<article>Asian bike-sharing startups Gobee and Ofo last week announced their decision to wind down operations, making them the latest players to have succumbed to increasing pressure in a tough industry that has claimed successive scalps.</article>

Asian bike-sharing startups Gobee and Ofo last week announced their decision to wind down operations, making them the latest players to have succumbed to increasing pressure in a tough industry that has claimed successive scalps.
Hong Kong’s first bike-sharing service, Gobee, on Tuesday announced it was shuttering its business in the city, citing “enormous maintenance” costs that contributed to losses since it launched in April last year.
“The enormous maintenance cost has made it difficult to sustain operation,” chief executive Raphael Cohen said in a statement on the company’s official Facebook account. “The decision is not an easy one to make and we feel deeply sorry for the withdrawal of services.”
Before its liquidation, Gobee had gradually retreated from some of its other overseas markets. In February, it decided to pull out from Europe after reporting that as many as 1,000 bikes had been stolen and nearly 3,400 damaged during its four months of operation in France.
Faced with a similar market retreat is Ofo, one of China’s biggest bike-sharing platforms with a number of overseas operations. According to several media reports, the company has decided to exit India, Australia, Israel and several other markets in the coming months to focus on its priority markets.
Ofo&#8217;s retreat from Australia coincides with a similar move by local firm Reddy Go, which is reported to be pulling out of Sydney.
Prior to these recent developments, oBike, a Singaporean operator founded by Chinese investors, had also pulled out of Australia, not long before its eventual shutdown two weeks ago in the city-state.
Singapore recently also witnessed two other players exit the market, namely ShareBikeSG and GBikes, reportedly due to a strict new licensing regime.
According to Jianggan Li, founder and CEO of venture builder and investment consultant Momentum Works, these exits are prompted by these players&#8217; difficulty to achieve operational efficiency and profitability due to fierce competition and the injection of a massive amount of capital into the industry.
&#8220;Small players (like oBike) and bike manufacturers were the first to be burnt because the former can&#8217;t keep up with the capital needed to compete, and the latter can&#8217;t get their money back after their clients (the bike-sharing companies) go bust. The bigger players in China also found it hard to sustain because of the exact model of fast growth &#8211; they would still need a massive amount of capital to keep going but it became hard for them to raise additional funds,&#8221; he said.
It is understood that one of the reasons for Ofo&#8217;s retreat is to focus more on the heightening competition in China, where a majority of Ofo users are based. While more than a dozen players have tried their luck in the business, the rise of Ant Financial-backed Hellobike and Mobike, which was acquired by internet giant Meituan in April for $2.7 billion, poses the biggest threat for Ofo and its other peers.
Unlike traditional bike rental services, Chinese bike-sharing companies, including Gobee and Ofo, operate a “station-free” solution where users do not have to pick up and drop off the bikes at designated locations.
Gobee, which was launched in April 2017, was backed by Grishin Robotics and the Alibaba Hong Kong Entrepreneurs Fund, a non-profit initiative by Alibaba Group.
Meanwhile, Ofo, founded in 2014, has raised $2.2 billion from venture investors, which includes Alibaba Group Holding Ltd.
It had been previously rumoured that Ofo had been planning to acquire Gobee in April. The deal, however, never materialized.
Also Read:
<a style="color: #ff0000;" href="https://www.dealstreetasia.com/stories/alibaba-injects-280m-bike-sharing-firm-ofo-93579/">Alibaba affiliates inject $280m in bike sharing firm Ofo – Report</a>
<a style="color: #ff0000;" href="https://www.dealstreetasia.com/stories/sharebikesg-singapore-exit-101183/">ShareBikeSG becomes third bike-sharing firm to exit Singapore market</a>
<a style="color: #ff0000;" href="https://www.dealstreetasia.com/stories/lyft-bike-sharing-motivate-101075/">Lyft forays into bike-sharing with Motivate acquisition</a>

Gobee and Ofo are the latest players to have succumbed to increasing pressure in a tough industry that has claimed successive scalps.

More Asian bike-sharing startups forced to pedal out of markets

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