China is witnessing a significant downfall in the bike renting and sharing market. One of the leading players Ofo – backed by Jack Ma owned conglomerate Alibaba- has contemplated filing for bankruptcy last year.
Seeing this as a warning, Meituan Dianping controlled Mobike is also going through a major restructuring. Last year it started the process of pulling back from several Asia Pacific countries including Singapore, Malaysia, Australia, and India.
At that time it had laid off the Asia Pacific operation team as well as staff and contractors in the countries.
Now, after studying the market further, it is pulling out of more Asian countries. Where it is not shutting down its shop, it’s re-evaluating its business. It had recently started operations in Europe and United States as well and these markets will now be subjected to scrutiny.
This restructuring process is expected to cost at least 10 employees their jobs.
The Tencent backed company was acquired by Meituan Dianping for $2.7 billion. Several companies in the segment that had achieved the unicorn tag went through acquisitions and contractions due to the fall in the demand, reports ET.
In India, Mobike had expanded operations after Ofo had pulled out in August last year. However, one month later the company backed out from Odisha govt’s bicycle sharing project before Hockey World Cup as it wasn’t able to timely meet the demands of the government.
It remains to be seen what fate has in for Mobike and cycle sharing companies in India like Mobycy.