According to the Nikkei News, a few days ago, Beijing Baike Rock Technology, which operates “ofo”, conveyed its intention to withdraw from the Japanese market in Otsu City, Wakayama Prefecture, Wakayama City, and Fukuoka Prefecture, Kitakyushu City.
Ofo has been highly regarded as the standard bearer of the sharing economy, but the company’s operating capacity has declined due to the intensification of competition in the Chinese market and the cost of coping with the problem of chaos.
Otsu City has just started working with the company since the end of April, using 400 bicycles and 66 bicycle-specific parking spots to carry out shared bicycle business. It is reported that on October 17, ofo informed Otsu City that “discussed to withdraw from the Japanese market at the end of October” and there was no news after that. The Otsu City Urban Recycling Course is difficult to say that “the factual relationship is being confirmed.”
Wakayama City also received a phone call fromOo on the 18th and was told to withdraw from the Japanese market. The city asked about the time of withdrawal, etc., and the other party only replied that “you will contact you after consulting with the headquarters”.
Kitakyushu also acknowledged that it had received a notice to stop the service. The city’s road maintenance class said, “We asked if we can continue to do business, but it should be difficult.”
Ofo and Mobike are the two major companies in the Chinese sharing bicycle industry. Mobai started business in Sapporo City, Hokkaido, and Fukuoka City, Fukuoka Prefecture, and evacuated Sapporo at the end of November 2017. Regarding the reasons for the withdrawal, the relevant person pointed out that “due to the snow, the annual accounting is difficult to achieve profitability, and there is also the problem of internal personnel abusing the sharing of bicycles.”
According to analysis, the number of users at the peak of ofo exceeded 200 million and entered about 20 countries. The company also received funding from Alibaba Group, and its corporate valuation once reached $3 billion.
However, the competition in China is becoming more and more fierce, and the chaos of bicycles has gradually become a social problem. The mobile cost of bicycles has increased dramatically. In addition, the government has requested that the shared bicycle operating companies have the obligation to return the deposits to the users. Since 2018, the operation of theo’s funds has been considered to have deteriorated.