China's No. 1 Bicycle Town: Shared Bikes Saved It, Then Slowly Killed It

Before the National Day holiday, many second- and third-tier shared bicycle companies, such as Xiaoming Bicycle, Kuqi Bicycle, and Kala Bicycle, reported difficulties in refunding deposits and suspending projects. In addition to consumers and these shared bicycle entrepreneurs, the bicycle manufacturing suppliers at the head of the bicycle industry chain suffered heavy losses.

Drive 40 kilometers northwest from the center of Tianjin and you will reach Wuqing District. When the car passes an overpass, a road sign with the words "Wangqingtuo, China's Bicycle Industry Base, Welcomes You" will catch your eye. This road sign, with its old color aged by time, tells passers-by that "Wangqingtuo" was once a legend.

Wangqingtuo is a small town in Wuqing District, Tianjin, and was formerly known as Wangjiatuo. It has a permanent population of 40,000, and more than 70% of the labor force is engaged in industries related to bicycle production. Therefore, it is known as "China's No. 1 Bicycle Town."

As early as 2010, the annual production and sales of bicycles in Wangqingtuo Town accounted for 1/8 of the national production and sales. But all this has long become history, and now more topics are mentioned here, which are related to shared bicycles.

In the past year, the capital-driven shared bikes have brought carnival to the manufacturers in this small town and brought money dreams to the parts suppliers, but more importantly, it has brought a great impact on the retail end of users. "Who would buy a bicycle when there are so many shared bikes that can be ridden for free?" said an old man who works as a gatekeeper at a bicycle factory.

After the capital bubble burst, all that was left was a mess.

Wangqingtuo town is home to more family-run factories, and the shared bicycle companies it serves are mostly small and medium-sized enterprises that are far away in third- and fourth-tier cities and lack the financial strength to compete with Mobike and ofo. Their orders once saved these bicycle manufacturers that were on the verge of bankruptcy, but their recession has once again put the bicycle manufacturers into despair.

Shared bikes came and went

This place is the same as all the third- and fourth-tier towns you can see, with low houses and rows of slightly shabby storefronts on the street. Although bicycles are abundant here, electric bicycles are obviously the standard in the town. You rarely see bicycles being ridden on the street. They are usually quietly placed at the door, in rows and neatly, waiting for customers to inquire.

Bicycles waiting to be sold on the main street of Bicycle Town

As the National Day holiday approaches, the streets become a little more lively. There is a market every five days, and antiques and potted plants are evenly distributed on both sides of the road. But no matter which business it is, there are more people gathered in front of the bicycle shop.

"Since the emergence of shared bikes, our bicycle business has basically stopped," the owner of the town's Iron Anchor Bicycles told AI Finance, saying that the store usually sells bicycle parts. While talking, he received a father who came to see a children's bicycle for his child. The father tried riding it a few times, then put it down and left.

The manufacturers here once had a love-hate relationship with shared bicycles, but now only "hate" remains.

In recent years, bicycle sales have been declining, and manufacturers in Wangqingtuo Town are worried about their livelihood. In 2016, the rise of shared bicycles brought Wangqingtuo Town a brief comfort.

Several local bicycle manufacturers told AI Finance that in early 2017, the trend of shared bicycles spread across the country, driving the development of bicycle manufacturers. At that time, many shared bicycle companies came here to find sources of goods. Their order volume is not as huge as that of Mobike and ofo, but for small and medium-sized bicycle manufacturers in Wangqingtuo, it is a stable and profitable business.

“A lot of factories were indeed saved at that time. The larger factories felt that the orders were small and risky and wanted to find larger partners, but some factories on the verge of bankruptcy happened to have order demands, so we helped them.” Zhen Xuyang from the local Yingtong Automobile Industry told AI Finance.

Shared bicycles have brought a brief spring to the bicycle town. Bicycle and electric vehicle companies in Wangqingtuo Town participated in the "2016 Asian Bicycle Boutique Expo"

However, ofo and Mobike will not come here. Their sources of goods are all in the development zone of Jinghai, Tianjin, where there are larger suppliers such as Fujita and Emma.

"Resurrected overnight, with money all over the floor", this is how some media described Wang Qingtuo at that time.

According to data provided by the Tianjin Bicycle and Electric Vehicle Industry Association, China's bicycle production in 2015 was 80.26 million, a year-on-year decrease of 3.36%, and this figure continued to decline by 0.26% in 2016. However, the situation began to improve in 2017. Data showed that from January to May this year, bicycle production was 26.22 million, a year-on-year increase of 25.4%, and the cumulative main business income increased by 12.1% year-on-year, and the total profit increased by 10.5% year-on-year.

The biggest beneficiaries are the suppliers of bicycle parts and components. Zhen Xuyang told AI Finance that in the past six months, due to the impact of shared bicycles, the cost of bicycle parts and components has increased by about 30%.

