Innovation drives new economic growth
The two sessions this year called for more efforts to support innovative enterprises, especially with IPOs and financing. How do you view this policy and what benefits will it bring to your company?
Dai Wei: As a Chinese company, Ofo hopes to go public in China if possible in order to create more value for the domestic capital market.
As a young tech startup, Ofo has achieved success in the past years thanks to the favorable policies and business environment. Like most startups, Ofo is on its path of rapid development and needs to expand financing channels to get more support to bolster our businesses.
The two sessions delivered a good signal for startups like Ofo and revealed that the government has attached great importance to technology innovation. These favorable policies will help us to explore more new advanced technologies in the future.
What is your take on the role of China's internet and technology development in its economic transition? What are the challenges that we might encounter?
Dai Wei: China has embraced rapid internet and technology development, which is significant to our economic transition, especially in improving social efficiency. Big data and artificial intelligence were included in the Government Work Report, indicating their future significance to industrial integration, economic structure and people's lifestyles.
We say Ofo is a great attempt to apply internet technology to people's lifestyles－their way of daily commuting. In order to enhance its user experience, Ofo has been facilitating our tech innovations like the first NFC smart lock and big data platform for urban traffic. Going forward, we will continue to develop innovative technology and further explore artificial intelligence and big data.
What's Ofo's business model? How does the company gain profits? Do you mainly gain from the deposit?
Dai Wei: It's more like the car-hailing business where we offer products for users to rent and users pay by times. In fact, even though users only need to pay 1 yuan (16 US cents) per time, the profit rate of bicycle-rental is far better than cars.
Our main profit comes from the rental fees rather than the deposit. The deposit is not a property that users can invest in to preserve or increase the value. It is not at all a product and, from my perspective, will not exist in the long run. We've never diverted the deposit for other purposes and we are waiting for government policies on how to deal with it.
For our 3.2 version of Ofo bike, the cost is 400 yuan. As of June 2017, an Ofo bike is usually used four to five times a day, which generates revenue of four to five yuan. We can recoup the cost of one bike within half a year. We are profitable in many cities, with the maximum profit hitting 40 percent.
Shared bikes have caused many problems. There are people who keep the bikes for themselves. In extreme cases, some groups can decode the pin of shared bikes. What's your feeling towards this?
Dai Wei: At first, I felt anxious and sad. But now, I think that what we need to do is to continue increasing our scale and using our resources to get used to such a concept and then use it. Our statistics show that fewer bikes are being damaged as more and more bikes are being made available. When a newcomer enters, it will face various challenges.
How big do you think Ofo's market will be? What's your plan for the future?
Dai Wei: Five billion people across the globe will ride bikes. Even now, more than 100 million bikes are sold every year. You can see people riding a bike in nearly every corner of the world. In the future, we hope that we can serve several million people every day and Ofo can be found everywhere globally.
The internet of things will be a certain trend. We are cooperating with Huawei and China Telecom in creating the next generation of IoT product. It may become one of the largest applied scenarios for narrow band IoT. In the future, bikes will be interconnected and can help governments to collect data, including air quality and traffic jam information.
