Bike-sharing brands need better differentiation

Sep. 19, 2017
  • Reportage

Source: Campaign Asia-Pacific
Writer: David Blecken, Campaign Japan

The rush to be present in a rapidly growing industry means few companies have paused to consider what they stand for.

Japan may have failed to embrace Uber, but ride-sharing on two wheels looks a lot more promising. In the past month, two bike-sharing operators announced plans to enter the Japan market, despite its first-rate transport systems and a well-established ownership-based cycling culture.

Beijing-based Ofo and Merchari (‘chari’ being a slang word for bicycle in Japan), a venture by Mercari, a Japanese online marketplace, will enter into direct competition with Docomo Bike Share, which has been experimenting with the service for several years. Mobike, another Chinese company, also established a presence in two regions in Japan this year. Transactions on Docomo’s service topped 2 million in 2016.

The sector is already booming in China, where there are more than 25 providers and around 30 million users, according to Xu Bao, a senior researcher at the Hakuhodo Institute of Life and Living in Shanghai. In this year’s second quarter, revenue approached RMB 3.9 billion (US$499 million) according to iResearch—four times that of the first quarter. Ofo (funded by Alibaba) and Mobike (funded by Tencent) dominate the market with 52 percent and 41 percent share, respectively. Both are also present in Singapore, where they compete with Obike, a homegrown service.

If you’re feeling those brand names all roll into one, you’re not alone. In fact, at this stage, there appears to be very little at all that distinguishes one service from another. “They all come across as very similar,” says Arvind Sethumadhavan, regional chief innovation officer at Dentsu Aegis Network, who notes that even the colour schemes of Mobike and Obike are hard to tell apart. He puts it down to the fact that it’s still a nascent industry, but suggests that with the market getting more crowded, it’s time the various players take branding more seriously.

“One way to stand out could be looking at a wider picture of what urban mobility can be and how the brand can help people and cities get there.”

Marketing efforts at the moment are mostly explanatory and acquisition- and promotion-driven, says Christer Eriksson, regional planning director of R/GA, who is also a user. That is in contrast to brands like Citi Bike in the US, which benefits from Leonardo DiCaprio’s endorsement and has sponsored major sporting and entertainment events.

But Eriksson says Ofo is the most “international” in its approach and tone outside China. In Japan, the company is currently looking for a marketing director. It has the support of SoftBank, which is likely to make it a lot more credible than if it were acting independently. A core premise is ease of use, which will help it compete with Docomo’s rather convoluted sign-up process. Another notable difference is that it’s dockless, rather than having fixed parking spots.

That is good and bad. Fixed stations are an effective means of branding, notes Joanne Hoe, a planner at Hakuhodo Singapore. And while dockless bikes give riders more freedom, they also have an image problem in Singapore and China, where people have complained that bikes dumped at random (and sometimes in large piles) sully the environment.

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