Hellobike plans to lead China’s two-wheeler transport market as rivals struggle

China’s bike-sharing craze may have cooled considerably, but Hellobike has no plans of letting up as its competitors struggle.

Photo credit: Hellobike

The Shanghai-based startup, whose fleet of bicycles sport a blue-and-white livery, became the country’s third-biggest bike-sharing services provider by focusing on smaller cities. In contrast, market leaders Mobike and Ofo battled in larger cities like Beijing and pursued international expansion.

While its two rivals have since beat a hasty retreat from overseas markets and labored with the wide-scale contraction in their industry, Hellobike’s position in China could grow stronger as it plans to dominate the market segment for two-wheeler transport services, which include traditional bicycles as well as electric bikes and scooters.

“An average Chinese person uses many different types of transportation, depending on where he’s going,” said Hellobike chief financial officer Fischer Chen in an interview. “We want to offer different two-wheeler methods of transportation to better serve their needs.”

That strategy shows how Hellobike will leave behind the brutal bike-sharing wars in China, which saw the top two players Ofo and Mobike spend billions to stay in the game amid cutthroat pricing and a government crackdown on bikes clogging up streets.

Bike-sharing took off in China in late 2016 with dozens of startups deploying millions of bicycles on city pavements, funded by billions of dollars in venture capital money. This market growth, however, cooled down as dozens of Chinese cities – including Beijing, Shanghai, and Shenzhen – barred operators from putting more new bikes on the streets, which led to a swift consolidation.

The scaled-down operations of its bike-sharing rivals have opened the opportunity for Hellobike to expand in the larger, first-tier cities. It is now operating in Beijing and Shanghai, and recently entered the southern city of Guangzhou. The startup has plans to enter Shenzhen next.

“We started from lower-tier cities because, at that time, our competitors were already strong players in first-tier cities,” Hellobike’s Chen said.

The three-year-old startup’s parent company is Hello TransTech, whose investors include Alibaba Group Holding affiliate Ant Financial Services and Primavera Capital Group. New York-listed Alibaba is the parent company of the South China Morning Post.

The refocus on a range of two-wheeler transport methods, including bicycles and e-bikes, is expected to provide Hellobike users with more economical alternatives to booking a car ride. It would also enable the company to get higher usage frequency, more platform stickiness, and wider brand recognition.

Chen said that the company, which has a user base of 230 million, currently offers e-bikes in more than 200 cities. E-bikes enable users to travel further distances, while bicycles are ideal for trips of between 1 to 3 kilometers.

Hellobike, Ant Financial, and Chinese battery maker Contemporary Amperex Technology announced in June that they would form a joint venture, with an initial 1 billion yuan (US$145 million), to operate lockers equipped with fully charged batteries that e-bike users can pick up on the go.

Compared to the ride-hailing market, the two-wheeler market has been “widely ignored,” Chen said.