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Business

Mobike, Ofo wheel into Japan

China's biggest bike-sharing startups' backers include Alibaba, Tencent

China's Mobike rolls out its bike-sharing service in Japan on Wednesday.

TOKYO -- China's two biggest bicycle-sharing startups are en route to Japan, with Mobike kicking off service Wednesday in the northern city of Sapporo while rival Ofo readies to roll in Tokyo and Osaka next month.

Chinese internet powerhouses have backed the overseas expansion of these businesses. Mobike raised $600 million from a group of investors led by Tencent Holdings in June, while Ofo recently secured $700 million from companies such as Alibaba Group Holding.

Mobike will set up several hundred parking spaces in front of convenience stores, drugstores and other locations in Sapporo, renting out a few thousand bikes in total. Rates will start at 50 yen (46 cents) per half-hour, with official prices to be decided after a trial period. Mobike plans to expand to about 10 locations around Japan, focusing on major cities.

A smartphone app lets users find available bikes on a map and reserve them. Riders scan the QR code on the bike to unlock it, and they can return it to any Mobike-affiliated parking space.

"It's very convenient that I can take the subway to go somewhere, and then bike back on my way home," said a university student in Sapporo. The student, who was test-driving Mobike's signature orange bicycles at an event Tuesday, said he often used bike-sharing services while traveling in China.

Speed bumps 

Bike-sharing has boomed in China since last year, with users drawn by the convenience as well as costs as low as around 1 yuan (15 cents) for half an hour. Pioneers Mobike and Ofo are thought to manage almost 15 million bicycles in total.

But problems have emerged with the rapid expansion of bike-sharing in China, as its initial success spawned a swarm of imitators. The dozens of providers on the mainland have led to oversupply in some regions. The southern city of Guangzhou has banned new bicycles, claiming they disrupt traffic.

Mobike will tailor its Japanese business model to suit the country's concerns about urban blight, said Chris Martin, the startup's head of international expansion. Pursuing scale at any cost could run afoul of Japanese street parking restrictions. Learning from its missteps in China, the venture intends to focus on getting more usage out of each bike, rather than simply flooding the streets with them.

Mobike also operates in the U.K., Singapore and Italy. Ofo will roll out services in Osaka and Tokyo via a tie-up with a SoftBank Group subsidiary.

Japanese companies also seek a slice of the bike-sharing market. Wireless carrier NTT Docomo's Docomo Bike Share began offering its system to businesses and municipalities on a trial basis. It has roughly 5,300 registered bikes nationwide, with usage growing 20-fold over the past four years.

A SoftBank subsidiary has launched support services for bike-sharing businesses. The subsidiary has five partner companies and operates in eight locations.

"I get the double benefit of being able to have a bit of exercise while I commute," a Tokyo office worker said.

Chinese companies are expanding their presence in Japan's service sector. Home-sharing marketplace Tujia, China's answer to Airbnb, entered the Japanese market last year and now boasts a strong following among tourists.

(Nikkei)

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