In recent WeChat posting, thousands of almost identical articles have appeared across WeChat and Weibo with a formulaic headline structure beginning with the question “Is ofo about to collapse?”
ofo is about to collapse
It is reported that the company is short of money and it would be closing its international business following the departure of COO Zhang Yanqi.
Nonetheless, additional reports claim the number of layoffs will be the highest in ofo’s history, about 50%. Moreover, they claimed that senior vice president Nan Nan and public relations director Yang Xun had left the company.
Weibo: really ture!
In May, the company cut its orders on new bicycles to 80 thousand from 5 million, causing renewed speculation about its finances. The company responded by saying that some cities had placed a ban on the addition of new bikes. It said there would be more room for additional bikes in future as its existing fleet gets replaced.
© Image | sohu
ofo recently started selling advertising on its bicycles and in its apps, attempting to boost revenue amid increasing cash strain. Talk of the company’s cash problems has made news in the past few months. People close to the matter said that the company has paid off just 20% of its RMB 3 billion debt. ofo also mortgaged its bicycles for a RMB 1.77 billion loan from Alibaba.
So, ofo really goes to collapse?
Reversal Emerges
After these reports, ofo takes to its WeChat public account to counter rumors that it is struggling and laying off staff. The company published a posting entitled “No company has ever failed because of rumors!” where it stated its findings of a media survey of slanderous articles and postings across the Chinese internet. The posting ends with ofo saying it had already sent lawyers’ letters to the media companies involved.
Red words: Rumors about ofo
The posting says the company has always positively welcomed opinions, “but when it comes to malicious slander, which is planned and organized mass defamation, we have zero tolerance!
China’s bike rental industry has experienced a roller coaster over the past 3 years. At its height, there were nearly 80 bike rental startups in the market, brightening the streets with a rainbow of bikes.
© Image | sohu
But in the fast-paced tech world, trends come and go quickly. Within a year, over 20 bike startups failed, including once-big names in the field, such as Bluegogo,Coolqi, and Xiaoming. A cooling of the availability of capital, intense competition, uncertain profit models, a saturating market, and tightening regulation all contributed to swift market consolidation.
Graveyard of shared bike/ sohu
Now two big-brand Mobike and ofo came to dominate the streets and mindshare. If ofo goes into liquidation, the shared bike market will be out of competition, which may not be a good thing to us, consumers.
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Source | technode
HACOS,Business Services Solutions Master