Here at RADII, we’ve been loyally documenting the ups and downs, promises and perils, and (most recently) the wipeouts of Chinese bike-sharing companies for a while now. Unfortunately for the startups — once considered the darlings of the Chinese tech industry — their idea is starting to look more like a bust than a boom.
Super app Meituan, who decided to buy into the shared bike dream by acquiring Mobike last April, is starting to kick itself for jumping on the bandwagon. The regret Meituan is feeling comes from their net loss of 8.5 billion RMB ($1.26 billion USD) last year, over half of which came from Mobike – which, remember, they haven’t even owned for a full year yet.
Having sobered up after the losses, Meituan announced on Monday it would pull Mobike out of “some Asian countries” and has already laid off staff and contractors in Singapore, Thailand, India and Australia. A disappointing U-turn for a company who just over a year ago unveiled its international ambitions.
Meituan even put out a report saying it would be more “disciplined” and “prudent” in its approach to new opportunities. While overall revenues have increased substantially, it wasn’t enough to offset the 4.6 billion RMB in losses contributed by Mobike since the acquisition.
But at least Mobike’s kickstand, while insecure, hasn’t completely slipped. Things are even more bleak for the nearly-bankrupt Ofo, who was also forced to rollback its international aspirations last year, and recently left millions waiting for refunds on deposits empty-handed.
Ofo also made the mistake of refusing a full acquisition by Didi last year, who according to rumors has blocked new investments in the smaller company. Mobike, on the other hand, should be thanking its lucky spokes that Meituan acquired them last April for the lofty sum of $2.7 billion – who would do that now? Even given that they have to change their name to Meituan Bike (which will happen sometime this year), the deal seems to have worked in their favor.
So Mobike will soon be Meituan Bike, and will Ofo even be here by the end of this year? Was the bike-sharing dream just an ephemeral high? Stay tuned — the ride isn’t over quite yet.
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