Is Mobike launching red envelope bikes for smart dispatch? I'm afraid this is the real purpose.

Mobike officials, media and major public accounts are all saying that Mobike’s red envelope bikes are designed to achieve intelligent dispatch. Do you believe it? If you take it seriously, you will really lose. The real purpose of Mobike’s red envelope car is not this. This article will try to analyze the real intention behind Mobike’s red envelope car.

(The article is a bit long. If you are too lazy to read the text, you can go directly to the end to read the mind map of the article. I hope you can gain something from it.)

External and internal troubles: multi-prisoner dilemma & one-person dilemma

Before analyzing Mobike’s red envelope bike operation strategy, let’s first look at the stage the entire shared bicycle industry is in, the difficulties it faces, and the difficulties Mobike itself faces. In this article "Five major dilemmas facing shared bicycles today", I elaborated on the five major dilemmas facing the current shared bicycle industry:

1. Intensified competition in the industry;
2. It is difficult to cultivate user loyalty;
3. The policies of local governments are still unclear;
4. The overall operating costs remain high;
5. There is no clear profit model yet.

The most obvious feeling after the Spring Festival is the "free upgrade" activities launched by various shared bicycles, from free days to free weeks to free months, and even Bluegogo has launched a "free half-year card", which makes the onlookers very happy. However, this series of "free upgrade" activities is undoubtedly a prisoner's dilemma for shared bicycles. They all want to jump out of this embarrassing situation, while at the same time want to increase market share.

At the same time, Mobike has its own unique troubles:

1. Disadvantages of low operating costs

Because Mobike adopts a low operating cost strategy, it reduces vehicle maintenance costs and extends vehicle service cycles by developing durable and theft-proof bicycles - that is, it indirectly reduces the operating costs of the entire life cycle of the bicycle, even at the expense of the riding experience, while also bringing higher bicycle costs (the cost of a bicycle is not just the cost of the bicycle, but also the research and development costs). In addition, as the number of vehicles put into use increases, the workload and costs of vehicle dispatching also increase exponentially, which is the high overall operating costs of the shared bicycle industry as mentioned above.

2. Weaknesses of the high deposit model

Among the current shared bicycles, Mobike has the highest deposit fee, which is as high as ￥299.00. In comparison, ofo and Bluegogo only charge ￥99.00. Recently, ofo, Bluegogo and other shared bicycles have even teamed up with Sesame Credit , allowing users to ride for free without a deposit. This is tantamount to cutting off the source of Mobike's financial support. Other shared bicycles are not only easy to ride but also require no deposit or have a low deposit, which is bound to lead to users collectively "running away with the money."

Shared bikes join hands with Sesame Credit to offer free deposit

Among all the difficulties, the biggest one for Mobike or any other shared bicycle company at this stage is the exodus of users. Once users exodus collectively, daily active users, monthly active users, usage time and other related indicators will all decline. If they all decline, not only will the market share be lost, but the next round of financing will be even more impossible. What's more, Mobike has shown strong signs of financial profitability, namely, it forms a huge pool of funds by absorbing user deposits, and then cashes out through the huge pool of funds. Although it has now signed a relevant agreement with China Merchants Bank, and China Merchants Bank will hold custody of user deposits, no one has seen the details of the relevant agreement, and the government has no relevant supervision, so who knows how the custody is specifically carried out. Therefore, the outflow of users with money has a huge impact on Mobike. Mobike has clung to WeChat and provided various conveniences, but it just doesn’t want to join the deposit-free riding model of ofo.

What are the features of Mobike’s red envelope bikes?

The author spent several hours "treasure hunting" to find some tricks and summarized the following characteristics of the red envelope car:

1. Zombie cars in the city black hole

Just like the text in the picture below, many red envelope bikes are parked in the city black hole areas of shared bicycles - in corners such as the handshake buildings in urban villages. It is really difficult to find them. On the one hand, the terrain and roads in the city black holes are complex and winding. On the other hand, the GPS signals in these city black holes are generally weak. It takes about 10 minutes to find the red envelope bikes in these areas. After finding these bikes, you often need to take out a tissue to wipe off the dust on the body of the bike. This means that the bikes have not been ridden for a long time. Since they are hard to find, who would go to these places to find a bike to ride?

