How about traditional bike companies?
Employment may be up, but sales are down, giving old brands like Flying Pigeon and Forever no choice but to abandon their business models and adapt to the bike sharing revolution.
Flying Pigeon, which dates back to 1936, was one of the biggest bicycle brands in China in the 20th century, before seeing sales hit twice-over as China's economy developed – first by the influx of cars as consumers swapped two wheels for four, and second by the current bike sharing boom.
2016 saw year-on-year bicycle production fall by five percent to 53 million bikes. Manufacturers are now increasingly working with bike sharing companies, with half of Flying Pigeon's orders earlier this year coming from ofo, according to China Daily.
What happens when the boom cools down?
Workers' Daily reported last week that in Beijing, half of bicycle stores closed in the first quarter of the year, with sales down by half. With more manufacturers losing customers and relying on the booming bike sharing industry for orders, brand names like Flying Pigeon – and the 150,000 employed in bicycle manufacturing – are at risk of being hurt if the bike-share bubble ever bursts.
Caixin reports that three shared bicycle firms have already gone out of business this year, and with at least 70 other companies operating, more are expected to throw in the towel.
Yu Yuefeng, managing director of Phoenix, China's oldest bike manufacturer, told the Financial Times that while major bike sharing companies can survive a slowdown in production thanks to heavy financial backing from investors, bike manufacturers which run on already-tight profit margins could face bankruptcy.
With more cities likely to follow suit with Beijing and ban new shared bicycles, along with a cold winter season ahead in north China set to see a drop in users, production could fall sharply in the next few months, providing a major test to some of China's most iconic bicycle brands.
