Ofo’s overseas operations show signs of cash crunch

More signs show that ofo’s cash crunch not only affect its domestic business but also its global expansion plans. The troubled bike hire giant has launched a warehouse sale of its bikes to downsize its operation in Singapore, a source with knowledge of the matter told TechNode.

The ofo bikes on sale are sold brand new from a Singaporean warehouse that’s owned by local logistics service provider Bok Seng Group, according to a poster shared by the source. TechNode team visited the venue finding that stacks of unpacked parcels with ofo’s logo on it are stored in the warehouse.

The poster shows that bikes are priced at S$50 or RMB240. If true, the company is selling their stocks at a 30% discount when compared with the original price of RMB 335 per bike. Shanghai Phoenix, a bike maker partner of ofo, has recorded revenue of RMB 596.72 million in 2017 by shipping 1.78 million bikes to ofo, according to Q4 2017 financial report of the company. Based on that, the cost of ofo bikes is RMB 335 per bike.

Facing a saturating market, ofo and its competitor Mobike have been expanding aggressively overseas in seek of larger markets since the beginning of 2017.  Ofo is operating in many foreign countries, like the US, UK, Russia, Italy and Netherland, but Singapore is its first and probably the best overseas market.

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