WITH the upsurge in app-based bikes in large Chinese cities, the traditional manufacturing industries concerning bikes have revived overnight.

    An in-depth article recently published by Shenzhen Evening News depicted how the manufacturing industries in Shenzhen have been revitalized while small factories have struggled to survive under the coming “era of app-based bikes.”

    Revitalized bike manufacturers

    Komax is a bike manufacturer in Shenzhen. The company delivered its first batch of app-based bikes for ofo, one of the most active online bike companies, Feb. 24, symbolizing a meaningful step by the manufacturer towards the trend of joining the mode of Internet+bikes.

    Workers with Komax have been busy working along the assembly lines at a factory in Guangming New Area since their employer began working in cooperation with ofo. The bikes assembled by them are to be sent to Dongguan, a neighboring city, and put into use there.

    The numbers of bikes and the bike coverage rate in a city are two key factors for bike companies to win over users at the beginning stages of promoting app-based bikes, resulting in bike manufactures becoming a key player in occupying markets.

    At the beginning of the app-based bike trend, Tianjin in North China was taking the majority orders from online bike companies. However, since more bikes were needed to be put into different cities all around the nation, conventional bike manufactures in South China gradually began to receive orders from the bike companies and Shenzhen was one of the cities to join the battle.

    App-based bike companies have followed one another in rolling out annual plans to place millions of bikes in Chinese metropolises since the beginning of 2017.

    Following a monthlong negotiation, ofo and Komax came to an agreement on an initial order of 200,000 bikes at the beginning of this year. Xue Jiaming, the chairman of the board with Komax, said that ofo had specifically emphasized two requirements for manufacturing the bikes: quality and production speed.

    The large demand of app-based bikes is rapidly revitalizing bike industries including manufacturing, supplying, employment and other fields.

    Before receiving ofo’s order, Komax was a traditional manufacturer of mountain bikes. There was only one production line in its factory with a monthly production amount of around 5,000 bikes. But Komax’s production amount has since been augmented by 10 times following its deal with ofo.

    Xue noticed the rapid changes in the market and he adapted without much hesitation. He enlarged the factories, increased production lines, bought more machines and recruited more workers in a rather short period of time.

    To recruit enough experienced workers was a big challenge for Xue and his company. In response to the challenge, the director of production with Komax brought in his former colleagues and invited them to join his team. With the addition of these six senior employees they began to train new workers.

    Suppliers of bike accessories also benefit from the recent bike trend. A bike accessory company in Shenzhen known as Yibotong announced that its orders had doubled since the second half of 2016.

    Soon Yibotong began to struggle to meet the rapid increase in orders and the bike accessory supplier was forced to expand the factory and recruit over 100 new employees. The company even had to turn down some of the orders that kept coming in.

    Return of ‘Bicycle Kingdom’

    China was known as the Bicycle Kingdom in the 1980s when bikes played a vital role in Chinese people’s daily lives as a major means of transportation. It was calculated that China had almost 500 million bikes at the time.

    However, the bike industries were devastated at the beginning of the 1990s when automobiles became popular. Gradually, riding bikes became a leisure activity and sport instead of a major means of transportation.

    It wasn’t until last year that riding bikes had become trendy again with the surge in app-based bikes. The latest data shows that over 2 million users ride app-based bikes everyday in Shenzhen, making app-based bikes one of the major forms of public transportations now.

    App-based bikes belonging to various companies like ofo, Mobike, Bluegogo and others can be seen at every corner of major Chinese cities now, gaining popularity among residents who can ride, instead of walk, for one to three kilometers between Metro and bus stations and their destinations.

    From the emergence of the first batch of app-based bikes to the status-quo where bikes were used and placed everywhere near stops and exits of public transportation, China has once again become a “Bicycle Kingdom” in only a few months’ time.

    Sideliners and worries

    Under such booming circumstances, every unit of the bike chain wants to share a piece of the pie. Traditional Chinese bike brands and manufactures like Flying Pigeon, Phoenix Bicycle and Shenzhen xds have also joined in on the trend by working with app-based bike companies.

    However, on the other side of the table, smaller bike factories are now in a quandary where orders of bikes are shrinking drastically, while bike production costs increase.

    Liu Gui had fallen into disappointment and confusion for months since the app-based bike trend hit Shenzhen last year. He is an owner of a small bike manufacturer in Bao’an District. His business has dropped sharply since November last year.

    Liu founded his own bike factory in 2011, after working in the bike industry for over 20 years, but the recent drop in orders has made him ponder the status-quo. Before the appearance of app-based bikes, Liu’s factory would receive orders of around 7,000 bikes per month, but the number has dropped to only 4,000.

    While the orders become less, the cost of making bikes is increasing as the suppliers of bike accessories have increased prices to match rising demand.

    “The suppliers now hardly visit small-sized factories like us, they are busy serving app-based bikes,” said Liu. “Meanwhile, less people want to buy their own bikes since they can find a bike just a few steps away from them.”

    There are over 10 small bike factories in Gongming New Area. Most of them are sideliners that have chosen not to take the risk of joining the trend, but will wait to see how the bike industry develops under the new circumstances. For now, these factories are considering other solutions to boost sales like, for instance, selling bikes in cities where there are still no app-based bikes.

    The city’s bike industry association disclosed earlier that at least 40 out of over 150 bike factories and suppliers in Shenzhen have participated in the app-based bike industry so far.

    The battles among almost 20 various app-based bike companies are taking place and even the companies themselves are looking for business models to help manage profits. As well, there are still some urgent problems needing to be solved such as safety, parking and bike maintenance

    Wang Yiping, the chief secretary general of the association said that it is still too early to have a final evaluation on app-based bikes. It will take time for both app-based bike companies and conventional bike manufactures as well as suppliers to explore the future of the bike industry. (Zhang Qian)