2. Faulty vehicle

The location of the red envelope bike is easy to find, and the condition of the bike is also good, but I just can't ride away after scanning the code . I watch the progress bar go from 1% to 100%, but I can't hear the "click" sound of successful unlocking. In other words, the bike is faulty, and shared bikes that use smart locks will have the problem of not being able to unlock the bike by scanning the code. There is also the situation where the bike has been damaged, for example, the pedals, seat, etc. are damaged, and it is impossible to scan the code and ride away. If I find the faulty Red Packet bike, I will take the initiative to report the fault.

3. The “privatized” Mobike

This is the most frustrating thing. After turning around many times, I finally see the bike right in front of me, but I can't reach it or I can't ride it away even after scanning the code and unlocking it. The former case is that the red envelope bike is in someone else's yard or gated community and I can't get in. The latter case is that the red envelope bike has been privately locked and I can't ride it away even after scanning the code successfully.

4. Where bicycles gather

This is not difficult to understand. The original purpose of launching the red envelope car was to solve the scheduling problem, and it is also hoped to alleviate the tidal effect. For example, during the morning rush hour, the subway entrance is full of shared bicycles, while there are almost no bicycles at the entrance of the community.

At the end of 2016, Wang Xiaofeng (Mobike CEO) said in an interview: "I am not worried about offline operations. I can let users ride the bikes to designated places for me."

However, more often than not, as long as you open the Mobike app, there will be a Mobike red envelope bike not far away from you. These red envelope bikes do not have any of the four characteristics. This is related to the main purpose of Mobike's red envelope bikes. I'll keep you in suspense for now and talk about it later.

What benefits will Mobike get from users riding Mobike’s red envelope bikes?

The picture below is the official red envelope strategy

From this guide, we can see that users must first follow the map to find the red envelope car , and secondly, after unlocking the red envelope car , the effective riding time must exceed 10 minutes . After the ride, they can get a random cash red envelope.

Combined with the previous analysis, it is easy to infer the benefits of users riding Mobike red envelope bikes:

1. Rescue the zombie cars in the urban black hole and alleviate the tidal effect, improve the vehicle recycling rate and reduce the workload of vehicle operation

The foreseeable basic business model of shared bicycles is the riding fee of the vehicles. Moreover, shared bicycle companies now hope that their bicycles can be ridden by more people, while the vehicles in the city's black hole are parked there gathering dust and cannot be effectively utilized. By turning them into red envelope bikes, Mobike encourages users to take the initiative to spend time and energy to rescue these bikes and put them back into use. This increases the recycling rate of the bikes and reduces the pressure on the vehicle operation team. Finding and moving the bikes is really time-consuming, and the reverse tidal effect alone requires a lot of manpower.

2. Report the faulty vehicle + "privatization" of Mobike to facilitate follow-up by the subsequent vehicle operation team

By marking red envelope bikes, users can discover more faulty bikes and "privatized" bikes, which can help the vehicle operation team more accurately detect and solve vehicle problems, improve the efficiency of the operation team and the availability of Mobike bikes. The most worrying thing is that a user urgently needs a bike and walks hundreds of meters to find a bike, only to discover that it is faulty or has been privatized.

3. You must ride for 10 minutes to get a red envelope, and make a mobile Mobike advertisement

Compared with the user conversion effect brought by spending money on advertising and spending money on advertising, it is far less good than the conversion effect brought by everyone around you riding Mobike.

4. High-value red envelopes stimulate users to show off in their circle of friends , attracting more users to participate

Renting someone else's bicycle originally requires payment, but now not only does it not cost money, but they actually give you money in kind. If you get a red envelope of more than 20 yuan, do you want to take a screenshot and post it on your Moments and various groups to let the world know so that everyone will envy you? What if it's a red envelope of 100 yuan? It’s 500 yuan now, and this red envelope can not only be accumulated, but also withdrawn.

Compared with the free ride activities of other shared bicycle companies, Mobike's red envelope bikes are not only free to ride but also give money to the onlookers. The random amount of the red envelope is as low as 1 yuan and as high as 500 yuan (which is much higher than many people's daily salary), attracting more people to choose Mobike. Free rides + high red envelopes can be said to be the best way to snipe the free ride operation strategies of other companies.

