Here’s Why Ctrip Invested In Mobike – A Smartphone Enabled Bicycle Rental Company

January 11th, 2017 by Trefis Team
CTRP: Ctrip logo
CTRP
Ctrip

Ctrip made yet another investment, this time in a smartphone enabled bicycle rental service. Along with the expansion of its existing businesses, providing more innovative travel services might help Ctrip in becoming something like the supermarket where all the requirements of a traveler can be fulfilled. This, in turn, will boost the company’s growth even further.

It seems that Ctrip’s strategic investing spree will not slow down anytime soon. Just days after acquiring ground transportation company, TangRen World, Ctrip has now participated in a $215 million Series D funding round for China’s Mobike, a bicycle rental business that runs with the help of smartphones. According to Ctrip’s Chairman James Liang, Mobike’s business is not only meant for passengers to go from one point to the other, it has a great potential for travelers who want to explore their destinations by navigating on bicycles around the cities. Ctrip wants to help Mobike create a more seamless network for short distance travel within China and also abroad.

Mobike was launched in Shanghai only in last April and by now the company had spread over 9 cities and has raised over $350 million. The GPS-enabled Mobikes are durable, require low maintenance, and come with a proprietary smart-lock technology. The users can use the Mobike smartphone application to easily locate a bike near their vicinity anytime they need and they can unlock the bike with their phones. The user can park the Mobike at a suitable place after reaching their destination and can lock the bike once more so that it is ready to be picked up by a new user. The payment gets deducted by the user’s Mobike account.

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How Might Ctrip Be Benefited?

Bicycles are an environment friendly and affordable means of commute and often tourists enjoy riding on them to explore various parts of the cities or towns that they are visiting. Ctrip’s travel services include accommodation booking, airline ticket booking, packaged tours, and car rentals. Mobikes might be yet another way to capture the segment of the tourist population that love traveling like locals. When it comes to investing in newer avenues, Ctrip never shies away. Going by Mobike’s growth curve it does seem that the company has experienced significant growth within a short time span and has the potential for an even better future. With Ctrip’s help, the company can expand more rapidly within China and might even tread beyond. Ctrip, in turn, will be benefited by offering a one-stop-shop type of solution to its travelers by helping them book all their travel needs under one roof.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Ctrip

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