Bike-sharing has been a roller-coaster ride, and in 2018, the tide turned. Ofo and Mobike, once great companies, are now in a dilemma as one turns to Meituan. In this situation, As a latecomer, Harlo received a new round of financing on December 28, 2018.
In the fierce market competition, how did Hello break through and survive?
Two big names in Hello: Wing on Hong and Ant Financial
While Mobike and Ofo are thriving in first-tier cities, Harrow Bike has quietly chosen to expand its business in second – and third-tier cities, avoiding direct competition with strong rivals, and then bucking the trend.
At that time, the situation of bike-sharing emerged from a war of 100 teams to a two-horse race. Ofo and Mobike received a large amount of financing, while the capital left for Harrow bike was not much, which to some extent caused harrow bike to be in a long-term financial shortage. In October 2017, Wing On Hong rescued harrow Bikes from distress.
According to public information, Wing On Hong has eight years of operating experience and its main business is the research and development, sales, construction and operation of public bicycle systems. Its main customers are government agencies, third-tier and lower-tier cities and counties. As of June 30, 2018, Wing on Hong has successfully launched public bike programs in about 260 cities and regions across China.
In terms of the audience, Harrow bike and Wing on the idea of the same. Soon after Wing On Hong took over Harrow, Ant Financial also put wings on harrow.
In December 2017, Ant Financial and other companies participated in the D1 round of INVESTMENT of $350 million. In April 2018, Ant Financial participated in another investment of nearly $700 million in Hello Chuxing. In June 2018, Ant Financial and other companies invested 2 billion yuan in Hallow Travel, and made a strategic investment of 1 billion DOLLARS in Hallow Travel in July the same year. In December 2018, Ant Financial and others raised about 4 billion yuan for Hello Chuxing again.
That said, The company’s survival is largely dependent on ant Financial’s massive investment. Moreover, in March 2018, Hallow Travel and Ant Financial jointly launched a deposit-free policy. As long as users’ sesame credit score is above 650, they can ride without deposit, which brought the number of hallow Travel users to explosive growth. According to official data from Halo Travel, its users increased by 70% in the two months after the deposit-free policy was introduced.
In addition, Alipay provides an entry point for Harrow bikes, making it easy for Alipay users to use harrow bikes directly. It can be seen that both the entrance of Alipay and the policy of deposit-free have brought a certain number of users to Hallo Travel.
Tianyan revealed that Shanghai Junfeng Network Technology Co., LTD., registered in 2016, is a wholly-owned subsidiary of Jiangsu Yonganxing Low-carbon Technology Co., LTD., harrow’s parent company. As early as April 2018, Shanghai Junfeng Network Technology Co., Ltd. began to apply for “Hallo” series trademarks, including “Hallo travel”, “Hallo McLe-bike”, “Hallo car”, “Hallo shared bike”, etc. The trademarks include “tourism and logistics services”. “Insurance, finance, real estate”.
In September 2018, Harrow Bike officially changed its name to Harrow Travel and started its Harrow Car travel business. With wing on Hong and Ant Financial as the strong backing of The two trees, it is not too much to say that the resurrection of Harlo, but more to show the ambition of Harlo.
In short, there is no disputing the fact that The company has already been acquired by bicycle giant Wing on Hong. Similarly, Mobike, once a promising competitor in the bike-sharing arena, was also on the path to being acquired, but ended up being “completely metanized” after its founder Hu Weiwei resigned.
The helplessness and adjustment behind Mobike’s prostitution
Judging from mobike’s disclosed financial statements, even though it has received a large amount of financing, its development status is not optimistic. On April 4, 2018, Mobike finally sold itself.
On the one hand, Mobike is caught in the trap of high cost and heavy assets. According to mobike’s financial statement released by Blue Whale TMT, the cost of each car is around 1,000 yuan, based on the depreciation cost of a single month in December 2017 and the three-year use cost of each car. And the statement of impairment loss every month has 0.8 billion yuan, on average every month there are 80,000 cars can not be put into use normally.
In addition to the cost of building a car, Mobike has also struggled to reduce operating costs such as vehicle damage rate, vehicle maintenance and personnel scheduling costs. According to its financial statement, Mobike’s operating and management costs reached 429 million yuan in December 2017, while its revenue was only 110 million yuan. In fact, such a situation is a long-term phenomenon, obviously, It is difficult for Mobike to achieve positive profits, so it is constantly elongating the cycle of Mobike’s return.
On the other hand, Mobike’s ability to achieve self-hematopoiesis is poor. In fact, Mobike has been over-reliant on financing and has yet to find a balance. The number of rides of users is not stable and fluctuates, which also affects Mobike’s cash flow to a certain extent. It is understood that in December 2017, the average number of rides per mobike decreased from nearly three to one, and the average number of rides per mobike is about 10 million per day, with about 300 million rides per month.
With revenue of 110 million yuan, even three rides per bike per day would not break even. In other words, mobike’s profit model is unclear.
After a costly war, Mobike was left with huge losses, and it had no choice but to sell meituan.
