Editor’s note: This was originally a two part report by Li Siyi and Jiang Xiaochuan for Tencent FinanceIt has been translated and further edited for clarity and style by Linda Lew.

In winning the bike-rental “arms race,” the number of bikes on the street has become the critical factor. China’s largest bicycle manufacturing hub has become a strategic battleground in the escalating war for users. Any Mobike, ofo or other bike-rental bicycles are very likely to have been manufactured by a factory in Tianjin.

The heyday for Tianjin’s bicycle manufacturing industry was 20 years ago when there were several hundred bicycle factories and the profit on producing a bicycle was over RMB 10. However, in recent years, fierce competition and reduced demand have seen the number of factories decrease to a few dozen and the profit margin on a bicycle has fallen to RMB 1 or 2.

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