Meituan to purchase bicycle-sharing startup Mobike for over $3 billion
Category: #world  By Saipriya Iyer  Date: 2018-04-05
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Meituan to purchase bicycle-sharing startup Mobike for over $3 billion

Meituan Dianping, a Chinese firm offering online retail products & services for local consumers, is reportedly planning to purchase Mobike, a bicycle sharing startup, in a deal worth USD 3 billion. Reportedly, the takeover deal values Mobike’s assets at nearly USD 2.7 billion, while assuming its debts at nearly USD 700 million. According to the joint statement issued by Mobike & Meituan, Mobike is likely to function as an independent unit even after its acquisition.

Incidentally, this move is viewed as a strategic step by Tencent, a major investor in both Meituan and Mobike, to maximize its share across the ecommerce sector. The company may have backed the business decision to counter the expansion moves of its rival Alibaba, claim sources. Earlier this month, Alibaba had completely acquired Ele.me, a key business rival of Meituan, at USD 9.5 billion. Both Alibaba & Tencent Holdings are competing to dominate the online payment business through their respective platforms Alipay and WeChat Pay respectively.

Seemingly, a cut-throat competition is being witnessed among these two online retail Chinese giants for leading the online services market, including activities such as offering bikes on rent online and online food delivery services as well as eCommerce activities. In the share bikes service portfolio, Alibaba is the largest investor in Ofo, a bicycle-sharing firm in Beijing and a fierce business rival of Mobike.

Mobike & Ofo have expanded rapidly across the bicycle sharing business by exploring new avenues of the ride-sharing sector. These firms are said to have followed the footsteps of ride-hailing apps such as Uber and Airbnb. Reports state that their bicycles are unlocked through the use of smartphone app.

Currently, the cost of bicycle sharing services are very less and users need to pay only USD 0.15 per hour in China for the bicycle-sharing services. Mobike has claimed that it has over 200 million customers who make over 30 million bicycle trips each day.



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Saipriya Iyer

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Saipriya Iyer

Saipriya Iyer develops content for Market Size Forecasters, Algosonline, and myriad other platforms. A computer engineer by profession, she ventured into the field of writing for the love of playing with words. Having had a previous experience of 3 years under her bel...

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