Short Essay - Business Model Canvas Analysis of Mobike, A Bike Rental APP

1155089311 HUANG, Lei (Lynsey)

1. Introduction

Mobike is a bike rental APP which first entered China market in 2016. At current stage, Mobike has launched its service at a fast pace in tier 1 cities in China and it is still expanding its business to more cities with great ambition.

Riding Mobike is an economic trip mode because it allows users to rent a bike at a low price of 1 RMB or 0.5 RMB per half hour. Meanwhile, the use of the service is rather convenient. To unlock a bike, all you should do is take out your phone and scan the QR code on the bike. Moreover, after riding, users do not need to park the bike in certain areas with the application of GPS technology helping other users to locate available bikes.

With all these advantages, bike rental service is thriving in the major cities in China. Therefore, more and more players flooded into the market, making the competition increasingly fierce (see Graph 1).

Graph 1. Major players in the bike-sharing market in China (Source: Iresearch)

Nevertheless, Mobike still occupies the dominant position in the market with extremely high penetration rate (see Graph 2). Therefore, Mobike is representative for the analysis of the business model of bike rental service. In the following section, the analysis will be conducted in the framework of business model canvas.

Graph 2. The penetration rate of Mobike from November to December, 2016 (Source: Musertracker)

  

2.1 Customer segments

Confronted with crowded public transportation and severe traffic congestion, citizens living in big cities in mainland China are major customers of bike rental service. Also, considering the low price of bike rental service, commuters who want to reduce their expense on commuting trips are also target customers. Apart from this, since bike riding is a popular kind of sport, people who admire a healthy life style can also be potential customers.

2.2 Value Proposition

As an alternative trip mode, riding a bike can avoid being stuck in traffic congestion and the jostling crowd in public transportation. And it is believed that bikes effectively solve the problem of ‘last 1 kilometer’, which means people can reach the locations which are not well accessible by public transportation. For example, if it takes 20 minutes’ walk from your home to the metro station, riding a bike can save much time and energy. In this sense, riding a bike is a more efficient, comfortable and economic choice to commute, which can also provide office staff with more chance to get physical exercise.

2.3 Channels

The channel types adopted by Mobike are mainly categorized into on-line channels and off-line channels. On-line channels consist of social networking sites (SNSs), portal sites and news sites, Mobike APP and so on. Off-line channels mostly take the form of off-line events. SNSs, portal sites and news sites, and offline events are used to arouse the awareness of potential customers. In terms of evaluation phase, SNSs play the most important role with the effect of word of mouth and it also convinces more customers into purchase with the network effect. And the APP of Mobike is used in the phase of purchase and after sales.

2.4 Customer relationships

According to the brand image and the content posted on its SNSs, Mobike is trying to leave a young and energetic impression on customers. It aims to maintain a peer relationship with the customers. And it applies a combination of self-service and automated services to cut down the expenses on customer service and to improve the efficiency.

2.5 Revenue streams

To start the first Mobike trip, users have to pay 299 RMB as a deposit, and the usage fees could be 0.5 RMB or 1 RMB per half hour depending on the types of bikes. Therefore, the deposits and usage fees constitute the revenue streams of the company.

2.6 Key resources

In order to cut down the maintenance cost, Mobike has developed a special manufacturing technique to improve the durability of the bikes, which could be considered as a kind of intellectual resource. In addition, to maintain the business model, adequate supply of bikes is vital. However, the manufacturing cost of the bikes of Mobike is relatively high and the operation of the company is costly. Therefore, the enormous amount of investment is significant financial resources to Mobike.

2.7 Key activities

The most important job of Mobike is to provide customers with a smooth using experience of bike rental service. To achieve this goal, the company has to guarantee there are adequate supply of usable bikes, clear direction for use, and thoughtful after-sales service.

2.8 Key partnerships

The most valuable partners are bike manufacturers and investors. The cooperation with bike manufacturers considerably reduces the manufacturing cost, and strong relationship with the investors ensures the stability of the capital chain.

2.9 Cost structure

Bike manufacturing cost could be the fixed cost of Mobike and the maintenance cost as well as the operation cost of the company is variable costs.

Reference

Chinanews (2017). 共享单车战争结束？ 摩拜单车市场份额逼近90%. Retrieved Feburary 6, 2017, from http://www.chinanews.com/it/2017/01-18/8127884.shtml

Ireserach (2017). 艾瑞：共享单车 - 月度用户近千万，政策将成主因素. Retrieved Feburary 6, 2017, from http://report.iresearch.cn/content/2017/01/266527.shtml