Group Discussion Week4_Group 10

 Hello Shared Bike

Blue Ocean Strategy

• Eliminate: eliminates the users’ inconvenience and tiredness during short-distance commutes. Hello Shared Bike has significantly alleviated the inconvenience and fatigue associated with short to medium-distance commutes, particularly for trips like the distance between a subway station and one’s destination. In the daily life of large urban environments, public transportation options such as subways and buses are widely used, but commuters often face the challenge of walking considerable distances to connect between transit stops. For residents in sprawling metropolitan areas, this can be both time-consuming and exhausting. Hello Shared Bike addresses this issue by offering a convenient and accessible means of transportation for short commutes. It enables users to easily access bikes for their “last-mile” trips, making the overall commuting process more efficient and less physically demanding.

• Reduce: Hello Shared Bike reduces users' spending on private bicycles and lowers commuting costs. For urban dwellers, purchasing and maintaining a personal bicycle can cost at least ¥1000, depending on the model and upkeep. In comparison, accessing a shared bike for as little as ¥2 to ¥5 per ride is highly cost-effective. Additionally, by subscribing to membership plans, such as monthly packages for around ¥20 to ¥50 or annual subscriptions ranging from ¥100 to ¥300, users can significantly reduce their per-ride expenses while enhancing their commuting experience. This makes shared bikes an attractive solution for minimizing daily transportation costs in bustling urban environments.

• Raise: Hello Shared Bike Invested significant human resources to collect and distribute shared bicycles, raising job opportunities. According to Hello Bike's operational process, the company is required to regularly test whether the bikes in the market are functioning in a good condition. This process involves collecting the bikes by manpower, and then putting them back on the market (i.e., on the roadside) after being inspected and serviced by the system. Both collection and delivery require a large number of people to operate, so Hello Bike also helps more people to find a job.

• Create: Hello Shared Bike created a new business model of the sharing economy, making bicycles more accessible to more citizens. In the past, due to the inconvenience of placing private bicycles when traveling (which may lead to theft), people preferred to choose cars, buses and other motorized vehicles with high carbon emissions, which also caused a lot of environmental pollution. However, with the appearance of Hello Bike, leaving the bike is no longer a concern, as people can start and finish their rides anytime and anywhere without worrying about theft. At the same time, it also encourages people to develop the habit of low-carbon transportation further, which in turn protects the environment.

Porter’s 5 Forces:

• Buyer: There is a large number of consumers in cities with short-distance commuting needs, and the cost is significantly lower compared to other commuting options like Didi. Hello Shared Bike targeted second and third-tier cities at the beginning of its creation. The market demand in the second and third-tier cities is very strong, the user's demand for shared bicycles is not satisfied, so Hello timely entry. The results proved that in the second and third-tier cities the user growth rate is very fast. At the same time, Hello has not given up the first-tier cities, but the logic of placement is different compared to other businesses, targeting first of all the user demand, but not enough bicycle coverage area.

• Supplier: Yongqi Bicycle (Ming Cycle), the supplier of Hello Bike, is one of the major cycling product manufacturers in China, with its main products including bicycles, electrically-assisted bicycles, scooters and shared bicycles. When it comes to cycling products, Hello has chosen relatively high-cost smart bikes rather than cheap bikes that are quickly manufactured. This is because the smart cycles can access data as well as information on operation and maintenance needs, including monitoring the vital signs of the vehicle, the user's riding data, and urban spatial geographic data. Meanwhile, through cooperation with Alipay Zhima Credit, Hello Bike has implemented nationwide Zhima Credit deposit-free riding since 2018, and the registered users of Hello Bike have increased by 70% in two months.

• New Entry: Entering the shared bike industry involves significant upfront investments in infrastructure, including the production and deployment of bicycles, as well as establishing collection and return points. Additionally, companies must invest in technology for bicycle tracking, maintenance systems, and integration with mobile payment platforms. Government regulations and policies favoring eco-friendly transportation create opportunities but also introduce challenges in complying with urban planning and safety standards. The high initial cost and operational complexity make it difficult for new entrants to scale quickly, serving as a barrier to entry while rewarding companies that can manage these demands effectively.
  
  
• Substitution: Public transportation can be difficult, and Didi rides are expensive. The pricing is more affordable compared to other commuting methods like Didi and the public bus system. Buses and subways, as alternatives to bike-sharing, can provide greater volume and punctuality, but there may be long wait times, rush hour congestion, and inconveniences at specific times and routes. While private cars offer privacy and flexibility, they are expensive and can face parking challenges in central urban areas. Walking is a healthy and environmentally friendly way to travel, but it is not suitable for long-distance travel and is more restricted by weather conditions. Taxis and ride-hailing offer door-to-door services, but prices are higher and it may be difficult to hail a ride during peak hours or in remote areas. Although the use of private bicycles or electric bicycles is flexible, it requires personal investment in purchase and maintenance costs, while facing parking and anti-theft problems.
  
  
• Rivalry: Hello Bike's main competitors include Meituan Bike , and Qingju Bike.

(1) Product Quality: Hello Bike uses sturdy and durable materials for its bikes, equipped with smart locks and GPS tracking to enhance user experience and safety, while also ensuring riding comfort and convenience. Meituan Bike boasts high-quality bikes and advanced smart lock technology. Compared to Hello Bike and Meituan Bike, Qingju Bike might have a slightly slower pace in updating its bike fleet in certain regions.

(2) Market Positioning and Strategy: Hello Bike initially focused more on expanding into second- and third-tier cities, while Meituan Bike and Qingju Bike have stronger presences in first-tier cities and key second-tier cities. 

(3) Brand Loyalty: Meituan and Qingju have a smaller scale and have entered the market later than Hello, so they may find it difficult to compete for customer loyalty and brand recognition with Hello.