Ofo Inc (共享單車), a pioneer of China’s bike-sharing boom, considered filing for bankruptcy in what would have been the nation’s biggest start-up failure in years.
Ofo CEO Dai Wei (戴威) on Wednesday laid out the company’s challenges in a letter to employees, from customers seeking deposit refunds to suppliers demanding unpaid bills.
While the 28-year-old weighed bankruptcy after misreading the market, he suggested that such a move was no longer an option.
Dai’s emotional missive capped a horrendous year for a start-up that epitomized the can-do nature of China’s technology scene and raised more than US$2 billion in funding from investors.
Ofo helped spur a trend of dockless bike-sharing in Taipei and as far as Paris.
However, it also came to symbolize the industry’s excesses.
Along with rival Mobike (摩拜單車), Ofo’s canary-yellow bicycles piled up in junkyards across China as dozens of competitors jumped into the fray, fomenting a glut and pricing war that ultimately killed off all but a handful of players.
“In the past half-year, thanks to cash flow and media pressures, we’ve expended effort without reward. It’s especially so after the company failed to raise new funding,” Dai said in a memo shared by a company representative. “I considered, countless times, cutting off all our operational capital to repay customers and suppliers, even breaking up the company and filing for bankruptcy. Then no one will have to bear this enormous burden.”
That would have been a remarkable about-face for a company that clawed its way up from an experimental project for college students to one of China’s most visible start-ups.
Dai, who dropped out of a doctoral program at Peking University, founded Ofo in 2014 with four other students.
Shared bicycles rapidly gained favor among students and commuters tired of inching their way through traffic.
Dai did not elaborate on how Ofo misjudged the market, but the company has said it intends to withdraw from several cities abroad.
Heavy discounts and the need to saturate large cities with available bikes took a toll. At the height of the boom, local manufacturer Shanghai Phoenix disclosed an agreement to supply Ofo with at least 5 million bikes.
That same company in September said that it was suing Ofo for 68 million yuan (US$9.87 million) in unpaid bills.
Long before that, observers had pointed out flaws in the industry model apart from unsustainable discounts. The cycles tend to be easy targets for thieves and vandals, and require a lot of personnel to maintain and redistribute.
For now, Ofo fully intends to soldier on.
In his brief memo, Dai exhorted his workers to tackle the company’s issues head-on, while conceding the immense pressure his start-up is under.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained