Power Bank, bike rental companies grow for future profits


Shanghai-based Energy Monster, a company that provides rental portable chargers in public places for lithium battery cell phones, jumped nearly 18% when it debuted on the Nasdaq market in New York in the month. latest. Was this a sign that a popular trend in the so-called “sharing economy” is here to stay?

Energy Monster has installed portable chargers in bars, hotels, restaurants, entertainment venues and transportation hubs. He said he would use the proceeds from his initial public offering of US $ 150 million to fund business expansion and attract new partners to secure more public places.

The company, which counts Alibaba Group as one of its minority shareholders, announced a 39% revenue increase in 2020, but its profits fell 83% to 112.6 million yuan due to soaring sales and marketing costs.

National consultancy firm iResearch Inc estimates that the size of the mobile charging services market in China will grow from 9 billion yuan in 2020 to 106.3 billion yuan in 2028, with increasing smartphone prevalence and intensity of use. ‘use.

Why would consumers hire charging services when they can buy their own external batteries to carry with them?

Shanghai office worker Sophy Liu said the rental service was helpful.

“I want to keep my purse clean and light, and I can always find a power bank rental service in major shopping malls,” she explained. “It’s really a random choice and based on the type of portable battery available in a restaurant or cafe, so I’m not closely monitoring the service I’m using.”

Others are more skeptical of food bank rental services.

“I have to remember to bring my own power bank or have to pay 20 yuan to charge my battery in a downtown cafe,” wrote a Weibo user surnamed Huang.

Energy Monster energy bank rental services are widely available in public places such as shopping malls, cinemas and cafes across Shanghai.

The demand for such rental services could decline as new technologies emerge. Nowadays, many smartphones come with long lasting batteries that allow a user a full day of calls.

Energy Monster isn’t the only company in the sharing economy looking for money to grow.

While carrying your own battery charger can be relatively easy and even cheaper in the long run, it’s not as convenient to use your own bike to get around town. This tends to make the demand for bicycle sharing services stronger.

The state-owned bicycle rental company Hello Inc submitted a prospectus to the United States Securities and Exchange Commission for a listing on the Nasdaq in late April, with the aim of raising US $ 100 million.

Backed by Ant Group, the bicycle rental service has reduced its losses over the past three years to 1.1 billion yuan ($ 173.7 million) in 2020, from 1.5 billion yuan in 2019.

Hello cites a positive business outlook, with short-haul horse rides of 3 kilometers or less complementing public transport and enjoying frequent use.

The sharing economy is for consumers on the go. Instead of owning a vehicle or a personal food bank, people can turn to rental utilities.

Veteran tech columnist Lan Xi said the gradual lifting of pandemic restrictions means more people are on the move, giving the food bank and other rental services a boost. shared.

Today, many companies are looking beyond the sharing economy to make their businesses more sustainable models.

Amidst the competition, a merger of smaller players signals industry consolidation. Soudian and Jiedian, two energy bank rental companies based in Shenzhen, announced a day after Energy Monster’s Nasdaq debut that they were joining their business.

Despite initial skepticism during the emergence of rental power banks a few years ago, the industry has shown itself to be resilient and has begun to attract venture capital.

Companies operate by installing charging stations in public places so that customers can rent portable external batteries to carry and return them to any other terminal.

Many businesses operating in the sharing economy typically started out with special offers, such as low rental fees and discounts. After reaching critical mass, they began to focus on increasing profits by increasing costs.

Instead of offering free rides in the past, bicycle rental services now typically charge 1.5 yuan every 15 minutes and monthly subscription fees of 15-18 yuan.

Power Bank, bike rental companies grow for future profits

An elderly man is helped by a passer-by to scan a QR code to unlock a HelloBike shared bike.

In the area of ​​bicycle rental, too, competition has been fierce. Three major bicycle rental providers have survived price wars, including Hello, Meituan and Qingju. They have secured a loyal user base and are now aiming to develop alternative revenue streams to keep the businesses viable.

Didi, which completed a US $ 600 million fundraising round for its Qingju bicycle rental subsidiary in February, combined bicycle rental with electric scooter rental, targeting an average of 40 million daily trips from by 2023.

It also unveiled an electric scooter concept model this week to focus on lower tier cities where scooters are used more often for long-haul transport than bicycles.

Last month, HelloBike went beyond rentals and unveiled three models of two-wheeled smart electric bikes costing 3,999 yuan each, with an integrated operating system that uses mobile phones as “dashboards” for display critical vehicle operational data.

Li Kaizhu, co-founder of HelloBike, cited the high unmet demand for two-wheeled electric vehicles, a popular form of transportation for Chinese people, as the reason behind building their own vehicles.

Growing demand from China’s food and parcel delivery industry is also a factor.

The new models complement the existing scooters that did not eat with smart operating systems. The new models are available at offline electric scooter dealers and on the official HelloBike website.

The company is also testing the waters with carpooling and other lifestyle services.

“It’s a tough decision for HelloBike to seek a presence outside of bicycle rental, and it faces stiff competition from established players like Meituan and Alibaba,” commented Chen Liteng of the private consultancy China Ecommerce. Research Center.

According to the State Information Center, China’s sharing economy grew only 2.9 percent last year, valued at 3.38 trillion yuan. This was down from the 11.6% gain in 2019, largely due to the COVID-19 pandemic.

Growth is, however, expected to rebound to 15% this year and maintain an annual growth rate of 10% over the next five years.

Sharing economy operators recognize the need to closely monitor consumer trends as habits change and people become more price sensitive with their discretionary spending.

It remains to be seen how successful they will be in moving up the industry value chain.

Lei Ying, assistant professor in the marketing department at Beijing University’s Guanghua School of Management, highlighted how operators in the public rental and sharing economy can mine and use personal data. This, he said, requires delicate regulatory measures.


About Glenda Wait

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