However, even if Mobike finds a “good dad”, that doesn’t mean it will survive without a hitch. According to Meituan’s prospectus, Mobike has been losing money since it was acquired by Meituan in April 2018, with a gross loss of 407 million yuan from April 4, 2018 to April 30, 2018, equivalent to a daily loss of about 15 million yuan. In addition, Mobike has become one of the main factors contributing to The loss of Meituan after being included in the company’s consolidated statements.
In other words, mobike’s losses have not improved much since it was backed by Meituan, but it has dragged down Meituan’s performance. Even if the outcome is predictable, why would Meituan take on the debt for Mobike?
One is to compete with Didi. After all, Meituan also launched Didi’s main business, ride-hailing, and Didi bought a stake in Ofo, so Meituan also wants to enter the bike-sharing market. On the other hand, meituan is also to compete against Alibaba. Tencent has the backing of Meituan, and the rivalry between Tencent and Alibaba has already come to the stage. In addition, two of the three companies ofo, Hello and Mobike have been supported by Alibaba, so It is understandable that Tencent does not want to spare the remaining Mobike.
This is why Meituan bought Mobike for a large sum of money, and it is impossible for Meituan to sit idly by in the face of bleeding Mobike, as can be seen from the recent major media reports about mobike’s layoffs and business adjustments.
On December 23, 2018, news of mobike’s layoffs spread all over the Internet. Some Mobike employees revealed on social media that Mobike will optimize personnel in departments with business overlap with Meituan, such as marketing, finance and technology, and the overall layoff rate will be between 20% and 30%.
However, Mobike has said that these are normal business adjustments to better focus on core capabilities and improve the efficiency of the business. And the recent layoffs of these enterprises, most of them are personnel optimization adjustment as an excuse. It can be seen that even mobike, which has embraced Meituan, has been swept by the cold wind.
Now, with the departure of the original members of Mobike, the voice of Mobike is gradually transferred to Meituan. It can be said that Mobike has become a pawn in Meituan’s industrial development layout. However, Halo Chuxing not only has problems in making profits, but also relies on financing to survive, which is more or less similar to Mobike. Perhaps in the near future, hallo, like Mobike, will see its voice shift and become a pawn of the giants.
Harrow also has to be wary of losing his voice when it comes to ride-hailing and riding
Enterprises in the whole bike-sharing field have varying degrees of profit problems, and in a short period of time, it is not easy to achieve profit sharing. So it makes sense for Hello to jump out of the dilemma of bike sharing and enter the arena of online car hailing.
However, the ride-hailing market is actually completely different from the bike-sharing market, and the market pattern in the whole ride-hailing market has been relatively stable. As we all know, hello broke the bike-sharing market, or burn a lot of money. If it still burns money to enter the ride-hailing market, it will encounter resistance, not to mention the need to save a lot of money in advance.
At present, China’s online car-hailing market is highly competitive. It is understood that a number of competitive enterprises have already appeared in the online car booking market, such as Didi, Shenzhou, Shouqi, etc., it can be said that most players have occupied a certain market space by differentiating positioning. As a newcomer to the ride-hailing market, Haro has faced as many difficulties as he did in the bike-sharing market.
At present, the competition strategy adopted by the major ride-hailing platforms is nothing more than to reduce commissions and increase subsidies. It will cost Haro more to get a piece of the action. This is a cross-industry breakthrough, so if Haro does not improve its profitability, its losses will likely increase further. Didi Chuxing, for example, has struggled for years to make money in the ride-hailing market. Didi reported a net loss of 4.04 billion yuan in the first half of 2018, with subsidies and incentives for drivers accounting for the majority.
If The company wants to avoid using subsidies to attract users, finding effective ways to capture the market will be difficult for it to crack. And in the process of finding it, Haro will not necessarily cost less.
The ride-hailing market is known for its immature regulatory mechanism, with negative headlines such as the sexual harassment of passengers by drivers and the murder of flight attendants. It can be seen that the market environment of online ride-hailing is definitely different from that of shared bikes. If The operation thinking of Hello does not change with it, it is inevitable that there will be security incidents of one kind or another, and there may even be bigger security loopholes. However, in order to meet the requirements of market norms, Haro has to adjust its original operation mode and business mode more or less, which is a great cost.
In any case, Haro is bound to export a large amount of capital to lay out its business. It is worth noting that among the two bike-sharing companies supported by Alibaba, Haro has a better current situation than Ofo. Naturally, Alibaba will be more focused on Haro, and Haro will be able to obtain financing to develop its business.
But it’s important to know that Mobike has largely lost its voice to the monetization puzzle. For Haro, which already has its back to the giants, it may be difficult to shrink its losses in the future without using its ride-hailing business to boost its revenue. In that case, could Hello suffer the same fate as Mobike?
In a word, although Haro has ridden out of the dilemma of bike-sharing and entered the arena of online ride-hailing, its development is not certain, and it still has many challenges to accept. If the problem of profitability is not solved, Hello may become only a tool in alipay’s offline payment layout, or even the next Mobike that loses its voice.
Article/Liu Kuang public number, ID: Liukuang110, this article first kuang Venture capital network