Dai Wei, the founder and CEO of China’s leading bike sharing company ofo, has opened up about the background story of his company. He shared his entrepreneurial journey in an event held by management consulting services provider ShengJing Group on Wednesday.
Bike sharing has recently become a hot sector in China. ofo is one of the leading companies in this field, landing USD 130 million in Series C financing in October – yet the company was only founded in 2014.
Five bikes lost, a business opportunity found
Bikes are an essential means of transportation for most college students in China. Walking through a Chinese university, you will find swarms of bikes parked on campus; they practically surround every building. The downside is that bike thieving also seems ubiquitous.
Dai is only one of the victims of these thefts. He lost five bikes during his four years in college. He wanted to find a method to ensure that every student like him had a bike to ride, no matter when and where in the campus, according to his speech on Wednesday.
Dai and several other cyclists started to add plates and combination locks onto some of the bikes in his university, Peking University. Later, he and his team developed an app which would send the combination to students who want to use their bikes.
Dai’s ofo bikes were put into use at first in Peking University in September 2015, and started to expand to other colleges since October. Now, ofo bikes can be also found in certain urban areas of Beijing and Shanghai.
Ofo charges RMB 0.5 (7.4 US cents) per hour for students and a single RMB per hour for other users.
Ofo’s awesome edges
Ofo has so far provided over 20 million person-time services to its two million users, in 200 universities, in over 20 cities, according to company statistics. The company has signed exclusive agreements with 30% of the world’s supply chain firms. It can obtain a new user with as low as RMB 0.5 per hour, while the later-coming players will need three to five RMB, according to Dai.
Dai said that ofo’s daily income has reached RMB one million, with a gross profit margin of 70% to 80%.
Dai said that ofo can possibly become the first Chinese Internet company to influence the whole world. He thought that people from any country would need a bike for travelling distances shorter than three kilometers.
“I believe that one day people from all over the world can have access to ofo’s services. Ofo will one day influence the whole world,” said Dai.
(top photo from ofo’s Weibo)