Big Two Chinese Bikeshare: Merger in the Offing?
According to reliable sources Ofo & Mobike investors are in early talks to merge, aiming at ending a costly competitive battle and creating a single dominant player in the fast-growing sharing economy. The companies are separately backed by China’s two biggest internet giants -- Alibaba and Tencent -- which have a track record of investing in competing startups and then combining them as a leader emerges to save money.
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These bike-sharing startups are the global pioneers. With Tencent backing Mobike and Alibaba siding with Ofo, the startups have flooded major cities such as Beijing and Shanghai with their trademark orange and yellow bicycles just a few years after their founding.
The bike-sharing boom has boosted demand for bicycles from companies such as Shanghai Phoenix Enterprise Group Co., Zhonglu Co. and Taiwan’s Giant Manufacturing Co. Shanghai Phoenix shares surged in May when the company disclosed an agreement to supply Ofo with at least 5 million bikes.
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