The real purpose of Mobike’s red envelope car is here

If all the red envelope bikes are zombie cars, broken-down cars, "privatized" vehicles, and bicycle-crowded areas in corners, then the purpose of the red envelope bikes would be simple. They would really just be Mobike's attempt at smart scheduling. However, most of the red envelope bikes are right next to you as shown in the picture below. You can find them by walking a few steps. The screenshot is taken at the entrance of Shenzhen 366 Pedestrian Street, not a "sparsely populated" place.

Let’s review the external and internal problems of Mobike mentioned earlier. The external problems include: intensified competition among peers, difficulty in cultivating user loyalty, unclear policies, high operating costs, and no clear profit model. The internal problems are: the drawbacks of the low operating cost strategy and the weakness of the high deposit model. The biggest trouble of all is that users “run away with the deposit.”

Let’s discuss a question here first: which shared bicycle company will be most affected by the large number of users returning their deposits?

It should be only Mobike. Mobike currently has nearly 7.7 million active users. If inactive users are included, it is roughly estimated that there are at least 10 million. Mobike's deposit is 299.00 RMB, and Mobike's capital pool is at least 3 billion RMB. With such a large capital pool, even if it is deposited in a bank's current account (the benchmark interest rate for current accounts is 0.3%), the interest that can be obtained in a year is: 10 million*299*0.35%=1046.5 million. Please note that this is only the current account income calculation, and there is no financial management plan such as fixed deposit, which means the income you get if you put your money in a bank card and do nothing. Let's do a little financial planning for this fund pool: half of the funds are kept in existence to ensure cash flow when users request refunds (generally, not so much is reserved, I did this to make calculations easier), and the other half is kept in a one-year fixed deposit. The benchmark interest rate for a one-year fixed deposit is 1.5%, so the income is 500w*299*0.35%+500w*299*1.5%=2765.75w. I believe that the bank’s professional financial planners can make the annual returns of Mobike’s huge pool of funds look better. After all, even though I’m not professional, I have already made nearly 30 million in profits.

Seeing this, I believe everyone understands what this huge pool of funds means to Mobike. It means a huge amount of income. Even if users are allowed to ride for free all year round, such a huge income can be generated. What is the biggest risk of such a large income? That is the real owner of the money - the user who was poached by other shared bicycles, that is, the user who "ran away with the money" as mentioned above.

There is another question here, that is, why does the incident of a large number of users returning their deposits have the greatest impact on Mobike? First of all, at present, only ofo and Mobike have the largest user base (the data provided by various data companies are unreliable, and it is not certain who has the largest number of users, but it is definitely between these two). Secondly, the deposit fees of other companies are relatively low. The prerequisites for generating a huge pool of funds are a high deposit amount and a large user base . Mobike meets both of these conditions, so when a large number of users abscond with the money, the impact on Mobike is the greatest, which is equivalent to the cooked duck flying away. Of course, users running away with money has a significant impact on ofo, after all, it has a large number of users.

Now let’s take a look at what other bicycle companies do besides providing free day service to the public, which things may cause users to run away with their money? It should be a cooperation with Sesame Credit. If the Sesame Credit score is above a certain level, you can ride without paying a deposit.

I’m not sure how many people have a Sesame Credit score above 650, but after a rough survey, most people around me have a score above this. Therefore, the deposit-free strategy of other shared bicycle companies is actually aimed at Mobike's high deposit of 299. It can even be said that this strategy is to poach Mobike's customers. Even if some users are used to Mobike and don't want to change, there will be times when there are no Mobike bikes around when they use the bikes. Now other platforms offer free rides without deposit, and there is no need to download an app or register. You just need to open Alipay , click a few times and enter a verification code. There is zero switching cost for users, so they will definitely choose Alipay to ride other bikes, not to mention that Mobike's riding experience is not that good. After comparing the riding experiences a few times, they will definitely happily go ride other shared bicycles and withdraw the deposit from Mobike at the same time. This deposit-free strategy can not only poach Mobike’s customers, allowing other shared bike companies to complete the task of attracting new users, but also improve Alipay’s user stickiness. Of course, this strategy also has other disadvantages, which will be discussed in other articles.

