Wukong becomes first company to exit bike-sharing industry

The operator of Wukong shared bikes has announced plans to exit the market as of this month, making it the first brand to throw in the towel amid the fierce competition of China’s bike-sharing industry.

Lei Houyi, the founder of Wukong, told Thepaper.cn that the company has returned the deposits and remaining balances of its users. The company deployed a total of 1,200 bikes in Chongqing, but 90 percent of them have now disappeared.

"We suffered a loss of 1 million RMB," Lei disclosed.

Lei attributed the company’s failure to a lack of access to premium resources in the supply chain.

"Ofo and Mobike cooperate with the biggest manufacturers in the supply chain, while Wukong works with small factories whose products are of inferior quality," he said.

Wukong's business model was another drawback. Lei initially pinned his hopes on a crowdfunding mode in which people pay 1,100 RMB to get the rights to one bike. The bike’s owner then receives 70 percent of the profits generated by that bike. However, as the bikes can be ridden virtually free of charge, the project failed to generate a profit, which made the model less intriguing for potential partners.

The company attracted about 10,000 users, and each one of its bikes was used three to four times a day.