Bike-sharing brands need better differentiation

Japan may have failed to embrace Uber, but ride-sharing on two wheels looks a lot more promising. In the past month, two bike-sharing operators announced plans to enter the Japan market, despite its first-rate transport systems and a well-established ownership-based cycling culture.

Beijing-based Ofo and Merchari (‘chari’ being a slang word for bicycle in Japan), a venture by Mercari, a Japanese online marketplace, will enter into direct competition with Docomo Bike Share, which has been experimenting with the service for several years. Mobike, another Chinese company, also established a presence in two regions in Japan this year. Transactions on Docomo’s service topped 2 million in 2016.

The sector is already booming in China, where there are more than 25 providers and around 30 million users, according to Xu Bao, a senior researcher at the Hakuhodo Institute of Life and Living in Shanghai. In this year’s second quarter, revenue approached RMB 3.9 billion (US$499 million) according to iResearch—four times that of the first quarter. Ofo (funded by Alibaba) and Mobike (funded by Tencent) dominate the market with 52 percent and 41 percent share, respectively. Both are also present in Singapore, where they compete with Obike, a homegrown service.

If you’re feeling those brand names all roll into one, you’re not alone. In fact, at this stage, there appears to be very little at all that distinguishes one service from another. “They all come across as very similar,” says Arvind Sethumadhavan, regional chief innovation officer at Dentsu Aegis Network, who notes that even the colour schemes of Mobike and Obike are hard to tell apart. He puts it down to the fact that it’s still a nascent industry, but suggests that with the market getting more crowded, it’s time the various players take branding more seriously.

One way to stand out could be looking at a wider picture of what urban mobility can be and how the brand can help people and cities get there.

Marketing efforts at the moment are mostly explanatory and acquisition- and promotion-driven, says Christer Eriksson, regional planning director of R/GA, who is also a user. That is in contrast to brands like Citi Bike in the US, which benefits from Leonardo DiCaprio’s endorsement and has sponsored major sporting and entertainment events. 

But Eriksson says Ofo is the most “international” in its approach and tone outside China. In Japan, the company is currently looking for a marketing director. It has the support of SoftBank, which is likely to make it a lot more credible than if it were acting independently. A core premise is ease of use, which will help it compete with Docomo’s rather convoluted sign-up process. Another notable difference is that it’s dockless, rather than having fixed parking spots.

That is good and bad. Fixed stations are an effective means of branding, notes Joanne Hoe, a planner at Hakuhodo Singapore. And while dockless bikes give riders more freedom, they also have an image problem in Singapore and China, where people have complained that bikes dumped at random (and sometimes in large piles) sully the environment.

Fixing problems like this, which are dependent on the considerateness of users, will be no easy task and will most likely require educational PR efforts. But there are many things more easily within a company’s control. Easy-to-use smartphone applications and reliability are basic hygiene factors.

If a first-time user finds a service cumbersome, they will be unlikely to return, Sethumadhavan says. He adds that bikes must be readily available at all times in order for people to come to see the service as an everyday utility (for example as a way for workers to get to meetings) rather than a periodic leisure activity. Hoe says it’s a question of changing people’s habitual daily commute away from trains and buses. Offering free rides at certain times, as operators in Singapore do, is a way to get people to download the apps, which then serve as a way to prompt usage at other times.

Docomo electric bikes in Hiroshima, Japan

Then there are the bikes themselves. Docomo’s service is attractive to many because the bikes are electrified. This is something services in China are also now scurrying to produce, Xu says. Mobike has gone a step further, with solar-paneled baskets to enhance usability.

Building brand affinity need not rely on big celebrity endorsers. Eriksson says these services need to find a way to become part of the fabric of society. That could involve telling genuine, engaging stories about users. But they need to start by communicating a strong reason for being. Most brands haven’t made clear “what they stand for or why they’re making the bikes, so one way to stand out could be looking at a wider picture of what urban mobility can be and how the brand can help people and cities get there,” says Eriksson.

A bike-sharing service can’t claim to have a similarly grand purpose as other sharing-economy companies like Uber and Airbnb. But talking about the greater benefits of reducing pollution and supporting healthy lifestyles could be highly advantageous, Sethumadhavan reckons. Docomo is already trying. Its ‘Be Free Tokyo’ campaign, which launched in June, comprises experiential events and online content highlighting bike-sharing’s ability to open up the city to both residents and tourists, and the fact that it’s environmentally friendly and healthy (even if the electric motors mean riders are not exactly exerting themselves).

Given the optimism around the sector, services are expanding internationally before they have fully mastered their messaging in their home markets. There is good reason for that, because once users are comfortable with a service, it will likely be difficult to persuade them to switch. Each city, not to mention country, also poses unique regulatory challenges that will take time to overcome, Eriksson notes.

Ultimately, he thinks its possible for the likes of Ofo and Mobike to succeed in a market such as Japan, but in addition to the right branding it will come down to scale: the more bikes there are, the easier the service is to use. Strong financial backing means they have a chance to upend local players, he says, but it’s still anybody’s race.