From the perspective of "user experience", "cost" and "revenue", which one has a better future, Mobike or ofo?

Restore the user usage scenario:

1. Register, log in, pay deposit, and recharge;
2. Actually look for the vehicle or search for the vehicle in the app;
3. Scan the code to unlock;
4. Cycling;
5. Finish returning the car.

1. User Experience Analysis

Shared bicycles = urban vehicle coverage density and regional distribution + vehicle usage experience (unlocking success rate + vehicle damage rate + riding experience + vehicle appearance) + price + entry (APP + mini program + super app).

1. Urban vehicle coverage density and regional distribution

Bicycles are short-distance transportation tools . From the user's perspective, within a certain range, the vehicle coverage density and the rationality of regional distribution are positively correlated with user satisfaction.

This is easy to understand. Let's take a specific scenario as an example: the morning rush hour is the peak time for bicycle use. Assuming there are 5,000 cycling users in Tiantongyuan Community, ofo has deployed 4,000 bicycles in Tiantongyuan and Mobike has deployed 1,000 bicycles. Obviously, 4,000 bicycles can better meet the needs of 5,000 users.

In terms of coverage, when a user goes to an unfamiliar place and wants to use a car, he or she may not be able to find one nearby, which is a great detriment to the user experience.

Delivery and Scheduling

The total number of vehicles in a city is not necessarily better. Before the first deployment, it is necessary to first conduct a city-wide demand survey and then break down the demand into each region and community. At the same time, it is necessary to take into account the future vehicle damage rate and demand growth. The first deployment should try to ensure the coverage density and regional distribution are reasonable.

Taking Beijing as an example, assuming that the survey shows that the demand for bicycles is 500,000 and the vehicle damage rate is 10%, then the upper limit of deployment is 550,000, and the excess will become assets and liabilities.

After the initial launch, the reasonable regional distribution of vehicles needs to be based mainly on market scheduling, supplemented by manual labor. If the total number of vehicles deployed in a city is reasonable, the current regional distribution of vehicles is, in theory, the most consistent with the actual migration path of users. After all, cars follow people when they are available. But if there are special circumstances, such as Jay Chou holding a concert at the Bird's Nest, the number of bicycles near the Bird's Nest will definitely explode in the short term, and manual scheduling will be required at this time.

We often see trucks pulling yellow bikes on the road, probably to manually adjust the distribution of vehicles.

2. Vehicle use experience

The vehicle usage experience is roughly related to four points: unlocking success rate, vehicle damage rate, riding experience, and vehicle appearance.

Mobike bikes are currently basically equipped with smart locks, which use 2G+Bluetooth communication, and the average unlocking time is less than 3 seconds; ofo currently uses a combination of mechanical locks and smart locks, with the former accounting for the majority. The smart lock communication uses 2G+Bluetooth, and the average unlocking time takes about 5 seconds.

The Internet of Things has developed rapidly recently. The two companies have cooperated with China Telecom and Huawei to pilot NB-loT narrowband Internet of Things smart locks, making communication more efficient and cost-effective.

In terms of vehicle quality, Mobike is superior to Ofo, especially the first generation of Mobike:

The entire body of Mobike, including the wheels, is made of genuine aluminum alloy material, and the cost of a single bike is over 2,000 yuan; the cost of a single Ofobi bike is around 200-300 yuan, and cost and quality are usually positively correlated. Naturally, the damage rate of Ofobi bikes is higher than that of Mobike. From the user experience point of view, Mobike is definitely better than Ofo in this regard (as a senior user, I have a deep understanding of this. I was in a hurry to go to work early in the morning and scanned 3 Ofo bikes. The first two either had broken locks or had loose chains).

In terms of riding experience, the first generation of Mobike was known as the "human generator" and was widely criticized by users. Fortunately, the product was improved in time and the subsequent bicycles launched were much lighter. As the ofobi has a mechanical lock and does not require power generation, the bicycles launched by ofobi were relatively light from the beginning.

