China's Car-Sharing Operators Overtake Bike Firms to Bag Biggest Funds
Wu Ziye
DATE:  Jun 29 2018
/ SOURCE:  Yicai
China's Car-Sharing Operators Overtake Bike Firms to Bag Biggest Funds China's Car-Sharing Operators Overtake Bike Firms to Bag Biggest Funds

(Yicai Global) June 29 -- China's car-sharing service providers have replaced their once-hot bike-sharing counterparts to become the biggest targets for investment.

Auto-sharing firms had received CNY76.5 billion (USD11.5 billion) in financing as of the end of last year, according to the China E-Commerce Research Center. In comparison, the country's two leading bike-sharers had landed USD2.2 billion as of November. That was before Beijing Bikelock Technology, which runs Ofo, landed USD866 million in a March fundraising led by e-commerce giant Alibaba Group Holding.

China's car-sharing sector includes names such as EVCard, the Shanghai-based electric car rental unit of SAIC Motor formed in 2016, and Cligo, which was set up in Beijing last year. The market is expected to reach CNY1.8 trillion this year, consulting firm Roland Berger has said, while demand far outstrips supply.

But the sector faces its own challenges because it needs stronger capital support to scale up and become profitable. For years the bike-sharing firms have struggled to turn a profit. Ofo got into trouble while failing to return its deposits to users, and a number of providers such as Xiaoming, Bluegogo and Coolqi have gone bankrupt. 

The cost of making a car is much higher than that of a bicycle and one luxury car-sharing platform called Ezzy went bust last October.

Some platforms are exploring new business models to tackle the sector's problems. Cligo partnered with carmaker Beiqi Yinxiang Automobile two days ago to jointly make vehicles designed to meet the needs of the sharing economy. Others target third- and fourth-tier cities to avoid stiff competition and the lack of parking space in first-tier ones like Shanghai.

Editor: Emmi Laine

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Keywords:   Ezzy,Cligo,Mobike,OFO,Beiqi Yinxiang Automobile