Ofo widens Southeast Asia footprint with Malaysia and Thailand launches

Photo credit: walkingsky / 123RF Stock Photo.

Ofo introduced its dockless bike-sharing service to the Malaysian city of Melaka today, bringing the tally of countries where it operates to seven. This follows hot on the heels of its under-the-radar launch in Thailand.

The Chinese company is initially running a trial phase in Melaka city center. During this interim period – which runs until August 20 – each ride will cost US$0.23 per hour, and users will not have to pay a deposit as would usually be the case. Ofo is also handing out coupons to users entitling them to a free one-hour ride during the trial phase.

Ofo has already placed 500 cycles in the downtown area, with a further 1,500 set to be deployed by the end of this month.

After starting out in its home city of Beijing, Ofo expanded to other Chinese cities before making its first leap overseas to Singapore earlier this year. Since then, it has also launched operations in the US, the UK, Kazakhstan, and Thailand. The rollout of the latter took place in Bangkok recently, but apparently wasn’t announced publicly.

Ofo is not the first dockless bike-sharing app to reach Malaysia or Thailand, however. Singapore’s Obike arrived in Bangkok in May. It launched in Malaysia’s Klang Valley region a month earlier, and had 20,000 users signed up in the country as of this week. But at a hire price of US$0.23 per 15 minutes and with a $25 deposit to put down, it is more expensive than Ofo’s offering in Melaka – for the duration of the latter’s trial period, at least.

Bike-sharing has become a highly competitive business, with investors pouring in hundreds of million of dollars. Several dozen providers have arisen in China alone, some of which have ended in abject failure. Ofo’s biggest rival is Shanghai-based compatriot Mobike, which has also expanded beyond its native shores to Singapore and the UK. In the Lion City, the Chinese entrants also face stiff competition from homegrown player Obike.

Ofo has received the most funding of any bike-sharing company. Based on available data, it has attracted more than US$1.2 billion in investment. Its most recent cash injection was an Alibaba-led series E round worth over US$700 million.

With plenty of cash on hand, it isn’t too surprising to see Ofo hand out free rides and offer discounted rates. Trial-phase initiatives like this can help the company build recognition and reputation in its new locations – so that users who get hooked on the service may be willing to pay more for it farther down the line.

Converted from Malaysian ringgit. Rate: US$1 = RM 4.29.

(Update 5:12 pm: Added information on Ofo’s Thailand rollout.)