(Yicai Global) March 27 -- Hello Chuxing’s electric bike business is not meeting expectations but the Chinese tech company remains firmly committed to and bullish on e-scooters in the long run, the firm’s chief executive officer told Yicai Global.

Although Hello might lose some money and take some detours, long-term expectations have not changed and the Shanghai-based firm will continue to invest, Yang Lei said at a recent industry gathering.

Hello, which started out as a pedal bike-sharing firm, wanted to extend the rental model to electric bikes but then discovered that the market was not ready, so it turned to manufacturing e-scooters instead, executive president Li Kaizhu said.

The firm entered the e-scooter sector in 2020 and by 2021 had 3,000 stores. At the end of that year, Li Kaizhu said he hoped that Hello’s electric bikes will feature among the top three brands in the next three years.

But these ambitions were not realized. Li Kaizhu said he applied the Internet business model to manufacturing and a year later he realized that it did not fit.

And even though, new national standards for electric bikes were introduced in 2019 demanding consumers to upgrade, leading firms such as Yadea, Niu and Segway-Ninebot already occupied more than half of the market, and it was not easy to increase market share.

This year, Hello is opening more outlets and in the past month it is opened four e-scooter stores in Luoyang in central Henan province, Shanwei in southern Guangdong province, Suzhou in eastern Jiangsu province and Taiyuan in northern Shanxi province, Li Kaizhu said.

Young people are Hello’s target market, said Li Weixing, an industry veteran. Over 60 percent of people who buy e-scooters are between 35 and 45 years old, but those aged between 20 and 35 years account for 70 percent of the potential customer base, he added.

Young consumers have different tastes and welcome new smart products, Li Weixing said. As competition in the electric bike sector heats up, Hello needs to find ways to stay ahead of the game.

Editors: Shi Yi, Kim Taylor