Will Hello Transtech Survive In The Chinese Bike Sharing Market?

A recent Research and Markets report estimates the global dockless bike-sharing market to grow 21% annually over the period 2017 to 2022. But while global forecasts may sound appealing, China is witnessing an implosion in the industry. In 2017, China had nearly 40 bike sharing companies operating across its cities, with Beijing alone witnessing more than 2.3 million bikes from 15 providers. But since then, a few of these players have shut down and filed for bankruptcy. But recently, Billion Dollar Unicorn Hello TransTech raised additional funding, raising some hope for the industry.

Hello TransTech’s Offerings

Hello TransTech, more popularly known as Hellobike was founded in 2016 by Han Mei. By the time Hellobike decided to enter the Chinese market, there were already two big players in the region – Ofo and Mobike – both of whom had been operating for more than three years. In fact, both of these players had already raised their Series C rounds and the country was already a witness to millions of bikes lined up on its streets.

Hellobike was aware of its latecomer status and thus focused on the second and third-tier cities in China as part of its focus market. Analysts believe that in China, about 72% of China’s bike-sharing users are from its lower-tier cities, and the first-tier cities account for 28% of that market. Hellobike also entered into tie-ups with companies like Ant Financials so that users can use Ali Pay’s wallet to use the service instead of downloading the Hellobike app.

Its strategy has played well. By October 2018, Hellobike had established a stronger presence in these smaller cities. According to its reports, it was witnessing an average of 3-5 rides per day in these cities while its rivals clocked less than three rides in the tier 1 cities. It has established its presence in more than 300 cities in China and has clocked over 20 million rides a day to become the third biggest player in China.

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Disclaimer: More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion ...

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