In fact, almost all bicycle manufacturers in the country have "resurrected" with the wave of shared bicycles. Wang Qingtuo is just a corner under the capital wave and was quickly abandoned by the market.

"Long payment period, slow payment, easy inventory pressure, and heavy reliance on external financing" are one of the characteristics of Internet companies. This characteristic caused some manufacturers in Wangqingtuo to wait for payment after production and shipment, and eventually the bicycle companies went bankrupt. The smaller the company, the more risks it bears, until it is dragged down.

On the eve of the National Day, many second- and third-tier shared bicycle companies such as Xiaoming Bicycle, Kuqi Bicycle, and Kala Bicycle have successively reported that their deposits could not be refunded, their teams were on the verge of disbanding, and their projects were suspended. Not only consumers but also these shared bicycle entrepreneurs have been hit hard. The bicycle manufacturing suppliers at the head of the bicycle industry chain have suffered heavy losses. The owner of a factory in Wangqingtuo Town told AI Finance that his friend's factory received an order, and after paying a 30% deposit, the other party abandoned the bicycles that had been built and could no longer be contacted.

The situation of shared bicycle companies running away after the bicycles are built is often seen in Wangqingtuo Town.

The bicycles have been built, but the company has run away

The embarrassing situation of the former bicycle base

If you ask how Wangqingtuo Bicycle Town became famous, few people can even answer. "It's been a long time, at least dating back to the reform and opening up. Once one company started, everyone followed the trend," said an old man in his 70s to AI Finance.

According to the website of Wangqingtuo Town Government, the bicycle industry in Wangqingtuo started in 1994. At first, workers who assembled bicycles in the supply and marketing cooperatives started their own businesses, selling low-end bicycles. The national demand for bicycles increased in the mid-1990s, and Wangqingtuo Town gradually formed a bicycle industry chain. The hundreds of parts needed for a bicycle could all be purchased in the town.

Southern Weekend reported that at the most outrageous time, Wang Qingtuo's bicycles sold for 50 yuan each, which was one-third of the industry average price at the time. The frame of this bicycle was as thin as paper, and the life cycle was only 3-6 months. As a result, Wang Qingtuo became synonymous with low-quality bicycles. Later, after the town government cleaned up and integrated the bicycle industry, Wang Qingtuo's bicycle industry got back on track, and some brand companies entered the mid-to-high-end market.

However, bicycles are durable products after all, and the overall demand in the industry is limited. In Wangqingtuo Town, where many bicycle manufacturers are concentrated, the competition is extremely fierce.

After electric vehicles replaced bicycles as the mainstream short-distance means of transportation, Wangqingtuo's bicycle production was partially shut down and the sales office was deserted. Local manufacturers said that many companies chose to transform into sports bicycles at that time.

However, the situation brought about by shared bicycles this time is more serious.

Zhen Xuyang told AI Finance that due to its low added value, the shared bicycle business had come into direct conflict with Wang Qingtuo.

In the development zone five kilometers away from the town, there are many bicycle factories. You can rarely see factories operating normally when you pass by here. The owner of Luoda Bicycle Factory told AI Finance that due to the national environmental protection inspection, bicycle parts and paint process are greatly affected, so the upstream supply is not enough, and the downstream is naturally cut off.

A bicycle company that has ceased production in Wangqingtuo Town

Luoda can still barely maintain operations. In the several thousand square meters of factory, there are many colorful bicycles piled up, and more than a dozen people are working around an assembly line. The factory also supplies a bicycle company called "Qileme", but he is not optimistic about shared bicycles, "It's all a capital bubble."

Almost every interviewee had a sad face when talking about bicycles. They were helpless about the impact of the market and reality. Ten years later, back to the most glorious time of Wangqingtuo, almost every household in the town had its own factory, and many villagers in the village started to assemble bicycles directly on their own open space.

The boss of Tiemao Bicycle also has his own factory. When shared bikes came, he did not follow the trend and accept those orders. Now he thinks that he was lucky. But life is not easy. The bicycle manufacturers that survived still have to face the impact of shared bikes.

"Although the release of shared bicycles has been restricted now, the impact will last for at least three years." Zhen Xuyang said that based on the lifespan of bicycles, the civilian bicycle business will not see much improvement in at least the next three years.

He chose to focus his business on mountain and sports bikes, and the children's bike market will be relatively less affected due to differentiated competition.

Even without shared bikes, Wangqingtuo’s glory days may not continue. Currently, many of Wangqingtuo’s spare parts are supplied from Hebei, where a new “bicycle industry base” is being formed. They have lower labor and costs, and have a price advantage over Wangqingtuo.

"We are under a lot of pressure from being sandwiched together, and we can't go back to our glorious moments," Zhen Xuyang sighed.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.