(Yicai Global) July 2 -- Once the darlings of investors, China's bike-share startups have been feeling the chill wind of bankruptcies and consolidation in the sector since last year. The change in business climate has taken its toll on suppliers.

The country's bicycle industry centers on the little-known, northeastern town of Wangqingtuo, near Tianjin. It once accounted for one-eighth of national output and sales of shared bikes. But 200 of its 500 makers have gone out of business, state-backed CNR Business Radio reported.

The survivors are now wary of taking what are usually massive orders from bike-share operators for fear their clients may go under before payment is made.

Several manufacturers have been hit hard by late payments, said Yang Qingliang, general manager of Tianjin Gueyda Bike. Contracts leave producers with little legal leverage, he added. Also, spare parts for shared bikes cannot be used on ordinary ones, according to Li Shuheng, general manager of Mingzhou Bike. That's why many end up as scrap.

A number of big name bike-share startups have gone bankrupt, including Xiaoming, Bluegogo, and Coolqi, while market leaders Mobike Technology and Bikelock Technology, better known as Ofo, had raised more than USD3 billion as of March but have struggled to turn a profit in their first years. 

Operators dropped 23 million units onto congested roads in 200 cities across China last year, oversaturating the market, while car-hailing giant Didi Chuxing and others are also muscling in on the sector. The country's 'bike graveyards' are mushrooming.
 

Editor: Emmi Laine