China’s Cycle Sharing Startup Ofo Bikes Considers India As Its Next Big Market


China’s cycle-sharing startup Ofo has turned its eyes towards India considering it as a prospective market, as reported by MoneyControl. The company handles about 32 million rides every day in 250 cities across 21 countries.

India’s rising growth potential in the global market and the increasing talent resource has led Ofo to look at this country as its next big market.

Speaking to MoneyControl, Rajarshi Sahai, India’s Director of Public Policy and Communications at Ofo said,

India is strategically very important for us, for the kind of market that exists here, and also for the amount of resources in terms of talent that is available here. The funding will allow us to expand our services to more cities globally and within India itself.

The Beijing-based startup recently raised an amount of $866 million by signing an agreement with Alibaba Group with the intention of warding off its biggest and most expensive competitor, Mobike, which is backed by Tencent, which is incidentally one of Alibaba’s biggest rivals. Ofo and Mobike are the two largest bike-sharing companies in China. 


This is not the first time that Ofo has collaborated with other companies to make its presence felt in the global arena in spite of stiff domestic competition.

In July, the Alibaba Group with the cab aggregator Didi Chuxing and DST Global had pumped in USD 700 million into Ofo.

Alibaba Group’s interest in Indian startups when Alibaba-owned Ant Small and Micro Financial Services helped Delhi-NCR-based food tech startup Zomato raise $200 million.

Other companies in this market

Ofo would be the first foreign player in this sector to invest in India and it would definitely provide a positive boost to the company. With strong backing from investors, Ofo’s entry is sure to increase the competition in this all sector.

Though few in number, India does have a number of companies interested in the app-based bike-sharing market.

Zoomcar had announced its entry into this arena with Zoomcar PEDL in mid-October launching its services in select locations in several cities. Ola had launched Ola Pedal in the first week of November at the IIT-Kanpur campus and is looking to expand to other campuses. Other bicycle sharing startups include Yulu founded by the co-founder of InMobi, Amit Gupta who had recently quit the latter firm. 

Ofo’s connection with India

Ofo first launched in India in the month of January after it had signed a Memorandum of Understanding (MoU) with the Pune Municipal Corporation. Soon, it spread its services on a pilot basis on other cities like that of Indore, Ahmedabad, Bangalore, Delhi, Coimbatore, and Chennai. 


With cautious steps and correct strategies, Ofo wants to move forward in the Indian market. Sahni has also pointed out that the company would be taking up a ‘government first’ approach making ties with state governments and municipal authorities to iron out the regulatory hurdles on their path. This approach of the company is quite similar to the one it takes up in its home market. Working closely with the local governments have helped them provide better service and also enabled them to scale up the company faster.

However, Chinese operators suffered from lack of technology that could track and monitor bike assets left at the docks, leaving them exposed to theft.

In India, Ofo has opted for a station-free bike-sharing concept. A field staff at several hotspots would be placed, who shall keep an eye on the bicycles being dropped, which would then be taken back to the repair center.

We have also invested in technology. We monitor the cycles through telematics, geolocation to understand trends such as where people like the most popular hotspot for cycle pick up or drop, mileage progression, usage patterns, and so on,

Sahni explained.

Although the two countries have distinctive features but vast and heavily populated cities in India would allow Ofo to use its expertise in the home market here as well. Along with this, India’s growing mobile payments culture is an added bonus.

Ofo has tied up with India’s leading digital wallet Paytm, which is also backed by Alibaba, to make it easy for customers to pay for rides.

In spite of a number of players in this market, Sahni insists there is no aggressive competition. He said

I am personally working with all these stakeholders to come together and build an ecosystem. As many players there are in this segment more it will be talked about. That’s good for us.

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