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ofo partners with nine online lenders amid cash strain
In a bid to ease its cash strain, Chinese bike rental firm ofo has entered into partnerships with nine online loan platforms, allowing them to acquire more users by listing their services within its app.
The company has been setting ups deals with lenders including Wanda Puhui, Xiaoheiyu, Daishangqian, and Xiaobai Laihua since the summer. As part of its agreements, the bike rental firm has granted these platforms access to its users by displaying promotional content within the app’s “Wallet.”
Partnerships with online loan platforms are a double-edged sword for the firm. While they bring in much-needed cash, the tie-ups also bring trouble for endorsing players in the country’s online lending sector, which has a tainted reputation for scams and fraud.
Last month, the company drew criticism for urging its users to transfer their existing deposits to P2P platform PPmoney. The pair then removed the promotional offer, adding that it was a typical market activity and that there was no obligation for users to invest.
ofo reportedly inked the recent deals at 10% to 20% below the going price for acquiring new users, according to industry insiders.
In its early days, ofo was cautious about monetization moves that could hurt user experience. However, it was forced to make compromises as its cash pressure intensified in its fight for independent development.
Its first monetization attempts came in May 2018, when it started selling ads on its bikes and in apps. It then launched a news aggregation channel for future monetization possibilities in June, adding five-second short video ads to its main app in August.
ofo’s image has itself been tainted since the beginning of the year. The company has been taken to court by suppliers for unpaid debts, pulled out of international markets, and moved its headquarters in Beijing amid rumors of an acquisition by ride-hailing firm Didi.