COVID-19’s Effect on Chinese Micro-Mobility

Cycling as a mode of transportation has sparked during the lockdown period in China. Previous business plans from providers included flooding cities with thousands of bikes, which didn’t help with their social image, as many viewed the sheer mass numbers of bikes being placed as a nuisance. Now, with the use of Artificial Intelligence (AI), sharing platforms are able to identify the areas with the highest demand, allowing providers to turn their sights to the key profitable areas.

The sharing providers’ previous business models included merely dropping bikes off in different places with no reason for placing them there, which led to the bikes overcrowding the streets. Due to the annoyance this created for the public within these Chinese cities, ridership did not grow as the providers thought it would, which caused financial strains that lead to the closures of companies such as Ofo and Obike. If the providers had strategically placed the bikes instead, it would have appeared that demand was not an issue that contributed to the financial strain that the services experienced.

The year 2019 saw a huge spike in general for electric bikes rides in China, Hellobike saw over 700 million rides take place on both electric bikes and electric scooters. Electric vehicles started off primarily in lower tier cities, where public transportation is sparse, but now higher tier cities are seeing higher numbers of electric vehicles being used, thanks to pandemic-related lifestyle alterations. Mobike recently announced (May 2020) that it will be placing several hundreds of thousands of pedelecs on the streets in the second half of 2020, with more available as and when they are required. Didi Qingju Bicycle has also adapted its business models due to rise of the e-bike in China in order to expand its e-bike presence in 2020.   

Chinese cities are leading the charge in transforming infrastructure to welcome electric vehicles. Centralized charging points that are both secure and convenient for users are required. In addition to this, sharing operators are required to consider which charging option is best suitable to ensure complete monetization of their assets. Hellobike, for example, is partnering with Chinese battery manufacturer CATL to help deploy over 1 million electric scooters, implementing a battery swap model to ensure scooters and e-bikes operate under new monetization models.

ABI Research released our Smart Bikes, Scooters, and Pedelecs: Expansion of Two Wheel Shared Transportation Market (AN-5271) Application Analysis Report, which forecasted that within there would be 29 million connected shared bikes and pedelecs in the Asia Pacific region by the end of 2020, the majority of which will be based in China, prior to the COVID-19 outbreak. Though it was feared that our forecasted figures would be skewed globally in the short term when the breakout of COVID-19 initially started, trends arising similar to those in China may show that our forecasted figures will not be as skewed as initially thought.  

At the beginning of the boom of shared micro-mobility in China, pedelecs were not as in demand. However, sharing providers have noted a change in how many pedelec rides have been taken, which in some regions is over double the number of rides in the previous year. The rise of electric vehicles in the Chinese market requires significant advances to the infrastructure that was previously available to service providers.

The pandemic is bringing vehicle sharing into the mainstream even more than ever in the Chinese market; it is more convenient, and is slowly overtaking public transportation as a main method of transportation. As the public’s views on transportation sharing methods change, it is possible that operators’ different transportation methods will be seen more as Transportation-as-a-Service (TaaS), as the public will no longer have to privately own their own vehicles. This would be a breakthrough for the Mobility-as-a-Service (MaaS) market, as it would ultimately slow sales and shipments within the privately-owned market.