The COVID-19 outbreak has been contained in China over the past few weeks. A remarkable milestone appeared when China lifted the lockdown in Wuhan, the original epicenter of the coronavirus. The nation may be first in the global community to rebound from the pandemic. More businesses are reopening and people are returning to work. Hellobike, China’s leading two-wheeler transportation platform, said its business has largely recovered, as it is now operating at 80% of where it was over the same period last year. The company estimates its business will return to normal in May.
Despite the outbreak, the outlook for China’s bike sharing industry is still promising, as investors continue to inject cash into it. In April, Zhonhen pumped RMB 200 million into Hellobike’s joint-venture with CATL and Ant Financial after Hellobike had completed a new round of financing at the end of 2019. Also last month, Chinese ride-hailing platform DidiChuxing’s Qingju Bike reportedly raised USD 150 million in series A financing.
Hellobike executives forecast that the business will grow 100% in the year 2020 despite the coronavirus outbreak. In a press briefing on April 27 in Shanghai, they told reporters that last year Hellobike made some profits from its bike and ebike-sharing businesses. And the company’s car-pooling business has expanded quickly, into more than 300 Chinese cities.
The Chinese two-wheeler transportation industry has much space to grow. Every day more than 1 billion rides are completed on two-wheeled vehicles in China. Founded in 2016, Hellobike has completed several financing rounds, including funding from known investors such as Ant Financial and GGV. The platform has more than 300 million registered users, 63 million of whom are monthly active users according to a QuestMobile report.
“Our core strategy is to boost the development of our new businesses, and to continue to invest in new fields and new technologies,” Hellobike’s co-founder and CEO Yang Lei said at the briefing.
In fact, China’s bike sharing industry has transformed from fighting to attract customers to focusing on new ways to retain and better serve customers. Hellobike’s co-founder Li Kaizhu said at the briefing that the company has recently revamped its app and included more functions including travel route plans, bus-riding QR codes, as well as personal finance and other lifestyle functions.
Right now, Hellobike is focusing on the fast-growing e-bike industry. In China, 700 million daily rides are done on e-bikes, more than are taken on regular bikes, and residents in lower-tier markets are driving this trend. Yunqi, Hellobike’s new e-bike launched on March 23, is equipped with a Beidou navigation satellite system and a Bluetooth-enabled speaker, both of which improve rider safety. Together with the e-bike battery swap service launched last year, Hellobike has set up both the vehicle and battery network to roll out e-bike sharing services. Pilot tests in Kunming, Yunnan Province, and Hefei, Anhui Province, showed that e-bike sharing has become very popular among locals. For example, in Kunming, each e-bike is used more than 5 times each day on average, according to Hellobike. Right now, DidiChuxing and MeituanDianping are also investing in e-bikes.
While the COVID-19 pandemic heavily damaged China’s economy, it may have revealed new business opportunities for the e-bike industry. In Wuhan, when public transportation was shut down, essential workers rode bikes to work. Hellobike provided free rides for essential workers during the outbreak. Compared with often-crowded buses and subways, bikes and e-bikes are considered safe and healthy, as riders can practice proper physical distancing. The WHO, in fact, recommended bike riding in an April 21 technical guidance manual.
Hellobike’s data reveals that trips were longer than usual during the outbreak. Customers are likely to maintain their newly cultivated biking habit while China faces the prospect of new sporadic outbreaks, as they have gotten used to the combination of exercise and transportation. Finally, commutes on shared-bikes are increasing as riders look to avoid public transportation. Hellobike’s March 5 morning orders were 3 times higher than average February orders in Beijing, Shanghai, and Guangzhou. DidiChuxing also reports orders have recovered to about 60-70% of pre-pandemic levels and have increased by 5 times since the outbreak’s February peak.
China’s two-wheeler market is clearly entering a new era. The future is bright for companies that can seamlessly integrate e-bikes and battery technology with public transportation.
(Top photo from Hellobike)