In terms of appearance, Mobike is indeed carefully designed. I personally think it is the most beautiful one on the market. However, users mostly use the bikes as a short-distance means of transportation and do not have very high requirements for the appearance. Besides, other companies' bikes are not that bad.

3. Price

For businesses: The average price of Ofo bikes is between 200 and 300 yuan, while the price of the first generation of Mobikes is over 2,000 yuan. In terms of cost and supply chain, Ofo has an absolute advantage in terms of vehicle coverage, while Mobike faces certain financial pressure to achieve the same production volume. Mobike must have taken this into consideration and launched the second generation of Mobike, with a bicycle costing around 300 yuan.

"Quality" and "cost" are usually positively correlated. The low price of the shared bikes also has a certain strategy. In addition to affecting the user experience, "price" and "quality" actually bring about a game between the company's "direct friction" and "indirect friction".

In the short term, the high price of Mobike will increase costs and direct friction. In the long term, the operating costs will decrease (maintenance, bike search costs, etc.), and the lifespan of the bikes will also increase, reducing indirect friction. The opposite is true for Ofo bikes. In the short term, direct friction will decrease, but in the long term, indirect friction will increase. In addition, there is a hidden danger in the long term: once a bike reaches its scrap age, the recycling of those that do not have a positioning function installed will be a big problem. In the future, the proportion of damaged Ofo bikes in cities will increase significantly, which will definitely cause great damage to the user experience.

For users: Price is always the focus of users. Companies need to make profits, and costs will eventually be transferred to consumers in the form of prices. The price of Mobike's first generation is 2 yuan per hour, while the price of Ofobi is 1 yuan per hour. Ofobi has the advantage in terms of price.

4. Entrance

• Mobike: User app + mini program + WeChat
• Ofo: User app + public account + Alipay + Baidu map + Didi

The bicycle itself is an extremely mature product. Even if it is equipped with a smart lock, it is not easy to form product and technological barriers. Judging from the urban vehicle coverage density, regional distribution, and price over a period of time, as long as the funds and management are not out of order, all companies will follow up, and eventually the gap will be gradually "leveled".

But the key point is: there is a time difference in the "leveling" process. During this time difference, the barriers that will eventually be formed will be when "urban vehicle coverage density is sufficient", "regional distribution is reasonable", "market prices are stable" and "user experience is good". Whoever can gain more users at the online "entrance" (only one entrance, one bicycle, no need to pay more deposits, or download more apps, can well meet the needs of short-distance travel, which is undoubtedly the best experience for users), form an absolute user scale and build barriers.

2. Cost Analysis

1. Urban parking space coverage density and regional distribution

Data source : http://tech.qq.com/a/20170311/004133.htm

Mobike has more than 100 million registered users, with more than 25 million people riding every day. The first generation of Mobike costs 2,000 yuan, and it is estimated that 500,000 bikes will be put into use. The second generation of Mobike costs 300 yuan, and the number of bikes put into use = 17.45 million - 500,000 = 16.95 million.

The total cost of deploying a single bike = 2,000 yuan x 500,000 yuan + 300 yuan x 16.95 million yuan = 6.09 billion yuan.

Ofo has more than 100 million registered users, 62.72 million people ride it every day, the cost of a bicycle is 200 yuan, and the number of bicycles in use is 17.45 million;

The total cost of deploying a single bike = 200 × 17.45 million = 3.49 billion.

The total number of Ofo bikes is 2.5 times that of Mobike, and the labor dispatching costs are roughly 2.5 times that of Mobike.

It can be seen that Mobike’s bicycle deployment cost is nearly twice that of Ofo.

2. Vehicle maintenance and operating costs

There are 17.45 million yellow bikes in total, and the damage rate of the vehicles is over 20%, so the number of damaged vehicles = 17.45 million x 20% = 3.49 million.

There are 17.45 million Mobikes in total, and the damage rate of the vehicles is about 10%. The number of damaged vehicles = 17.45 million x 10% = 1.75 million;

The cost of finding a shared bike without positioning is much higher than that of a Mobike, and it is not certain whether you can find it.

