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    China’s Uber Enters Cutthroat Bike-Sharing Market

    Analysts are optimistic about Didi Chuxing’s chances of competing with cycle rental titans.

    Unperturbed by the brisk winter weather and the already red-hot shared bicycle market, China’s ride-hailing giant Didi Chuxing has debuted its own bike-sharing service, joining the fray alongside industry giants Mobike and Ofo.

    On Thursday, Didi launched its new bike-sharing brand, Qingju, in Chengdu, capital of southwestern Sichuan province. Even though its bikes are turquoise-colored, the name “Qingju” means “orange,” the color used in Didi’s branding.

    In a statement to Sixth Tone on Friday, the company said it would allow users to ride the Qingju bikes via its car-hailing app without having to pay a deposit. The company chose Chengdu as a testing ground because it is China’s “most bike-friendly city,” it said.

    Earlier this month, Didi announced a cooperation arrangement with embattled bike-sharing company Bluegogo, which declared bankruptcy in November, only a month after being ranked China’s fourth-largest industry player. In a statement Friday, Didi said it would repair and redeploy Bluegogo bikes in Chengdu under its own Qingju brand.

    Didi also owns 25 percent of Ofo, which dominates the market together with rival Mobike. Qingju, Bluegogo, and Ofo bikes will all be rentable via Didi’s ride-hailing app.

    China’s bike-sharing craze kicked off in the summer of 2016, but last year it began to show signs of strain and market saturation, with a number of companies collapsing. Two months ago, Didi attempted to push forward a merger between Ofo and Mobike, which was blocked by executives of the two companies. At the time, analysts said the move indicated Didi’s ambitions to dominate the whole mobile transportation industry.

    Despite Didi’s late entry to China’s competitive bike-sharing market, analysts are optimistic about the company’s chances to steal a slice of the pie.

    “Didi is a bit late, but not too far behind,” said Zhao Xiang, a mobility analyst from Chinese consultancy Analysys. “Given the massive number of users on its own app and the company’s abundant funds, the future is bright.” Zhao pointed out that Didi  which already offers a wide range of transport options to its 450 million users  would now be able to add bike sharing to its list of short-journey solutions. In August 2016, the company acquired the Chinese arm of international car-hailing service Uber.

    Zhao also noted that Chinese consumers aren’t particularly loyal to bike-sharing brands, instead opting for whichever company has more bikes and offers the best experience.

    Zhang Hefei, an independent analyst specializing in tech and automobiles, said Didi would likely offer free rides or coupons in a bid to win price wars. He added that Chengdu’s warm weather and relatively good urban management made it a good place to test its bike-sharing service. “Also, the local government takes a more open and tolerant attitude toward the bike-sharing industry,” Zhang said.

    But challenges still remain for Didi, said Zhao of Analysys. “It still takes time for the company to produce bikes, put them into a competitive market, and encourage consumers to change their behavior,” she said.

    Editor: Julia Hollingsworth.

    (Header image: Commuters, many on shared bikes, cross an intersection during rush hour in Beijing, March 28, 2018. Kevin Frayer/Getty Images/VCG)