies are burning cash to win bigger market shares, Wang Chenxi, an industry analyst from Beijing- based consulting firm International Analysys, told the Global Times on Wednesday. “It’s possible that there will be mergers and acquisitions among companies, but it’s still too early
to say when,” she said.
The rapid growth of the bicyclesharing model has also raised questions including how to manage deposits and where to park. In Beijing, for example, as more and more users park bicycles on pavements, sometimes blocking pedestrian access, the municipal authorities are considering rules to regulate the bikesharing business.
The China Consumer Association is scheduled to have a meeting with representatives from the bicycle- sharing industry on Thursday to talk about those issues. “We are taking it very seriously,” Hu said, noting that companies are expecting close communication with regulators, as this Internet- powered business model is quite new in China and may raise many new issues.
Another concern among many users is whether online bicycle- sharing companies manage riders’ deposits properly.
A recent survey by the provincial consumer association in East China’s Jiangsu Province showed that many users have encountered problems with nonrefundable pre- charges and “unreasonable” management deposits, the Nanjing Daily reported on March 16.
“We put users’ deposits aside, and they will not be used” for any other purpose, a PR representative of ofo told the Global Times on Wednesday. She noted that users could get back their money at any time.
Wang of International Analysys noted that as more and more companies use credit scoring models in lieu of deposits, “the question is unlikely to arise in the future.”