Chinese bike-sharing startup Ofo’s downhill battle worsens. The company is suddenly pulling out of Japan, according to Nikkei Asian Review. The firm has already announced its decision to exit from the Japanese cities of Otsu and Wakayama, signaling the worsening of Ofo’s cash flow problem. Retreat from the remaining Japanese cities is just a matter of time, according to Nikkei.
Ofo had already withdrawn from countries such as Germany, Australia, Israel, and India. It has also scaled back its operations in the US and the UK. Worth highlighting is that Ofo actually considered Japan as one of its core markets.
In an interview with KrASIA, Christopher Hilton, Ofo’s head of communications and public policy for Southeast Asia, talked about how the goal of the global retrenchment was to focus on core markets like Singapore, Hong Kong, Japan, and South Korea in a bid to turn a profit by end-2018. This latest turn of events, in addition to its exit from South Korea, seems to suggest this will be harder to achieve than anticipated.
Singapore’s new licensing scheme that places a limit on the size of bicycle fleets allowed onto the streets might also dampen Ofo’s dominance in the country. Regulatory changes like that can incur higher costs for the firm.
All of these coincide with the financing dilemma that Ofo is facing even as the firm resists acquisition attempts, including offers from China’s ride-hailing giant Didi Chuxing, and Ant Financial. This exit only shows the growing difficulties that Ofo is facing in its fight to stay independent.
We’ve reached out to Ofo for comment.
Editor: Nadine Freischlad
