China’s biggest food delivery app buys China’s biggest on-demand bike service

Business & Technology is a Chinese restaurant review website that was founded in 2003, a year before Yelp was started, and four years before the launch of the iPhone. After a merger with China’s dominant group buying website (similar to Groupon), it is now known as Meituan-Dianping. The company’s main product is an app that offers a huge range of location-based services from food delivery to venue booking and car hailing — Bloomberg called it a “super app.”  

The company has been furiously adding features this year in an effort to compete with Didi Chuxing, China’s biggest car-hailing app, which has encroached on Meituan’s territory in food delivery and is also the largest investor in Ofo, one of China’s two major on-demand bicycle companies. Today, Meituan bought Mobike, the other leading on-demand bike company.

  • “Meituan will acquire 100 percent of loss-making Mobike for US$2.7 billion,” the South China Morning Post reports.
  • Meituan has 320 million users, and is “the world’s fourth largest unicorn with a valuation of US$30 billion, behind Xiaomi and above Airbnb,” SCMP notes.
  • Mobike was valued at $3 billion and Ofo at $1 billion in October 2017, per Bloomberg.
  • “Meituan said that acquiring Mobike was another significant step toward building an environment that offers consumers convenience in all aspects of leisure,” according to Sixth Tone.
  • No story about bike sharing in China is complete without noting that Alibaba and Tencent, China’s two largest tech titans, are heavily invested in Ofo and Mobike, respectively. A graphic in the Sixth Tone story (linked above) provides a clear overview of the current landscape of food delivery, ride hailing, and bike sharing in China.
  • For those large investors, the big picture is about data. SCMP says that “bike-sharing companies are…seen by Chinese tech giants as effective tools to promote mobile payments and to collect user data that in theory can be analyzed for consumer patterns.”

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