For China’s increasingly picky bike renters, ease of access is one of the key determinants when choosing from a rainbow of similar bikes. After all, there’s no user experience to speak of if the service isn’t available. Because of this, speed is everything for bike rental companies as they scramble to stake their claim.
As one of the advocates of this principle, Chinese bike-rental unicorn ofo has been known for its aggressive expansion at home and abroad. The company’s trademark bright yellow bikes flooded the streets almost overnight, but have you ever wondered where these bikes come from and how they are produced?
TechNode got a chance to visit a Flying Pigeon factory in Tianjin, one of the largest bicycle manufacturing hubs in China.
Flying Pigeon is a reputable bike brand in China with over 80 years of history. The company began working with ofo just as the emerging business was taking off and has manufactured over 800,000 bikes for ofo in the four months from December last year to March this year. Its production line for ofo is expected to churn out around 5 million bikes per year, says Huang Shuo, marketing manager of Flying Pigeon.
Not all of the 5 million bikes are produced in Tianjin, according to Huang. “Ofo’s order is featured by cross-regional demand that varies every week. We have regional plants or partner factories across the country to meet ofo’s demand for local production. Of course, all bikes we produce meet the same standards, regardless of factory location.”
“Ofo’s orders account for one-third of our whole production capacity. The rest of our production line include higher-end bikes, sports bikes, and more,” Huang says.
Five million bikes is not a small deal, but that only ranked Flying Pigeon as one of the top-ten bike partners of ofo, according to ofo’s SVP Nan Nan. Apart from Flying Pigeon, the Beijing-based startup also inked a strategic partnership with bike producer Fushida for a 10 million bike per year deal earlier this year.
Ofo’s robust hardware demand underlines a larger market surge in the bike manufacturing industry, boosted by a string of bike-rental services that include ofo, its arch competitor Mobike as well as smaller players such as Bluegogo and HelloBike. It’s safe to say that the bike-rental boom has injected new vigor into flagging bike manufacturing industry.
Although manufacturers are scrambling to raise their production capacity, there’s limited automation and technology in the factories. The components for the bicycles are mostly assembled by manual labor: In the factory we visited, there were 70 to 75 workers on one assembly line.
The market surge may be able to pull in enough hot money to boost an overheated industry in the short term, but they can’t support the sustained development when the market craze cools off.
The bike availability principle that ruled at the beginning of bike-rental boom is losing its charm now when lines of dockless bikes become the cause for mounting pressures on urban management, especially in big cities.
Compared with aiming for higher production capacity, the problems of how to put the right amount of bikes at a place where it is most needed, how to lower the damage rate, and how to repair damaged bikes more efficiently are more pressing problems.
18:20 June 2, 2017: This post was updated to clarify some bike production numbers.