Is sharing the end for bike ownership in China?

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‍By CGTN's Laura Schmitt

In Shenzhen in the far south of China is the factory that produces the “little yellow bikes”. This is the affectionate name for the two-wheelers operated by bike-share company ofo.

The factory workers have witnessed up-close the effects of the shared bike craze in China. Demand has translated into some very impressive production numbers and bike manufacturing in China, it seems, is making a big comeback.

According to the China Bicycle Association, more than 2 million shared bicycles hit the country’s streets in 2016. That number is expected to have risen to 20 million units in 2017 – equivalent to last year's total sales domestically.

It’s safe to say, China’s bike factories have not seen anything like it for decades.

“Now is our busiest period, much busier than last year. It was not busy at all last year. Orders poured in since the beginning of 2017. We have been working late every day, up to 8:30 pm or 9 pm,” says Su Zhida, Production Manager at Tailing Yoneda Bike Co., the manufacturer of ofo bikes.

Hu Zefeng, General Manager of Rax Zixin Bike Co., confirms that the shared bike craze has also driven up demand on their production line.

“Orders have amounted to 150,000. We’ve delivered 15,000. I have employed 500 more workers in my factories in Shenzhen and Tianjin,” he says.

While bike manufacturers are profiting, those making their living in the bike retail sector are facing up to a decline in their earning potential, as the traditional model of personal bike ownership is being eroded faster than at any time in recent decades.

Sun Hao, CEO of Tianjin Fushida Group, puts the situation in perspective.

“Bike sharing is more a renting business than retail. We realized its potential when we first heard about it in 2015,” he says. “Statistics on shared bike use from the period between the end of 2016 and mid-2017 suggest that this new rental business has had a significant impact on the traditional retail business.”

Shared bikes of all colors can be found on the streets of most major cities in China. /CGTN Photo

And this has hit retailers hard.

“Sales are falling year after year. The figure was just over 1000 last year. It’s hard to tell what will happen this year. It’s down by at least half for sure,” says Bai Yu, a bicycle shop owner.

So, does the emergence of the shared bike model spell the end for bike ownership? According to Dai Wei, CEO of ofo, everything is going according to plan.

In an interview with German business newspaper Handelsblatt, he explained: “I believe that in 10 years, no one will buy personal bikes any more. And bikes will become the first object that has no ownership.”

Rediscovering China is a 30-minute feature programme offering in-depth reports on the major issues facing China today. It airs on Sunday at 10.30 am BJT (02.30 GMT), with a rebroadcast at 11.30 pm (15.30 GMT), as well as on Monday at 8.30 am (00.30 GMT) and on Friday at 1.30 pm (05.30 GMT).

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