Chinese online-to-offline mega app Meituan Dianping is reviving its power bank rental business two years after discontinuing a pilot launch in 2017, according to a report by Chinese media LatePost.
Why it matters: The potential business expansion signals a shift in strategy for Meituan. The company had pledged a more conservative approach to new businesses at the beginning of the year due to financial pressures.
- Power bank rentals first boomed in 2017 and was expected to be the next rental economy super sector after bike rentals. While the hype surrounding bike rentals quickly faded, rental power banks—now a common sight in restaurants and bars—have managed to survive market fluctuations.
- He Shun, chief operating officer of power bank rental firm Ankerbox, told Chinese media in March that all the major players in the sector are booking profits.
- Meituan will challenge market leaders Ankerbox and Xiaodian. However, the food delivery and restaurant recommendation app is thought to stand a good chance at solid market penetration.
Details: Meituan first trialed the power bank rental market in August 2017 by placing a few devices for testing in Qingdao and Shijiazhuang, but it soon called off the project due to “unsatisfactory” testing results, the LatePost report said.
- Power bank rentals were a lower priority for the company, which was juggling multiple other projects at the time.
Context: China’s power bank rental users numbered 196 million in 2018 and is expected to exceed 300 million in 2019, according to data from research institute iiMedia Research.
- Shenzhen-based Ankerbox amassed 107 million users, representing 40.5% of the market share in the first half of this year. Xiaodian and Energy Monster took the second and third place with 23.6% and 20.9% market share in the industry, according to the iiMedia report.
- The rental power bank sector will be worth RMB 330 million in 2020, according to an estimate from research firm Qianzhan Industry Research Institute.
- Meituan Dianping swung into the black during the second quarter, recording RMB 875.8 million ($123.7 million) in profits boosted by the summer high season for food delivery.