So at this point, everyone should know what the real purpose of Mobike's red envelope car is:

Retain users and prevent them from running away with their money

The strategy has been upgraded from providing users with free rides to giving users money, and the amounts given are not just a dime or two. Knowing that the public has become immune to red envelopes of one or two yuan, the maximum amount is up to 500 RMB (initially 100 RMB). Not only is riding a bike free, but you can also make money. This will definitely retain the spectators and their deposits, and attract new users. This is exactly the same strategy as that used by Uber and Didi when they were competing against each other. They were all investing a lot of money to retain users and expand market share.

Collaborate with your own free ride activities to snipe the marketing strategy of peers who do not need to pay for free rides

Marketing strategies also require differences. If everyone uses the same strategy - free riding, it will have no effect on users. They are all the same, especially when it comes to riding a bike. It doesn't matter whose bike you ride. The way to break the appeal of other companies' free strategies to users is to change one's own strategy into one that not only does not cost users money but also makes them profitable. This is actually an upgrade of the subsidy war to a money-burning war. If the red envelope car strategy is really effective, ofo will follow suit. When the two shared bicycle giants fight each other, other shared bicycles will die faster.

Leverage the power of users to reduce vehicle operating costs

As analyzed in the previous article, red envelope bikes are more attractive to users than ordinary bikes. Mobike can set the vehicles that need to be dispatched as red envelope bikes for users to ride, and it takes 10 minutes to ride to get the red envelope. If the destination is an area with high demand for cars, the random amount of the red envelope may be a larger amount. This can improve vehicle recycling rate, fault reporting rate, reduce vehicle operating costs and alleviate tidal phenomena.

At the same time, it can also cultivate fans' sense of participation and "ownership". At an industry sharing session, Hu Weiwei quoted a user comment: "He wanted to find a red envelope car, but found that the car was parked in a sewage ditch. Although a red envelope was only 1.08 yuan, he thought that the sense of accomplishment of rescuing the car could not be replaced by a red envelope."

Package Mobike to create an image of a strong technology company

Originally, the technical content of the red envelope car is not that high. To make it easier to understand, let's simplify the product design logic of the red envelope car: design a countdown for each car in the background, and start a countdown every time a user uses the car. If it is used by the user before the countdown ends, the countdown will start again after the user returns the car. If it has not been ridden by anyone after the countdown ends, it will be automatically marked as a red envelope car, and the icon on the app will be changed. After the user rides the red envelope car, a judgment is made on the riding distance and riding time. If the preset conditions are met, the user will be given a random red envelope with an amount within a specified range. At most, a few more layers of judgment and other weights will be added to this design logic. This is roughly the product design idea, and it is not difficult to implement.

However, Mobike held a press conference for this and packaged it as a great technological innovation of Mobike, which is "a perfect embodiment of the strong technical strength of Mobike as the world's largest smart shared bicycle platform." In its public relations releases, we can see various technical terms, such as the Internet of Things, augmented reality, LBS, big data , cloud computing, vehicle migration model, etc. To put it bluntly, these gimmicks are designed for the media and the public, making everyone feel that they are novel and high-end, worthy of reporting or forwarding, and at the same time making everyone feel that the launch of the red envelope car is not for the purpose of spending money, but for intelligent scheduling. This also leads to another purpose:

The concept of shared bicycles has become popular, triggering a new round of interpretation and discussion

For the media, Mobike's launch of red envelope bikes has undoubtedly upgraded the money-burning war in the shared bicycle industry from free to subsidized, which is very topical and eye-catching. With so many "technical footholds", it will also attract more people to pay attention to the discussion and analysis of the shared bicycle industry (this is what I do, which is what you are watching).

Can Mobike’s red envelope bike-hailing service continue?

It depends on the revenue-cost ratio, that is, the revenue brought by the red envelope car and the cost of operating the red envelope car.

The cost of Mobike’s red envelope bikes

Whose money is being spent? Where did you come from? Is the money spent pure operating cost, or does it come from cost savings or operating income from other aspects? First of all, let me explain that the shared bicycle industry itself has vehicle operation (maintenance and dispatch) costs.

