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Japanese unicorn Mercari charging into bike-sharing

Flea market app operator pedals into the real world

Mercari announced the Merchari bike-sharing service in Tokyo on Feb. 13. (Photo by Keiichiro Sato)

TOKYO -- Mercari, whose popular flea market app made it Japan's first unicorn, is set to branch out into the brick-and-mortar sphere with a new bike-sharing service. 

The Tokyo-based startup is included in "The Global Unicorn Club," venture capital database CB Insights' list of private companies valued at more than $1 billion. On Tuesday, Mercari said it will release a mobile app on Feb. 27 to launch the bike-sharing service in the southwestern Japanese city of Fukuoka. A fleet of 400 bicycles will be available.

Riders will use the app to check where and how many bikes are available, unlock one by scanning a QR code under the saddle, and pay 4 yen (4 cents) a minute with a registered credit card or through other means.

"We want people to use Mercari in the real world, too," said Ryosuke Matsumoto, an executive officer, noting that the bike service, called Merchari, is the company's first offline foray.

Founded in 2013, Mercari has thrived by offering an online marketplace where consumers can sell and buy secondhand goods. It filed for an initial public offering last year and is expected to go public in June, in one of the country's most-anticipated IPOs of 2018.

For Merchari, the company has lined up 13 partners, including the APA Hotel operator, to secure 50 stations to kick-start the service. It plans to increase the bike fleet to 2,000 as early as summer and gradually expand service areas.

Customer involvement is one unique feature. "We will encourage consumer participation in managing the service" and ease the burden on the company, said Gai Inoue, who oversees the business.

Reward points will be given out for bringing an abandoned bike to a designated spot or notifying the company of the need for repairs, for instance. Providing space for a station would be another way to earn points. Points could be used for shopping on the flea market app or exchanged for goods.

And to insure against accidents, the company will work with Sompo Japan Nipponkoa Insurance to provide coverage of up to 200 million yen.

Bikes will be tracked via GPS to collect such data as where and how long they are used. The company will consider utilizing analyses of such data to launch other services, such as car-sharing.

Seven-Eleven Japan is working with SoftBank Group to offer 5,000 bikes at 1,000 convenience stores by the end of fiscal 2018. Chat app provider Line is getting into the business in the first half of 2018 by collaborating with China's Beijing Mobike Technology, which operates in more than 200 cities worldwide. The Japanese company may award points that can be used in games and to buy stickers for the chat app. Mobile carrier NTT Docomo is in the business as well.

In terms of scale, Mercari's new service may pale in comparison to those of the rivals. But the company sees potential in tapping customers of the flea market app, whose downloads have reached 60 million in Japan. Boosting customer satisfaction by involving users in service management and in other ways will be key to success.

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