Brief: Chinese bike-sharing company shuts down after 90% of cycles go missing

Photo credit: Silent Hill / Imagine China.

The news:

• Chinese bike-sharing startup Wukong Bike has shut down just five months after launching, with US$147,000 in losses.
• The Chongqing-based company claims that it was forced to wrap up as it could locate only 10 percent of its bikes, with the remainder presumed lost or stolen.
• Wukong, which operated bike-share programs in Chongqing city center and on Chongqing University’s campus, said in a statement that it would refund its customers any outstanding value in their accounts.

Why it matters:

• China’s bike-sharing market is increasingly crowded. Tencent-backed Mobike and Alibaba-backed Ofo dominate, with a host of smaller players including YouonBike, UBike, and Bluebike also in competition.
• Wukong founder Lei Houyi told NDTV that the company was unable to secure a quality supplier like those used by its larger competitors, and that the bicycles it sourced from smaller suppliers proved to be too easily damaged.
• Wukong’s exit from the market demonstrates just how competitive it has become – and how important it is for entrants to ensure their vehicles are to a high standard.

Converted from Chinese yuan. Rate: US$1 = RMB 6.83.

Source: The Straits Times.