There may be three sources of money:

• First, if users can be allowed to dispatch vehicles, it would be a good idea to pass on the money saved to them.
• Secondly, it makes sense to take out a portion of the revenue generated by the huge pool of funds and distribute it to users, asking them to help dispatch vehicles and attract more new users. This can also retain users and attract more new users, making the huge pool of funds larger;
• In the end, the money spent is the investor 's money, which is pure operating expenses.

Hu Weiwei, founder of Mobike, said at the third season summit of "Finding Chinese Makers" on March 30 that 5 million users participated in the red envelope car in the first week. If all of them were calculated based on the minimum amount of the random red envelope, the money distributed would be 5 million yuan. Not to mention that the random amounts were relatively large at the beginning. Such a large capital cost could not just save the cost of vehicle dispatch, so the income from the huge capital pool and the investors ' money is more likely.

What benefits can Mobike’s red envelope bikes bring?

From a cash perspective, the profit comes from the increase in bicycle recycling rate caused by red envelope bikes. There is no data yet on how much the recycling rate can be increased, and it is estimated that Mobike will not release it, so it is currently unknown. At present, the publicity effect accounts for a larger proportion, at least it can retain old users and attract new users to join.

Mobike itself also said that the red envelope car is just an attempt. Personally, I think it is more of an advertising effect at present and is far from achieving a balance between input and output. However, this attempt is good and there is a lot of room for improvement.

How can the red envelope car operation strategy be extended?

Productizing the red envelope car allows operators to match multiple operation strategies through functional configuration. As shown below:

1. The upper limit of the red envelope amount can be changed

Adjust the red envelope amount as needed to stimulate users to ride the red envelope bikes, coordinate with their own free ride activities, and snipe the free ride strategies of peers

2. Bind some red envelopes with fixed amounts and fixed behaviors

People who perform certain fixed behaviors can receive clear red envelope incentives. For example, if they help move a certain number of vehicles to a designated location every day, they can get a fixed red envelope amount, or the red envelope amount for the day can be doubled, etc., in order to attract idle people in society to participate in vehicle dispatch.

3. Expand the destination range and allow users to ride to a designated location

Vehicle hot spots can be marked on the map, so that users can receive larger red envelope amounts after riding red envelope bikes to designated areas.

4. Add destination check-in function

More suitable for weekend or holiday theme activities

5. Change the reward method and replace cash with physical prizes

This is very suitable for reducing the cost of red envelope vehicles, and the physical prizes can be provided by advertisers.

6. Change the form of red envelopes to a collection game

Similar to Alipay Jifu, after collecting several red envelopes, you can summon mysterious prizes, etc.

Among them, 3 to 6 can cooperate with other industries, allowing advertisers to pay money to sponsor red envelope cars.

How do other shared bikes crack Mobike’s red envelope bike strategy?

The operational strategy should be a two-way process. If there is only attack but no defense, or only defense but no attack, it will be too boring. Let me throw out some ideas to crack down on Mobike's red envelope bikes:

1. You have it, I have it, and we can bridge the gap

The technical implementation of red envelope cars is not difficult. If you have red envelope cars, then I will launch other colour rickshaws, such as yellow rickshaws, blue rickshaws and so on. Just now, Xiaolan and a certain brand launched a "fat-free car".

2. Whatever problem you want to solve, I will create it for you

Aren't you afraid that users will "run away with the money"? Then I will launch more free x chartered cars with no deposit, etc. to create such problems for you.

3. I will do a bigger eyeball activity to weaken the influence of your red envelope car

Users who can be attracted by red envelopes can also be attracted by other more beneficial activities.

Finally, let me use a mind map to organize the logical structure of this article for you:

Final Thoughts

I have written 6.5k words to analyze Mobike's red envelope car operation strategy. This is just my personal interpretation. To put it bluntly, it is the speculation of a "critic with an ugly face". I cannot guarantee how true it is. I just hope that through my thinking, I can give you some ideas. It turns out that you can look at it this way. After all, "the you you know, the real you, and the you in the eyes of others are always three different things" is also universal in the business world.

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The author of this article @Ray Wu武明 is compiled and published by (Qinggua Media). Please indicate the author information and source when reprinting! Site Map