It hasn’t been more than a month that it was known that Didi would acquire Uber in China and people where intrigued how both giant tech companies where not registering profits as the splurged to gain more market share.

Now, another tech orientated company has entered “China internet warzone” as Bloomberg news calls it in the its article “25-Year-Old’s $500 Million Startup Fuels China Bike-Share Battle.
The bicycle is the new focus for the communist country, that in the old days the symbol of the communist party.

Ofo, backed by Didi with 100millions,  is one of the startups in China competing with Mobike, which is backed by Tencent Holdings Ltd. Tencent, well-known for its investments in companies like Wechat.

Both companies offer bikes across cities in China that can be accessed via their smartphones, locate them, and pay for the time they used and leave them locked wherever they want. While Ofo is the cheaper version, tracks down the bike via their smartphone and you unlock it via a code to the phone; Mobike has a GPS integrated system.

                 ofo       mobike     bejing

What it relevant is the model in which tech companies are ruling in China, spend as much as you want, get people; investors and consumers engage on your service and ultimately -maybe- make a profit.

The biggest aim in China seem to be to control the market, whether is by getting more consumers with freebies, getting as many bikes around as possible or making presence in a larger number of cities and places.

The competition is fierce, at such cheap prices they compete in a country where bicycles are easily accessible and the government offers public bikes you can find in designated racks that offer the first hour for free. The competition for costumers what would lean for the closer bike to them, regardless of the quality of the bikes or how to track them down.

Bottom line, the number one country with engagement to smartphones and apps is bringing back an old symbol of the communist party to the modern China with it fierce business model approach. Is yet to see if this “invest first get profits later”, (or ever) works in the long term.



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