3. Price

In order to have a competitive advantage in terms of pricing, in addition to the costs of their own products and operations, they also need strong financing capabilities. Both companies have currently raised more than US$600 million in financing.

1. Direct rental income

Mobike Generation 1: Price = 2 yuan/hour Number = 500,000 If the time is less than 30 minutes, it will be counted as 30 minutes

Mobike II: Price = 1 yuan/hour Quantity = 16.95 million Minutes less than 30 minutes will be counted as 30 minutes

Short trips, with each ride lasting less than 30 minutes on average

On average, it is used more than 4 times a day;

Overall vehicle utilization rate: 61.9%

Single-day rental income = unit price x time per ride x number of rides per day x number of Mobike 1 + unit price x time per ride number of rides per day x number of Mobike 2 = 2 yuan/hour x 0.5 hour x 4 rides x 500,000 x 61.9% + 1 yuan/hour x 0.5 hour x 4 rides x 16.95 million x 61.9% = 22.2221 million

The cost of the first generation of Mobike is 2,000 yuan. The investment payback period = 2,000 yuan / 2 yuan / hour x 0.5 hours x 4 times = 16.4 months

The cost of Mobike 2 is 300 yuan. The payback period is 300 yuan/1 yuan/hour x 0.5 hours x 4 times = 5 months.

The scrapping cycle of a bicycle is three years. It takes 16.4 months for the first generation of Mobike to recover the cost, and it takes 5 months for the second generation of Mobike to recover the cost. The investment payback period is relatively short.

Let’s take a look at the little yellow car:

Price of shared bikes = 1 yuan per hour Number of shared bikes = 17.45 million If less than 30 minutes is counted as 30 minutes

Short trips, with each ride lasting less than 30 minutes on average

On average, it is used more than 4 times a day;

The overall vehicle utilization rate is 52.1%.

Single-day rental income = unit price x time per time x number of times per day x quantity = 1 yuan/hour x 0.5 hours x 4 times x 17.45 million x 52.1% = 18.1829 million

The cost of the small yellow car is 200 yuan. The investment payback period = 200 yuan / 1 yuan / hour x 0.5 hours x 4 times = 3.3 months

The scrapping cycle of a bicycle is three years, but ofo can recover its costs in just 3.3 months, and its investment payback period is shorter than that of Mobike.

2. Financial benefits

iResearch APP Index

Generally, user deposits will not be withdrawn in the short term. As of June 2017, Mobike had 59.25 million monthly active users and ofo had 64.64 million monthly active users. If the companies have control over the deposits, assuming they invest in financial products with an annualized interest rate of 6%, it will be a very substantial income in the future.

• Mobike = 59.25 million x 299 yuan x 6% = 1.06294 billion yuan
• Ofo = 64.64 million x 99 yuan x 6% = 383.96 million yuan

3. Advertising revenue

Mobike and ofo both have more than 100 million registered users, tens of millions of active users, and the total number of vehicles to be deployed offline in the future will also be more than 10 million. From the perspective of traffic monetization, both online and offline have the ability to monetize advertising.

Currently, both companies are only making shallow attempts in advertising monetization, and most of them are just simple attempts in online QR code scanning to unlock, startup page, online vehicle location, etc. After all, tool products still focus more on user experience, and are not suitable for large-scale advertising monetization during the user growth stage.

IV. Conclusion

At present, ofo has advantages in vehicle coverage, cost and user activity. In the long run, it also faces rising maintenance and operating costs, and vehicle recycling is also a big problem. Although Mobike currently has disadvantages in terms of user volume and vehicle deployment, these will be gradually eliminated over time, which is a relatively healthy growth.

Shared bicycles have obvious urban attributes and are only scalable in a single city. What companies need to do in the future is to seize cities as quickly as possible and quickly form scale. In the end, it is likely that different companies will divide up the market in different cities, and it is unlikely that one company will dominate the country.

The entrance and vehicle coverage density, regional distribution, price, and vehicle usage experience have a mutually reinforcing relationship. The entrance will eventually form an absolute user scale and build barriers.