Critical Review and Comment on Mobike Entering Malaysia

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International Marketing

Individual Assignment

Critical review and comment on Mobike entering Malaysia

Student Name: Siu Hung Nin

Student No. (CityU SCOPE): 53107056

Matriculation No. (ENU): 40297352

Instructor: Dr Olivia Koon

Submission Date: 8 March 2017

Table of content

Company information – Beijing Mobike Technology Co.3

Company Plan - Malaysia 3

The world first station-less bike-sharing system - Mobike 3

Internal Analysis 4
   Strengths…………………………………………………………………………………….4
   Weaknesses………………………………………………………………………………….4

External Analysis 5

Opportunities…………………………………………………………………………………5
   Political – Stability………………………………………………………………………….5
   Political – Taxation………………………………………………………………………….5
   Social Cultural Environment – Internet Usage…………….……………………….……….6
   Economic – Employment status…………………………………………………………….7
   Competitor…………………………………………………………………………………..7

Threats………………………………………………………………………...………………8
   Technological – e-Commerce……………………………………………………………….8
   Economic – Financing………………………………………………………………...…….9

Recommendations and conclusion10

Reference 11

Beijing Mobike technology Co is a relatively new company in China. People usually call it “Mobike” as it is the name of their most successful product, the world first station-less bike-sharing system. Mobike was founded in Beijing in 2015 and have been expanding quickly over these two years. All of the founding team members have lots of working experience on developing O2O business strategy and creating intelligent hardware.

The mission of the company is to use innovative technology to provide an economic, environmental friendly mode of transportation.  The basic idea is to solve the issue of “The last kilometer”. They found the most common reason of not renting a bike as a daily transportation is that potential customers are always struggling with the distance between the rental station and their target location. In terms of this, a user friendly application on smartphone combining with station-less bike rental service should be the best solution of all time.

Company plan - Malaysia

Currently, Mobike maintain their business in China and planning to expand their business in Singapore. Expect the choice Mobike have made, it is suggested that the company can consider bringing their business to another Asia country – Malaysia. An internal and external audit analysis will be made below and some recommendation on the future development.

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Mobike is currently in “ASEAN” – Association of Southeast Asian Nations which is as same as Malaysia.

The world first station-less bike-sharing system - Mobike

Mobike is a station-less bike-sharing system which customers can easily rent and return their bike wherever they wanted to as long as the bike is not parked at a restricted area. The program was first launched in Shanghai in April 2016. Within the next nine months, Mobike has already deployed across 10 cities in China region and became a hot topic among the field of technology.

The market share of the company among bike-sharing system is undoubtedly the highest for now within China. A research by Roland Berger also indicates that the global market for bike sharing offers is expected to be worth up to 5.3 billion euros by 2020 (Roland Berger, 2015). Therefore, Mobike is definitely identified as “Stars” in short term according to BCG Matrix.

Although there are other Chinese firms trying to copy the idea of station-less bike-sharing system, Mobike still have the advantage of owning over 20 patents on their bikes. Even if the competitors are increasing each year, Mobike can still be termed as “Cash Cow” after the growth rate declines in long term.

Internal Analyses

Strengths

Taking about the company image, Mobike is known to be designed with bright orange wheels and thick steel frames. Customers can easily spot and recognize a Mobike from a far post, not to mention it is a bike with GPS which people can locate it on their smartphone application (Mobike, 2017). Therefore, such practice successfully made Mobike very significant and recognizable.

Besides the vision of addressing the crowd urban traffic with their system, Mobike also focused on low rental price so that every income class can participate in their campaign. The fee of renting one is extremely low which only cost 1-Yuan per 30 minutes (Mobike, 2017). With such advantage of offering low rental cost bike to customers and the strong visual statement, the point of selling should be easily adopted to different countries.

As long as Mobike is the world first station-less bike-sharing system, it has bought a great hit among the international bike-sharing market. There are plenty of discussions about the competition Mobike can bring to the existing bike-sharing system market.

Mobike is now expanding aggressively in China and targeting the international market. In January 2017, the company has closed a US$215 million series D funding led by the internet giant Tencent and private equity company Warburg Pincus LLC (South China Morning Post, 2017). With the investment of such well-known firms, the reputation of Mobike increased a lot and it will be easier for it to enter the global market.

Weaknesses

Although Mobike is a really outstanding firm among the startup companies in these two years, they still lack of the experience on expanding the business to other countries. Despite the funding raised from Tencent and Warburg Pincus LLC (Digital News Asia, 2016), Mobike still have to do some more series of funding every time they enter the new market. For example, in 2016, Mobike is planning to enter Singapore in the next two years. Luckily, they have received funding ahead of its launch in Singapore by 2 local companies. However, comparing to Singapore, Malaysia may have more restriction for Mobike to overcome.