Alibaba-backed Chinese bicycle sharing unicorn Ofo has entered India, likely intensifying competition in a market where three homegrown companies have been testing their services.
While several Chinese publications reported Ofo’s India foray last week, local ride-hailing firm Ola and Ford- and Sequoia-backed self-drive car rental startup Zoomcar have been running pilot bicycle sharing services for over a month.
When contacted, an Ofo spokesperson said in an emailed response that the company’s strategy was in line with the growing interest in bike sharing as part of the smart mobility initiatives in India. “We hope to bring our globally proven technology and operational excellence to help this sector grow.”
Social media posts by its senior executives also suggested that Ofo's first port of call in India will be Chennai. The company has also been laying the foundation and building teams for a full-fledged launch in several other cities, including Coimbatore, Indore, Ahmedabad and Bengaluru.
Ofo will import bikes into India and proposes to offer its services for free and waive deposits till the year-end, Chinese state news agency Xinhua reported, citing the company.
Ofo operates in 200 cities across 19 countries, including China, Australia, Singapore, Japan and the UK. It has a fleet of 10 million bikes, powering 32 million rides a day. The company's entry into India is a significant development given that it is the first foreign player in the segment.
In its home market of China, Ofo competes with Mobike for the pole position. Both companies are valued around $1.5 billion, and there has been speculation that the two companies were exploring a merger to bring down cash burn. Mobike is backed by Alibaba rival Tencent.
In July, Alibaba Group, along with cab aggregator Didi Chuxing and DST Global, had pumped in $700 million in Ofo, powering its global expansion in the face of tough competition at home. A Reuters report had said that Ofo was also in talks with SoftBank for a $1-billion funding round.
Incidentally, Didi, DST Global and SoftBank are also investors in Ola.
Ofo’s entry in India coincides with Zoomcar and Ola launching their operations in different locations. Zoomcar had announced its entry in app-based bicycle sharing in mid-October, and had launched its services in select locations in several cities.
Ola had launched its pilot in bicycle sharing in the first week of November at the IIT-Kanpur campus and looks at expanding this to other campuses. Meanwhile, InMobi co-founder Amit Gupta, who had recently stepped down, has launched bicycle sharing startup Yulu.