(Yicai Global) March 8 -- The bike-sharing industry is becoming the savior of bicycle manufacturers.
As bike-sharing brands such as Ofo Bicycle Co. and Mobike Technology Co. ramp up efforts to establish their presence, the once-sluggish bicycle market has revived, Beijing Business Today reported. Large and mid-sized Chinese bike makers receiving orders from various bike-sharing brands have seen a sustained rise in earnings.
The swift growth of bike-sharing services has given a big boost to bike makers. "Our company has received orders from several bike-sharing platforms. Staff are working overtime to make bicycles. Our factory used to manufacture over 40,000 every month. Our output is 80 percent higher after we secure orders from bike-sharing companies," Ye Zhisong, manager of Guangzhou Zan'en Bicycle Culture Co., told Beijing Business Today.
Orders from bike-sharing platforms have accounted for one-third of the company's total in just a few months, Tang Weilong, chairman of Shenzhen Xidesheng Bicycle Co., said in a media interview.
Domestic bicycle brands had difficulty in transforming due to a lack of channels, marketing techniques and awareness of brand protection when bike-sharing services were as yet unavailable, said Wang Chaoyang, president of Shanghai Phoenix Bicycle Co. and deputy director of China Bicycle Association. Domestic bike sales have been declining over the past two years.
China produces around 80 million bicycles every year, over 70 percent of which are exported and about 20 million are sold domestically, said Wang. The emergence of bike-sharing services is expected to create demand for 20 million to 30 million bicycles in the domestic bicycle industry.
Bike-sharing platforms usually only choose large and mid-sized firms as their suppliers, said Bai Fengbao, manager of Tianjin Jiama Bicycle Factory. Small businesses may thus find it even more difficult to survive when the broader business climate is weak. "Though the booming bike-sharing industry has brought orders for bicycle makers, the rise of such services will have a big impact on the bicycle industry."