Amidst signs of a serious cash crunch, ofo claims that its B2B business has made over RMB 100 million in revenue.
In an interview with local media, Shao Yi, the head of ofo’s B2B business division, revealed that “ofo B2B business is going smoothly. As of now, its revenue has passed the RMB 100 million mark. At the same time, ofo’s B2B business in over 100 cities in China has managed to turn profits.”
Ofo’s B2B division was formed 2 months ago, its business ranges from include bike-body ads, in-app ads and the corporate green card (a scheme for companies who want to place their ads in the ofo app).
Shao stressed that people who use ofo are predominantly high-frequency users with inelastic demand. “Tens of thousands of ofo bikes are being ridden around cities, and so O2O ads get more exposure. In addition, ofo user traffic can be directly diverted to advertiser’s online or offline channels. Advertisers value ofo’s integrated O2O marketing resources and user conversion capabilities.”
China’s cash-burning bike rental companies are increasingly looking to profit from advertisement as it is difficult to generate decent revenue purely from rides. ofo started selling ads on its bikes and apps in May with plans to launch custom-designed bikes and the bike-body ads on bike wheels, saddle, and baskets. Yet, monetizing from ads isn’t as smooth as ofo made it out to be. Several regional municipalities including Shanghai and Beijing have issued bans on putting ads on bikes.