In 2015, an innocent idea of sharing bicycle started to mushroom in China. Soon under the burning of massive capitals, the competition became devious, then ferocious and so far we have clearly seen two A-level players emerging, along with two camps of prestigious investors behind with quite matched financial muscles. The orange family Mobike can be defined under Tencent while the yellow Ofo is the protege of Alibaba.
No one knows which camp will win eventually and that is why outsiders grab the popcorn and watch the show of cut-throat fight with excitement. Sometimes we even wonder the two foes might enter the marriage of convenience quickly as that is exactly what happened to the previous drama of car-hailing battle.
Nevertheless, it seems there will be new dust to be stirred in 2018. The instigator is our darling Didi, the #1 unicorn in China because it is no longer happy as the financial backer (estimated to be 25%) of Ofo. The reason could be manifold. Rumors suggested that:
-Didi wished to push the M&A between Mobike and Ofo, but it was simply too difficult to satisfy every big lion on this dinner table in order to close the deal.
-The relationship between Ofo and Didi somehow turned sour.
That is why it is said Didi took over a already dead bikesharing startup Bluegogo without paying a penny and will leverage this corpse to launch its own service.
It is a twist no audience is expected, a speedy cosplay role changing from an investor to competitor. Perhaps the move can be interpreted as the result of recent adrenaline injection of over USD 4 billion from Softbank into its war chest. Money simply can make you feel fearless. Didi said to itself, “Oh, I no longer like this bike-sharing club anymore, and we got plenty of money to do our own…”
The minute Ofo heard the whiff of this news, it immediately threw itself under the feet of Alibaba, begging and crying for more funding. It is said Alibaba nodded its head and hearsay indicated the amount is going to be USD1 billion. But we are also not so sure what Alibaba is up to. Alibaba seems to play a double dealing game. It also invested in a B level player Youon. Few speculate that Alibaba might eventually intend to marry Youon off to Ofo; the liaison should add more power onto Ofo and be very helpful beat down Mobike.
In the meantime, Mobike does not sit on the sideline idly and is already pulling rabbit out of the hat: it is going to dabble into car-hailing service as well, literally trying to steal a slice of pie from Didi. If we draw these schemes or rumors altogether, whether confirmed or not (it has four quadrants, horizontally divided by Tencent camp or Alibaba camp, vertically separated by the A-level player or B-level player), the scene does make your eyes blurry and your brain puzzled.
Some probably would ask is there any possibility that Didi might ditch Alibaba camp and collude with Tencent? The thing is the founder of Didi has been an Alibaba guy all these years because he worked for Alibaba in the past. During Didi’s initial fundraising stage, he always wanted to get financial support Alibaba, however, Alibaba chose to give the money to his archrival Kuaidi back then. Out of no choice, he accepted the investment deal from Tencent. It is said the relation between Didi and Tencent is never close enough.
In 2018, the epic drama of China bike sharing among top players should continue, because this house has been full of super money power and sky-high ego, feasting on the most lucrative return in the sumptuous ridesharing sector. Stay tuned!
Author: Cecilia Wu